pedestrians

Utilizing Behavioral Insights (without Romance): An Inquiry into the Choice Architecture of Public Decision-Making

October 19, 2016

By Adam C. Smith
To justify regulations that reduce consumer choice, policymakers are increasingly relying on observations from behavioral economics suggesting that people don’t always make rational decisions. However, behavioral economists generally neglect a complementary examination of public decision-makers. Through a public choice lens, Smith compares two public agencies influenced by behavioral economics, the U.S. CFPB and U.K Behavioral Insights Team, and finds that their different institutional structures lead to divergent policy outcomes. He concludes that for policies to be welfare-improving, they must be based on an understanding of public choice architecture as well as private choice architecture.

Stack of money

How Declining Budgets at U.S. Regulatory Agencies Could Improve Performance

September 19, 2016

By Marcus Peacock
Although spending on U.S. regulatory programs has doubled in the last 20 years, that trend is unlikely to last. How these programs manage budget cuts will determine whether downsizing harms or helps regulatory performance. Leaders of regulatory agencies must avoid satisfying tighter budgets with temporary “mindless austerity” measures that anger workers. Instead managers should use scarcity to find, with workers, “frugal innovations” that can significantly and permanently improve program value. In this working paper, Peacock examines how agencies can get budget cuts to help rather than harm.

Dept. of Treasury

Improving the Accountability of Federal Regulatory Agencies, Part III: What Reforms Work Best

September 12, 2016

By Marcus Peacock
What can regulatory reformers learn from past government-wide reform efforts? Two previous Regulatory Insights describe eight major U.S. government initiatives that failed to improve accountability. This Insight identifies a lack of leadership and unfaithful execution by agency personnel as barriers to success. These problems could be addressed by: (1) codification of reform; (2) adopting modest reform proposals (incrementalism); (3) creating third parties to implement/enforce reform; and (4) establishing competition between regulatory programs such as through a regulatory budget.

EPA

Evaluation at EPA: Determinants of the Environmental Protection Agency's Capacity to Supply Program Evaluation

August 31, 2016

By Nick Hart
Since EPA’s inception, it has emphasized the use of prospective policy analysis tools to inform environmental decisions, including cost-benefit analysis and risk assessment. However, EPA and others rarely evaluate these same environmental policies after implementation, to inform future policy development or to modify existing policies. Nicholas Hart, PhD recently completed his dissertation in GW’s Trachtenberg School of Public Policy and Public Administration focusing on the processes and determinants that affect evaluation supply at EPA. Hart identifies ten key factors that constituted both barriers to and facilitators of evaluation. His policy brief summarizes these factors and his conclusions.

JBCA

How Effective Are Federally Mandated Information Disclosures?

August 30, 2016

by Arthur G. Fraas and Randall Lutter in the Journal of Benefit-Cost Analysis
Government mandates to disclose information are a standard response to problems of asymmetric information. Fraas and Lutter examine recent major U.S. regulations issued between 2008 and 2013 to identify disclosure mandates and look for quantitative assessments of their effectiveness in improving comprehension. The authors find that although mandated disclosures underpin a number of major federal regulatory initiatives, agencies infrequently issue such mandates based on scientifically valid, controlled studies of the improvements in comprehension from such disclosure and recommend reforms to improve federally mandated information disclosure.

U.S. Capitol

Structure vs. Process: Examining the Interaction between Bureaucratic Organization and Analytical Requirements

July 25, 2016

By Stuart Shapiro
Attempts by politicians to control bureaucratic decisions include both structural organization and procedural rules. But how do these interact? This article examines the relationship between bureaucratic structure and the requirement that agencies conduct an analysis of their decisions prior to their issuance in the context of two types of analysis: cost-benefit analysis and environmental impact assessment. The research finds that conduct of analysis is affected by where analysts are placed in agencies. In particular independence of analysts has a tradeoff. Despite this, analysts expressed a clear preference for independence.

Washington Monument

Improving the Accountability of Federal Regulatory Agencies, Part II: Assessing Eight Government-wide Accountability Reforms

June 28, 2016

By Marcus Peacock
Greater accountability at regulatory agencies is desirable because (1) the public has a right to know how government affects society and (2) greater accountability improves agency performance. As described in the last Insight in this series, the U.S. attempted eight major government-wide initiatives to increase accountability at federal agencies, including regulatory agencies. This Insight reviews public and expert opinion, which indicate these initiatives failed to improve accountability. New proposals to improve accountability at regulatory agencies could benefit from understanding why previous efforts fell short.

