Supreme Court Economic Review

Benefit-Cost Analysis as a Check on Administrative Discretion

August 06, 2018

By Brian F. Mannix
Benefit-cost analysis (BCA) continues to be the principal tool used by American presidents to guide the discretionary decisions of regulatory agencies under their supervision, and increasingly it is viewed by the courts as an important consideration for agencies to take into account in justifying their regulatory decisions. This paper argues that BCA is properly viewed, not simply as a technocratic planning tool, but as a solution to a principal-agent problem. Specifically, it is intended to test whether an agency can demonstrate that it is acting in the public interest. Viewed in this light, some common analytical practices used by regulatory agencies become questionable. A BCA should not, for example, use an assumption that consumers are irrational to support a claim that coercive regulation is making them better off. Consumer sovereignty is axiomatic in BCA, and an agency that uses BCA to justify its actions must accept individuals’ judgments about their own welfare.

Supreme Court Economic Review

Improving Regulatory Science: A Case Study of the National Ambient Air Quality Standards

August 02, 2018

By Susan E. Dudley & Marcus Peacock
This paper explores the motivations and institutional incentives of participants involved in the development of regulation aimed at reducing health risks, with a goal of understanding and identifying solutions to what the Bipartisan Policy Center has characterized as “a tendency to frame regulatory issues as debates solely about science, regardless of the actual subject in dispute, [that] is at the root of the stalemate and acrimony all too present in the regulatory system today.” We focus our analysis with a case study of the procedures for developing National Ambient Air Quality Standards under the Clean Air Act, and attempt to identify procedural approaches that bring greater diversity (in data, expertise, experience, and accountability) into the decision process.

First 18 months chart

Trump Administration Picks up the Regulatory Pace in its Second Year

August 01, 2018

By Bridget C.E. Dooling
With the first 18 months of the Trump Administration complete, we can check in on his regulatory activity to date. This new analysis shows that Trump's regulatory activity is 70% lower than it was at the same point in the Obama Administration; a striking result for an administration that has made regulatory reform a signature issue.

Image of Zhoudan Xie and Daniel R. Pérez

A Taxonomy of Regulatory Forms

May 30, 2018

By: Zhoudan Xie & Daniel R. Pérez
This Regulatory Insight addresses the information gap in how regulations are measured when determining their effect on economic growth and other macroeconomic measures by developing a taxonomy of regulatory forms. In partnership with the U.S. Department of Agriculture, this framework allows regulations to be classified by the form they employ to achieve the stated regulatory outcomes. We expect this taxonomy to also be applicable to industries outside of agriculture, and to be utilized by researchers and analysts in a wide range of fields as a framework for informing research on the relative effectiveness of different regulatory forms to address market and social problems.

Spam

Where's the Spam? Mass Comment Campaigns in Agency Rulemaking

April 02, 2018

By: Steven J. Balla, Alexander R. Beck, William C. Cubbison, & Aryamala Prasad
This article examines the occurrence and nature of mass comment campaigns in rulemaking at the Environmental Protection Agency (EPA) between 2012 and 2016. The analysis demonstrates that campaigns of more duplicate or near-duplicate comments occur across issue areas under EPA jurisdictions, and that broad societal constituencies—such as environmentalists—are more active in sponsoring campaigns than specific interests negatively affected by stringent regulations. These findings in some respects confirm and in other respects challenge existing understandings of mass comment campaign participation in administrative rulemaking.

agency org chart

Organization, Process, and Agency Rulemaking

March 09, 2018

By Christopher Carrigan & Russell Mills
In this working paper, Christopher Carrigan and Russell Mills demonstrate how variation in the design of rulemaking procedures inside regulatory agencies affects the resulting rules. By employing a novel dataset tracking job functions of agency rule contacts for over 200 economically significant rules, the authors find that expanding the breadth of personnel types closely involved in a rulemaking reduces both the time it takes to promulgate the rule and the resulting detail with which it is presented. This work demonstrates how theories describing the implications of assigning team participants distinct roles in private organizations translate to government rulemaking.

magnifying glass

A Proposed Framework for Evidence-Based Regulation

February 22, 2018

By Marcus Peacock, Sofie E. Miller, & Daniel R. Pérez
Policymakers and scholars have given serious thought to how evidence-based approaches can improve policymaking, but using evidence to improve regulatory outcomes requires a separate framework than the one currently in use. This paper details how the regulatory process differs from other federal policymaking and establishes a framework for evidence-based regulation (EBR) to improve regulatory outcomes by planning for, collecting, and using evidence throughout the life a regulation. The authors discuss the main barriers that regulatory agencies face in implementing an EBR approach and advance concrete proposals for overcoming these barriers.

