Raad Mahmoud Al-Tal

Whenever a draft law, regulation, or policy is introduced, attention is typically directed toward its constitutional validity, legal consistency, and legislative drafting quality. These are undoubtedly essential considerations, as the credibility of any piece of legislation begins with its legal soundness. In Jordan, proposed legislation is subject to a comprehensive review by the Bureau of Legislation and Opinion, covering legal, economic, financial, social, and political dimensions.

Yet an important question remains: To what extent do economic impact assessments provide policymakers with an accurate and comprehensive understanding of a proposed law’s likely consequences?

History offers many examples of laws and regulations that were introduced with the best intentions but later produced unintended economic outcomes. Some increased production costs, discouraged investment, raised consumer prices, or imposed additional burdens on businesses and public finances. Others, however, delivered positive economic results because their potential impacts had been carefully assessed and understood before implementation.

A crucial distinction must be made between financial impact and economic impact. Financial impact focuses on revenues, expenditures, cash flows, and their implications for public finances. Economic impact, by contrast, is much broader. It examines how a decision influences economic growth, employment, investment, productivity, exports, competitiveness, and household incomes.

For this reason, economic impact assessment has become a cornerstone of policymaking in many advanced economies. Governments no longer ask only whether a proposed law is legally valid. They also ask whether it is economically justified, who will bear its costs, who will benefit from it, and whether alternative approaches could achieve the same objectives more efficiently.

In the United Kingdom, major legislative and regulatory proposals undergo rigorous Regulatory Impact Assessments that evaluate expected costs and benefits for businesses, consumers, and government before implementation. Similar practices exist in Canada, Australia, New Zealand, and many member states of the Organisation for Economic Co-operation and Development (OECD), where impact assessments have become an integral part of the policy cycle. These countries recognize a simple reality: legislation is not merely a legal instrument; it is also an economic one that shapes the behavior of individuals, firms, and markets. Consequently, evaluating economic consequences is as important as ensuring legal compliance.

In Jordan, the Bureau of Legislation and Opinion has played a vital role in strengthening the legislative framework and ensuring legal coherence across laws and regulations. Its contribution to improving legislative quality has been significant. However, the demands of the current phase, particularly under the Economic Modernization Vision, call for strengthening the economic dimension of legislative review through specialized expertise alongside legal, financial, and social analysis.

This raises the need to consider amending the Bureau’s governing framework to require government entities to conduct comprehensive economic and financial impact assessments before submitting draft legislation, regulations, or major policy decisions for review, particularly when they carry significant economic implications. Another option would be to establish a specialized economic assessment unit within the Bureau itself, responsible for reviewing such studies and providing an independent economic opinion before proposals are elevated to decision-makers.

Just as legislation today cannot proceed without legal scrutiny, it should not move forward without a thorough economic evaluation. Policymakers need clear assessments of how proposed measures will affect investment, employment, competitiveness, productivity, public revenues, and consumer prices. If legal opinions determine whether a proposal is legally sound, economic impact assessments should determine whether it is economically beneficial, cost-effective, and aligned with national development objectives.

The benefits of such an approach extend far beyond improving legislative quality. It can reduce the need for frequent amendments, minimize unintended consequences, strengthen policy predictability, and enhance investor confidence. Investors seek stable and transparent regulatory environments, and legislation grounded in rigorous economic analysis is generally more durable and effective in achieving its intended goals.

Moreover, integrating specialized economic expertise into the legislative process would help institutionalize evidence-based policymaking. Modern economies can no longer afford to discover the consequences of policy decisions only after they have been implemented. Effective governance requires anticipating impacts, quantifying costs and benefits, and evaluating alternatives before decisions are made.

Countries that have built efficient legislative systems understand that the quality of legislation is not measured solely by the legal precision of its wording. It is measured equally by its ability to generate positive economic and social outcomes at the lowest possible cost.

An effective and efficient decision is not simply one that can be implemented legally; it is one that creates value for the economy and society. Likewise, successful legislation is not merely a well-written legal text. It is a practical instrument that encourages investment, supports growth, enhances competitiveness, and improves the lives of citizens. For that reason, incorporating specialized economic impact assessment into the legislative process is no longer an institutional luxury. It is an essential requirement for sustainable development and successful economic modernization.