Standard Cost Model (SCM)

The Standard Cost Model (SCM) is a method for determining the administrative burdens for businesses imposed by regulation. It is a quantitative methodology that can be applied in all countries and at different levels. The method can be used to measure a single law, selected areas of legislation or to perform a baseline measurement of all legislation in a country. Furthermore the SCM is also suitable for measuring simplification proposals as well as the administrative consequences of a new legislative proposal.

The Standard Cost Model (SCM) Network

International Standard Cost Model Manual, SCM Network
This manual contains, besides the description of the method, a practical guide on how to perform SCM measurements, practical experiences from Denmark, the Netherlands, Norway, Sweden and the United Kingdom and a chapter on how to make cross country benchmarks/comparisons.

MISTRAL® - A Model to Measure the Administrative burden of Businesses, Andre Nijsen and Nico Vellinga, Scales, 2002.
This report outlines the MISTRAL model (Administrative Compliance Cost Assessment Tool), by emphasizing the issues of when a model may be applied, why it will be applied, how the model works and why the model should be used. The report concludes by narrating several results obtained on the basis of MISTRAL.

Danish website on the Standard Cost Model
Check out the Burden Barometer.

International benchmark of administrative burdens in the Netherlands, Germany, and Denmark, Ramboll Management, 2006.

Evaluating administrative burdens through SCM: some indications from the Italian experience, Laura Cavallo, Giuseppe Coco, Mario Martelli, SCM Network, May 2008.
This paper gives account of some indication arisen during the course of the realization of the pilot project for measurement of administrative burdens through Standard Cost Model (SCM) in Italy in which the authors have been involved. The authors discuss some methodological problems of the method, its weaknesses and strengths against more complete forms of evaluation of the adequacy of regulation. Their main conclusion is that the SCM is a potentially useful tool. Its great strength which lies mainly in its pragmatic approach and the possibility of commitment on a quantitative target likely to deliver more result in terms of simplification, may be at the same time a source of weakness.

The International Standard Cost Model Network to reduce administrative burdens: Simplification Catalogue

Five Routes to Simplification, SCM Network
The five ways to simplify include, improving ICT systems, communication, and data-sharing among others.

The review process could be designed in different ways, e.g.:

• Ministries could be tasked with listing and reviewing the regulations they administer and make their own recommendations to the Regulatory Reform Unit for repeal or deletion;
• A central target for the proportion of legislation to be repealed/simplified could be set by the PM and compliance monitored by the Regulatory Reform Unit/Prime Minister’s office;
• The Regulatory Reform Unit could itself review regulations and make recommendations to the Prime Minister for legislation to be repealed/eliminated.

Publication
Here is Your Money! Using the Standard Cost Model to Measure Regulatory Compliance Costs in Developing Countries

This paper provides a number of lessons from the first few years of using Standard Cost Model in regulatory reforms, with focus on business licensing, in developing countries. Also available: Standard Cost Model factsheet