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

U.S. Capitol

by Marcus Peacock, Distinguished Research Professor

June 22, 2016

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Abstract

Policymakers in the United States show persistent interest in improving the accountability of federal regulatory agencies. Before mandating further requirements, Congress and the President should (1) identify government-wide accountability initiatives that were already attempted at regulatory agencies and (2) assess the outcome of those efforts. The relative success or failure of these efforts could help guide the design and implementation of future regulatory reforms. This Regulatory Insight is the first in a series of 3 on this topic. It fulfills the first of these tasks by identifying eight major government-wide accountability initiatives in the United States that were also implemented at regulatory agencies.

Washington Wants to Improve Regulatory Accountability

There is considerable and persistent interest in making federal regulatory agencies in the United States more accountable for their activities. For instance, Congress[1] and the President[2] recently acted on proposals requiring agencies to evaluate the actual benefits and costs caused by regulations after they have been implemented—“retrospective review.” It is presumed such information will hold regulators more responsible for achieving desirable results and improve future regulatory actions.

However, the ex post evaluation of regulatory outcomes represents only one of a significant number of changes being considered to improve the accountability of regulatory agencies. Researchers, federal managers and others are also examining, for instance, tightening congressional and judicial review of new regulations,[3] imposing a “regulatory budget” on agencies,[4] systematically examining the quality of internal agency processes,[5] and having agencies adopt attributes common to organizations that demonstrate “regulatory excellence.”[6]

A Retrospective Review of Previous Accountability Efforts

Given the keen interest in improving regulatory accountability, especially by learning from the actual results achieved by previous regulations, it would be ironic to not consider the outcomes of previous attempts to improve the performance of U.S. regulatory agencies before embarking on yet more regulatory reform. If the assessment of past regulations will lead to better future regulations, then, likewise, learning from past accountability initiatives should lead to better accountability efforts in the future.

Unfortunately, no one has examined the record of government-wide accountability initiatives in the context of regulatory reform. Since the birth of the modern regulatory state in the 1930s, the federal government has attempted several reforms targeted solely at regulatory agencies. These include, for instance, the Regulatory Flexibility Act of 1980,[7] the Unfunded Mandates Reform Act of 1995,[8] and the Small Business Regulatory Enforcement Fairness Act of 1996.[9] Two reforms, in particular, stand out as resulting in sweeping and lasting changes across most regulatory agencies: the Administrative Procedure Act of 1946[10] and increased internal Executive Branch benefit/cost review and analyses initiated in 1981 by Presidential Executive Order.[11] The implementation of these regulatory reforms has been, and continues to be, the subject of significant observation and criticism.[12]

However, the broad reform initiatives have gone largely unnoticed by regulatory experts since they were part of government-wide reforms even though they were implemented by most regulatory programs. Examining the results of these broader efforts may provide important lessons for regulatory reformers. Identifying these major government-wide initiatives is the purpose of this Insight.

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[1]    H.R. 185, The Regulatory Accountability Act of 2015, passed the House of Representatives on 7 January 2015. S. 1817, The Smarter Regs Act of 2015, was reported out of the Senate Committee on Homeland Security and Government Affairs on 7 October 2015.

[2]    See, for instance, Executive Order 13610, “Identifying and Reducing Regulatory Burdens,” 10 May 2012.

[3]    For a discussion of various recent proposals to increase congressional and judicial oversight see Susan E. Dudley, “Improving Regulatory Accountability: Lessons from the Past and Prospects for the Future,” Case Western Reserve Law Review, Volume 65: Issue 4, 2015, pp. 1051-1056.

[4]    See, for instance, Susan E. Dudley, “Accounting for the True Cost of Regulation: Exploring the Possibility of a Regulatory Budget,” testimony before the United States Senate Committee on the Budget and Committee on Homeland Security and Governmental Affairs, 23 June 2015.

[5]    See, for instance, U.S. Environmental Protection Agency/ECOS, “Lean in Government Starter Kit: Version 3.0”, April 2014.

[6]    See Cary Coglianese, “Listening, Learning, Leading: A Framework for Regulatory Excellence,” Penn Program on Regulation and the Alberta Energy Regulator, 2015, pp. 8-29.

[7]    Pub. L. 96-354, 94 Stat 1164.

[8]    Pub. L. 104-4, 109 Stat. 48.

[9]    Pub. L. 104-121, 110 Stat. 857.

[11]   Executive Order 12291, “Federal Regulation,” 17 February 1981.

[12]   See, for instance, Stuart Shapiro and Deanna Moran, “The Checkered History of Regulatory Reform Since the APA,” NYU Journal of Law and Public Policy, Vol. 19:1, May 2016, pp. 141-182.