U.S. Capitol

Improving the Accountability of Federal Regulatory Agencies, Part I: A Review of Government-Wide Efforts

June 22, 2016

By Marcus Peacock
Given the broad interest in improving regulatory accountability, especially by learning from the actual results achieved by previous regulations, it is ironic that little has been done to learn from the results of past regulatory reform efforts. Before mandating further requirements, Congress and the President should examine past government-wide accountability initiatives to assess their outcomes. This first Regulatory Policy Insight in a series of three on improving regulatory accountability identifies eight major past initiatives. Future Insights will examine the relative success of these eight reforms and what lessons they offer.

NYU Law

The Regulatory Budget Debate

June 20, 2016

By Richard J. Pierce, Jr.
For 35 years OIRA has used benefit-cost-analysis to review major rules issued by executive branch agencies. Generally, OIRA reviews major proposed agency rules to determine whether their expected benefits to society exceed their expected costs to society. If the estimated costs of a proposed rule exceed its estimated benefits, OIRA urges the agency to change the rule in ways that will increase its benefits and reduce its costs. For almost as long as OIRA has been applying BCA, some of the smartest and most productive progressive scholars have criticized the role of OIRA generally and OIRA’s use of BCA in particular. It is time for those scholars to stop wasting their energy tilting at windmills and put their extraordinary talents to use in more promising endeavors.

NYU Journal

Can Fiscal Budget Concepts Improve Regulation?

June 13, 2016

By Susan E. Dudley
Despite efforts to ensure that new regulations provide net benefits to citizens, the accumulation of regulations threatens economic growth and well-being. As a result, Congress is exploring the possibility that applying fiscal budgeting concepts to regulation could bring more accountability and transparency to the regulatory process. This Essay in the NYU Journal of Legislation and Public Policy examines the advantages and challenges of applying regulatory budgeting practices and draws some preliminary conclusions based on successful experiences in other countries.

White House logo

Regulatory Reforms to Enhance Competition: Recommendations for Implementing Executive Order 13725

May 11, 2016

By Sofie E. Miller, Daniel R. Pérez, Susan E. Dudley & Brian Mannix
The federal government has a long track record of issuing regulations that create barriers to competition. President Obama recently signed Executive Order 13725 instructing federal agencies to identify and address barriers to competition, which provides agencies with a valuable opportunity to reevaluate the effects of existing rules. This Insight suggests several areas of regulatory policy where federal regulations have hindered, rather than helped, competition, and recommends that agencies take this opportunity to reduce these regulatory barriers to competition.

Regulation and Governance

What’s wrong with the back of the envelope? A call for simple (and timely) benefit–cost analysis

May 02, 2016

By Chris Carrigan & Stuart Shapiro
Observers across the ideological spectrum have criticized benefit–cost analysis for as long as it has been part of the rulemaking process. Still, proponents and detractors agree that analysis has morphed into a mechanism often used by agencies to justify regulatory decisions already made. We argue that a simpler analysis of more alternatives conducted earlier in the regulatory process can resuscitate it as a tool to inform policy. Recognizing that requiring a procedure does not ensure that regulators will follow it, we offer possible remedies, including strengthening or relaxing subsequent review of proposed rules, which raise the cost of circumventing the reform or lower the cost of following it.

Briefly Noted

Briefly Noted: The Disappearing Benefits of Energy Efficiency

April 14, 2016

By Sofie E. Miller
In the past decade, federal agencies have greatly increased the number of regulations establishing energy efficiency standards for household and commercial appliances. Because these rules affect nearly all Americans, it is important to examine the rationale that regulators use to justify them. Regulators have increasingly cited behavioral economics and “consumer irrationality” to justify standards that restrict the products that consumers can buy. However, this raises the question: why do consumers need government protection from their own purchase choices? This article examines whether consumers truly benefit from efficiency standards that restrict their options.

Regulation Magazine

Briefly Noted: Obama’s Midnight

April 14, 2016

By Daniel R. Pérez
President Obama’s regulatory output to date has already surpassed both of his predecessors, and it is understandable that observers are carefully considering the possible effects of a surge in rules published within this administration’s midnight period. A significant increase in regulatory output is likely to reduce the amount of time available for agencies to seriously consider public comment, affect the quality of oversight that OIRA is able to provide, and also add considerable political constraints on the incoming administration.

ALR cover

Regulatory Accretion: Causes and Possible Remedies

March 04, 2016

By Sofie E. Miller & Susan E. Dudley
In this response in the ALR Accord to Reeve Bull’s article, "Building a Framework for Governance: Retrospective Review and Rulemaking Petitions," Miller and Dudley address the inadequacy of the current retrospective review regime, examine the key causes of this failure, and address Bull’s proposal to encourage private parties to initiate review via rulemaking petitions. Miller and Dudley conclude that, while public participation is beneficial in retrospective review, agencies themselves could better this process by writing plans for review at the outset and improving regulatory outcomes.