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.

Regulation magazine

CAFE and the Tension Between Optimization and Competition in Rulemaking

December 14, 2015

By Brian Mannix
Choosing regulatory options that maximize net benefits is a sound principle, but it needs to be applied with an appropriate measure of humility. Regulators may be tempted to think that they can use benefit-cost analysis to determine what is “best” for the economy, and then simply mandate it. The collateral damage to competition and innovation can easily turn an otherwise well-intentioned rule into an economic disaster. Regulatory specification of a particular technology can be especially damaging when the technology is proprietary, because then the law may simultaneously lock out competitors and lock in customers.

Literature

Regulation, Innovation, & Entrepreneurship: A Review of the Literature

December 08, 2015

By Ana Maria Zárate Moreno
The regulatory environment in which firms interact can hinder or contribute to the creation and early stage growth of new businesses as well as to the innovation process within a market. This document reviews the literature that explores the empirical relationship between regulation and innovation and regulation and entrepreneurship, focusing on the effects of regulatory quality across countries. The thematic analysis conducted in this literature review indicates that institutions matter for economic activities and that regulation, as an important part of the institutional environment, is a central aspect of the ecosystem for innovation and entrepreneurial engagement.

Identifying Regulations Affecting International Trade and Investment: Better Classification Could Improve Regulatory Cooperation

Identifying Regulations Affecting International Trade and Investment: Better Classification Could Improve Regulatory Cooperation

November 10, 2015

By Daniel R. Pérez
Early notice of upcoming regulations that are likely to affect international trade and investment helps U.S. citizens and companies as well as our trading partners. The U.S. has tasked its regulatory agencies with flagging such rules in the semiannual Unified Agenda before they are issued. We compared the number of rules that agencies flagged as likely to have an international impact from 2008 through 2014 with the number of rules we identified, based on our criteria, that were likely to have such an impact. Agencies are currently identifying less than 30% of these rules.

Agency use of retrospective review of regulations

Learning from Experience: Retrospective Review of Regulations in 2014

November 03, 2015

By Sofie E. Miller
Through a series of Executive Orders, President Obama has encouraged federal regulatory agencies to review existing regulations and to “modify, streamline, expand, or repeal them in accordance with what has been learned.” Learning from experience is an important part of a healthy regulatory process, so multiple government guidelines instruct agencies to incorporate retrospective review plans into their proposals during the rulemaking process. Our latest research finds that, despite these guidelines, agencies are not planning prospectively for ex post analysis of their rules.

JPP

Salience, complexity and state resistance to federal mandates

October 28, 2015

By Steven J. Balla & Christopher J. Deering
Although state resistance to federal mandates is a prevalent characteristic of contemporary American federalism, little is known about the factors that separate resisting states from states that do not oppose federal policy. This article examines state resistance through a framework that classifies public policies by salience and complexity and identifies societal interests and government officials who are hypothesised to influence policy making on issues of varying types. These hypotheses are investigated in the context of state resistance to four federal laws – the Patient Protection and Affordable Care Act, No Child Left Behind Act, Help America Vote Act and REAL ID Act. The results of the statistical analysis demonstrate the centrality of the characteristics of citizens, elected officials and specialised interest groups in conditioning state resistance to federal mandates. These results suggest that state resistance can be characterised as a strategic response to federal mandates that varies systematically across types of public policies.