The need for RIA arises from the fact that regulation commonly has numerous impacts and that these are often difficult to foresee without detailed study and consultation with affected parties.
From this perspective, the central purpose of RIA is to ensure that regulation will be welfare-enhancing from the societal viewpoint - that is, that benefits will exceed costs.
Policy proposals must also quantify the regulatory burden on individuals, businesses, and community organisations under the viable options.
A RIAS is made up of six parts: description, alternatives, benefits and costs, consultation, compliance and enforcement, and contact.
In the European Commission perspective, Impact Assessment (IA) is a process aimed at structuring and supporting the development of policies.
In 2005 and 2006 the Commission updated its approach to include economic, social and environmental dimensions, thus moving In the direction of Sustainability Impact Assessment.
[9] In the United Kingdom, RIAs have for many years been a key tool in helping improve the quality of regulation and reduce unnecessary burdens on business.
The removal of the word 'Regulatory' was also a recognition that many Government burdens on business, the third sector and public bodies were not always implemented as legislation or regulations e.g. codes of practice, reporting requirements or funding guidance, and that the impacts of these measures also needed to be assessed.