Cracking the Code: Rulemaking for humans and machines

Overview

Every year, people file taxes, claim government support payments and determine their eligibility for government services (e.g. state-based childcare or visas). Businesses apply to governments for operating licences or submit information to government entities that allows their compliance against regulations to be assessed. Government is subject to independent audits that verify its adherence to the rules that it itself has created to guide the use of its power. These rules – the rules made by government – affect all domains of our lives, from the personal to the professional. As such, the way these rules are created, made available, consumed, understood or misunderstood, and enforced is of significant interest to those seeking to improve the function and effectiveness of government. Governments have long refined and developed their rulemaking processes (for instance, as captured in the OECD Recommendation on Regulatory Policy and Governance) – but the digital revolution requires a transformational shift.

Rules as Code (RaC) aims to change government rulemaking. Fundamentally, RaC proposes to create a machine-consumable version of some types of government rules, to exist alongside the existing natural language counterpart. More than simply a technocratic solution, however, RaC represents a transformational shift in how governments create rules, and how third parties consume them. By integrating technology into rulemaking from the outset, it brings the policy development and implementation components of the current process closer together to better align intent and outcomes. In allowing third parties to consume an official version of machine-consumable government rules, it also promises the potential for quicker service delivery, a more consistent application of the rules and greater efficiencies for
rule takers.

RaC would result in significant changes to the current way that rules are made by government. Typically, an idea or need for a rule emerges and rule makers (lawmakers, often informed by policy experts) design its intent and expected outcomes. This is transferred to drafting experts (commonly, lawyers) who interpret and formalise this intent into a rule-like form (often in the form of a law or regulation). The rules are adopted politically and then passed to government service design and delivery teams for implementation. Third parties affected by the rules, such as people, businesses or government itself, attempt to interpret the natural language versions of rules to assess their rights and responsibilities. These rules are then often translated into machine-consumable code on an entity-by-entity basis (e.g. to inform business rule systems) and used to enable activities including compliance or service delivery. While this is a simplified account, it highlights a number of challenges that attend the current state of rulemaking. For example, it can be linear and siloed (in that it is composed of a series of stages that each rely on specialists with a specific expertise) and considerations around implementation are often left until late in the process.

Why has RaC emerged?

Rulemaking is a foundational, long-standing function of governments. Accordingly, the way governments create rules (and third parties consume them) is well established. Yet, governments now face a vastly different operating environment that has resulted in, or amplified, a number of pressures associated with current rulemaking. Firstly, the current system creates the need for repeated interpretation and translation, from natural language rules into the machine-consumable rules almost ubiquitously required for modern service delivery and compliance efforts. Secondly, it restricts the capacity of rule makers to deal with increasingly complex policy and regulatory challenges that bridge policy domains and demand quick, effective public responses. Finally, the current system creates inefficiencies
resulting from the manual translation of government rules into machine-consumable forms at the enterprise level.

RaC suggests that, if government were to assume the role of digital rule maker, it could create stronger alignment between rule intent and implementation. In offering the potential for greater ex ante modelling, RaC could better aid policy makers dealing with complex and cross-cutting issues. It also proposes to speed up public service delivery, as coded rules are made immediately applicable and consumable by relevant parties once a given rule is ratified. It could also drive a more consistent application of the rules, as third parties are enabled to consume an official version of machine-consumable rules directly from government. This may mean efficiencies for businesses, as well as lower regulatory compliance burdens. Providing machine-consumable rules as a public good could therefore help unlock economic benefits, improve public service delivery and enable more innovation.

RaC has strong potential, but remains an early stage concept with much to test. With only limited experimentation to date and no known large-scale approaches currently embedded in and across governments, understanding of the concept, its potential benefits and challenges remains limited. For example, there remain unresolved questions about the legal status of machine-consumable laws, how versions should be governed and how errors in the coded form of rules could be identified and corrected.

This primer has been developed to help inform governments’ understanding and use of a RaC approach. It explores the RaC concept, the challenges facing current rulemaking and why a new approach is needed. It considers the potential benefits of such an approach, as well as the necessary considerations, and outlines potential scenarios that may characterise its development. It also contains a practical aspect, including a set of principles on which RaC initiatives can be based. Adopting the principles of: transparency, accountability, traceability, appropriateness and appealability, availability and interoperability, and security, should help ensure that RaC initiatives realise the value that they promise.

Following the success of early RaC initiatives, notably that of the New Zealand Government’s Better Rules programme and France’s efforts to ‘transformer la loi en code informatique’, global interest in RaC continues to grow rapidly. In Australia, Canada, France, Germany and Jersey (United Kingdom), public sector teams are experimenting with the concept and its potential application. It is hoped that this primer will help governments progress towards new and better rulemaking that helps people, businesses and governments prosper.

Video presentation

On 14 October 2020, OPSI held a launch session for Cracking the Code: Rulemaking for humans and machines to present its overall findings and conclusions.