A recently published peer-reviewed study has cast serious doubt on the reliability of the core measurement tools underpinning the European Union’s decades-long drive to cut red tape for businesses. The research highlights that one of the EU’s flagship instruments, the Standard Cost Model (SCM), suffers from fundamental methodological flaws that have been overlooked despite years of widespread use. These findings raise pressing questions about the robustness of the evidential foundation on which major deregulation policies are being constructed.
Led by Academy Research Fellow Matti Ylönen of the University of Helsinki, the study meticulously traces the origins and evolution of the EU’s administrative burden reduction agenda, which has its roots in the early 1990s. Central to this narrative is the SCM, a methodological framework devised to quantify the administrative costs that legislation imposes on firms. The initial iterations of the SCM were grounded on a relatively small number of industry interviews, which inherently limited the model’s representativeness and scope. Over time, notably during the 2010s, the European Commission relaxed data collection standards and interview criteria, thereby further diluting the rigor and transparency of the model.
Ylönen explains, “From its inception, the SCM was plagued with methodological weaknesses. The subsequent dilution of interview requirements and data quality exacerbated these issues, resulting in a tool that struggles to deliver reliable and transparent estimates.” Despite these well-documented challenges, the SCM remains prominently embedded in EU policymaking. As recently as May 28, European Commission Executive Vice President Valdis Dombrovskis publicly reiterated the SCM’s importance in establishing targets for administrative cost reductions, underscoring its enduring influence over regulatory reform agendas.
The timing of this reaffirmation is critical, as the European Union is currently in the throes of negotiating sweeping omnibus directives aimed at deregulating the economic landscape. Critics warn that this acceleration of deregulation risks eroding significant provisions related to corporate sustainability and accountability, which were painstakingly secured over recent years. The study’s revelations suggest that these bold policy shifts rest on a potentially unstable evidentiary framework, a factor that could undermine both their legitimacy and effectiveness.
Integral to the discourse around the EU’s deregulatory ambitions is the Competitiveness Compass, a flagship initiative of the von der Leyen Commission. This instrument provides a high-profile figure widely cited in policy discussions: €150 billion in recurring administrative costs borne annually by European businesses. This staggering number serves as the baseline for the ambitious goal of cutting these costs by €37.5 billion before the end of the Commission’s mandate. However, the study warns that this estimate is derived from antiquated SCM-based calculations dating back to the early 2000s, raising doubts about its accuracy and relevance in today’s complex regulatory environment.
Ylönen critiques the Commission’s reliance on these dated figures, observing that the methodology underpinning these cost calculations conflicts with conclusions reached in earlier EU reports. For instance, the 2012 Regulatory Fitness report explicitly expressed skepticism about the utility of setting broad quantitative targets for legislative stock management, suggesting such measures are unlikely to produce meaningful outcomes. This internal EU dissent underscores a deeper inconsistency within the policymaking process, where critical doubts are seemingly sidelined in favor of headline-grabbing numerical goals.
This internal scrutiny aligns with external evaluations such as the 2015 report by the Independent Evaluation Group (IEG) of the World Bank, which also expressed reservations about the SCM. The IEG viewed the model’s exclusive focus on administrative costs as dangerously simplistic, pointing out that it disregards the benefits that effective regulation can confer on society. According to the evaluation, the SCM’s binary framing of regulation as merely a burden fails to account for its enabling functions, such as consumer protection, environmental sustainability, and market stability.
Co-author Professor Tero Erkkilä from the University of Helsinki underscores the gravity of these findings, warning that the EU’s continued reliance on flawed indicators without critical reassessment risks eroding public trust in its deregulatory agenda. He argues that “without transparent and methodologically sound evidence, the credibility of policy reforms aimed at administrative simplification is seriously compromised, threatening their practical impact and political support.”
The study, titled “What Sustains Flawed Indicators? Unpacking the EU’s Administrative Burden Agenda,” was recently published in the academic journal Policy Studies. It offers a rigorous, peer-reviewed analysis that challenges prevailing narratives around administrative burden reduction and calls for a fundamental reevaluation of the measurement tools guiding EU policymaking. The authors advocate for greater methodological transparency, the inclusion of broader regulatory impacts beyond mere administrative costs, and updated data collection standards to reflect contemporary economic realities.
More broadly, this research adds to ongoing debates within political science and public administration regarding the quantification of regulatory impacts. It highlights the dangers inherent in over-reliance on simplified metrics that may obscure complex policy trade-offs. Policymakers, academics, and stakeholders alike are urged to reconsider the foundational assumptions and quality of evidence that underpin ambitious deregulatory programs.
As the EU continues to navigate the delicate balance between fostering a competitive business environment and safeguarding societal values like sustainability and responsibility, this study serves as a timely reminder of the necessity for sound, critical research to guide decision-making. The future of regulatory governance in Europe may hinge not only on ambitious policy goals but also on the reliability and validity of the metrics used to justify them.
Subject of Research: People
Article Title: What Sustains Flawed Indicators? Unpacking the EU’s Administrative Burden Agenda
DOI: 10.1080/01442872.2025.2519297
