“Globalisation, propelled by trade and investment liberalisation, and rapid technological change, has delivered prosperity and reduced poverty for millions of people in recent decades. We have learned, however, that reaping the full benefits of globalisation requires many elements, including good public and corporate governance; policies that promote structural adjustment and social cohesion; greater access to education; efficient financial markets; and sound policies for research, innovation and development. Of course, policies are critical, but implementation is too often undermined by domestic political considerations.

The economic environment is changing rapidly. Globalisation is being driven by international trade and investment which, in turn, are spurred on by the borderless world produced by swift advances in communications and transport technologies. The necessary companions are market liberalisation – without which the current expansion of trade and investment would slow dramatically – and new forms of governance to referee the changing rules of the game and ensure effective implementation of public policy.

Fundamental questions about the respective roles of the state and the market lie at the heart of the current debate about regulatory reform. Governments are grappling with a double challenge: they have to reduce obstacles to the dynamic market forces that drive efficiency and innovation in an increasingly competitive, globalising economy; and they have to find more efficient ways to protect and promote important public-policy goals. Regulatory reform helps them deal with both.