SRA logo

Book Review of Andrew W. Lo's "Review of Adaptive Markets: Financial Evolution at the Speed of Thought"

February 08, 2018

By Susan E. Dudley
What drives our responses to risk and uncertainty, and how can we improve them? In his 2017 book, Adaptive Markets: Financial Evolution at the Speed of Thought, MIT Sloan finance professor Andrew Lo answers that question using evolutionary concepts and insights, including competition, innovation, reproduction, and adaptation.

Index of Economic Freedom 2017

International Regulatory Indexes at a Glance

January 29, 2018

By Zhoudan Xie
This Regulatory Insight provides an overview of how regulation is measured and compared across countries, compares the available measures, and examines where the U.S. stands relative to other countries. Internationally-comparable measures of regulation are mostly constructed through the composite index approach. This Insight reviews five international regulatory indexes measuring economic freedom, business/competition friendliness, and social regulation. The indexes differ significantly in terms of the coverage of regulation, methodologies and data. Even indexes measuring the same dimension of regulation can present different results, depending on the specific variables and data chosen.

President Trump signing EO

2017 Regulatory Year in Review

December 18, 2017

By Zhoudan Xie & Sofie E. Miller

This Regulatory Insight highlights ten important regulatory and deregulatory themes that garnered attention—and changed the regulatory landscape—in 2017. Regulatory policy was a focal point of 2017, and notable executive orders, rulemaking, and legislation all contributed to this theme--including the Congressional Review Act, net neutrality, the President's deregulatory agenda, and more.

Internet privacy

Measuring Costs and Benefits of Privacy Controls: Conceptual Issues and Empirical Estimates

November 06, 2017

By Joseph J. Cordes, Co-Director & Daniel R. Pérez, Policy Analyst
As personal information becomes increasingly available to internet providers, the government, and employers, a lively debate has emerged about the role of public policy in ensuring a proper balance between parties who benefit from greater access to information and the protection of individual rights to privacy. Additionally, emerging technologies such as highly automated vehicles and unmanned aircraft systems bring privacy concerns to the forefront—particularly regarding the proper role of federal regulatory agencies. Agency rulemaking requires a thorough analysis of regulatory benefits and costs. Our paper hopes to contribute to the development and greater use of empirical measures of consumer privacy.

Corn production

Regulatory Impact on Corn Farming: Transatlantic Agriculture & Regulation Working Paper Series: No. 5

October 24, 2017

By Daniel R. Pérez, Aryamala Prasad, & Zhoudan Xie
The final chapter of the five part series with the USDA and the GW Regulatory Studies Center examines the impact of environmental and food safety regulations on corn production in the U.S. and EU. Using France and Spain as case studies to illustrate the differences that result from EU member states’ translation and implementation of agricultural regulations at the country level, the chapter identifies and discusses regulations affecting corn production and estimates the economic impact of each regulation at the farm level. The use of a typical farm approach demonstrates relative differences in outcomes for farms among different jurisdictions.

pesticides spray

Water Pollution from Agriculture: Transatlantic Agriculture & Regulation Working Paper Series: No. 4

October 12, 2017

By Peter Linquiti & Zhoudan Xie
Part four of the five part series with the USDA and the GW Regulatory Studies Center analyzes how the U.S. and EU regulate water pollution from agriculture. Linquiti and Xie first review the core environmental problem—the process by which nutrient pollution occurs and the adverse environmental and human health consequences it causes. It also provides an overview of the institutions and policy frameworks that shape water quality polices and proceeds by characterizing the specific policy instruments used in the U.S. and the EU to implement these policy frameworks.

US and EU trade

Transatlantic Approaches to Agriculture Policy: Transatlantic Agriculture & Regulation Working Paper Series: No. 3

October 04, 2017

By Susan E. Dudley, Lydia Holmes, Daniel R. Pérez, Aryamala Prasad, & Zhoudan Xie
Part three of the five part series with the USDA and the GW Regulatory Studies Center presents several notable differences in policy approaches towards agriculture between the U.S. and EU. It first provides an overview of the U.S. and EU procedures for developing and implementing regulation and how they differ. It then describes how the jurisdictions approach regulation affecting the agricultural sector. Finally, it discusses and compares five areas of agricultural policy in each jurisdiction: (i) agri-environmental regulations, (ii) organic farming, (iii) genetically modified organisms, (iv) pesticides, and (v) fertilizers.

Agriculture trade

Agricultural Productivity and the Impact of Regulation: Transatlantic Agriculture & Regulation Working Paper Series: No. 2

September 26, 2017

By Aryamala Prasad & Zhoudan Xie
Part two of the five part series with the USDA and the GW Regulatory Studies Center focuses on the impact of agricultural policy, specifically regulation, in influencing agricultural productivity across jurisdictions. It begins by tracing agricultural growth in the EU and U.S. to illustrate their respective trends for agricultural productivity. Then, drawing from the literature, it identifies measures and methodologies used to estimate the impact of regulation on productivity. Finally, it outlines important differences regarding how regulations can affect agricultural productivity and other measures of agricultural performance such as output and production costs in the EU and the U.S.