Red Tape

A quick guide to Red Tape and what can be done about it

Most of us have experienced it: waiting in long lines (only to find you were in the wrong line), filling out and submitting a confusing and lengthy application form (only to have it returned 6 weeks later with a request to submit additional information. This is red tape and is commonly found in both the public and private sectors.

I will go into further details in a future blog on why we should care about reducing unnecessary red tape given the large-scale individual, organizational, economic and societal costs and negative impacts of unnecessary red tape. The one line summary is that red tape makes it difficult to start new businesses and for existing businesses to survive, compete, and/or grow which means that economies are constrained from creating jobs, growing incomes, and reducing poverty and inequality.

Definitions of Red Tape

To develop solutions to red tape it is critical to understand what it is and what causes it. Impact Economix has worked extensively with municipalities in South Africa to do just this and authored Guidelines for Reducing Municipal Red Tape which contains detailed action plans for reducing municipal red tape. In these guidelines we defined red tape as follows:

Red tape stands for rules and regulations and administrative procedures that impose unnecessary costs on business and/or government, and/or that are not effective in achieving their policy goal, and therefore produce sub-optimal and undesired social outcomes. Red tape exists in both the public and private sectors and arises as a result of rules and regulations, administrative procedures, and the nature of other government – business interactions (Department of Trade and Industry and Department of Cooperative Governance and Traditional Affairs. 2013. Guidelines for Reducing Municipal Red Tape).

Three additional red tape definitions emphasise additional dimensions:

A process or other requirement of government perceived to impose an unwelcome burden on business, community organisations or individuals. Green Tape refers specifically to processes or requirements associated with environmental or heritage protection (The Australian Government Guide to Regulation. 2014).

“red tape” means the information to be submitted or maintained and the procedures required to gain administrative approval or to comply with prescribed requirements in one or more regulatory measures, where the submission or collection of such information or compliance with the processes and requirements are complex, time- consuming and costly and includes:

  • completing paperwork;
  • obtaining licences;
  • requiring a decision to be approved;
  • filing requirements;
  • certification requirements;
  • reporting; and
  • investigative and inspection enforcement practices and procedures (Parliament of South Africa. 7 April 2016. Red Tape Impact Assessment Bill: Notice 193 of 2016).

Non-essential procedures, forms, licences, and regulations that add to the cost of dealing with government, or anything obsolete, redundant, wasteful or confusing that diminishes the competitiveness of the Province, which stands in the way of economic growth and job creation or wastes taxpayers’ time and money (Western Cape Government: Red Tape Reduction Unit.)

Reducing Public Sector Red Tape and Lessons Learned:

Impact Economix has learned a number of lessons through working with government over the past five years about reducing red tape in the public sector in South Africa, including the following:

    1. Ideally a national policy framework comprising of rigorous policy and legislative development and review processes should be in place to pro-actively reduce the creation of new red tape (some countries have implemented best practices in this regard – but unfortunately South Africa is not yet one of them although the draft Red Tape Impact Assessment Bill aims to change this- the subject of a future blog);
    2. Each red tape challenge is unique: in its context, is causes, who is involved and who is directly and indirectly affected, and the systems, processes, and regulations.
    3. Each red tape challenge usually has multiple and inter-related causes as the following diagram shows. These causes can include any combination of the following:
      a. Societal dynamics including historical relationships between social groups and business as well as cultural and political economy dynamics;
      b. Deficiencies in organisational strategy and alignment in terms of identifying and meeting client needs;
      c. Poor implementation of performance management systems and management of human resources;
      d. Organisational culture and leadership;
      e. Political interference in administrative processes (especially supply chain management) which is sometimes linked to corruption;
      f. Inefficient business processes;
      g. Poorly managed communication channels and interfaces between stakeholders;
      h. Inadequate use of IT systems to enable automated processes;
      i. Lack of human resources due to budgetary constraints (although this can often be addressed through addressing point b) above).
© Impact Economix

© Impact Economix

  1. Sustainable solutions to red tape challenges need to identify the specific causes at play in a particular context and then identify actions that can be taken to address these specific causes;
  2. Sustainable solutions to red tape challenges need to be co-developed by the organisation’s responsible for the red tape as well as representatives of the clients impacted on by the red tape through a carefully designed and facilitated participative process; and
  3. An organisational change management strategy needs to be developed with leadership that understands the critical importance of addressing a specific red tape challenge and how this impacts on the organisation’s strategic priorities and objectives.

Red Tape Resources:

Impact Economix has made a number of presentations to government containing proposals to reduce red tape and these and our other reports can be accessed here:

 

What do you think are the most serious red tape issues in South Africa?
What do you think should be done to address some of the causes of red tape?
Further blogs in this series will look at specific municipal red tape challenges and solutions in the fields of Land Use Planning and building control management (including re-zonings and building plan submissions) as well South Africa’s national approach to red tape reduction and what we can learn from approaches followed in other countries.

Leave a Reply