It is almost universally accepted that when agencies develop regulations, they should solicit early input from those affected by their decisions. Just as uncontroversial is the idea that agencies should consider multiple solutions to a policy problem before deciding on an approach.
Still, the limited research that analyzes these aspects of agency practice offers only mixed support that agencies do consider alternatives and use early public input in developing rules.
Last year, the Administrative Conference of the United States (ACUS) tasked us to conduct a further study of whether agencies engage in these practices when developing rules.
To study agency consideration of alternatives during rulemakings, we employed two approaches. First, we engaged in an intensive review of 25 economically significant regulations, sampled from both the Obama and Trump Administrations. Second, we conducted in depth interviews with officials from multiple agencies within five departments that frequently produce major regulations.
The vast majority of previous academic work on the regulatory process has found that agencies often do not seriously consider alternative regulatory policies. As such, there is seldom much opportunity for the public to provide input on possible alternatives to the policy option put forth by regulatory agencies in their notices of proposed rulemaking (NPRMs).
Our examination of the public documents associated with our sample of rules demonstrated much the same story—for the most part, agencies do not provide evidence that they have considered alternative regulatory approaches to what they propose in NPRMs.
To the extent agencies do discuss alternatives, they do not reveal them in the NPRM published in the Federal Register but tend to tuck them into supporting regulatory impact analyses—documents that can be much more difficult for the public to access. Furthermore, when agencies do discuss other potential approaches, they often focus on less realistic options, including no regulation at all or an extreme level of stringency. These less realistic options can serve to make the proposed alternative seem like the only viable option.
Still, our most striking observation was that our interviews offered a very different perspective than the regulatory documents themselves. Interviewees revealed in vivid detail that, in practice, agencies almost universally engage in contemplating and developing alternatives, particularly for complex and novel rulemakings.
This deliberation takes place with substantial input from affected publics. In many cases, it is this engagement that drives the set of alternatives considered. Nevertheless, agencies conduct this outreach outside of the view of the broader public and rarely report on it in publicly available rulemaking documents.
Moreover, we found that agencies find many different ways to go about soliciting early input—almost as many as there are regulatory agencies. Statutes and regulatory procedures formally outline some of the methods that agencies use to gather input. For example, the Environmental Protection Agency, Occupational Safety and Health Administration, and Consumer Financial Protection Bureau are required to solicit small business input through a process outlined in the Small Business Regulatory Enforcement Fairness Act.
Other agencies use advance notices of proposed rulemaking or engage in negotiated rulemaking. Even more frequently, agencies use informal methods, such as convening meetings of stakeholders and holding periodic calls with constituencies to identify issues and learn about potential solutions.
Our research also revealed some of the obstacles that agencies face when conducting early outreach on alternatives and publicizing the substance of the discussions.
These challenges include the time it takes to manage these tasks, which in turn, affects an agency’s ability to issue a rule in a timely fashion and which further extends a process that some observers already consider too onerous. In certain instances, statutory language, potentially in connection with judicial review, as well as political considerations, can limit agencies’ perceptions of the extent to which they can contemplate certain alternatives.
Our research findings supported a series of recommendations we made to ACUS to attempt to build on the successful, but sometimes, idiosyncratic practices that agencies currently employ to gather information on regulatory alternatives. In addition, our recommendations account for the fact that these robust approaches are not always documented in public rulemaking documents.
We believe there would be a significant benefit to finding ways for agencies to communicate with each other best practices in soliciting input and considering alternatives. In addition, agencies could share their experiences with pilot projects they conduct to find new methods focused on early consideration of alternatives.
Because ACUS issues recommendations directed toward agencies of the executive branch, it focused on what these agencies can do to encourage input and to publicize information on alternatives to their preferred policies. But we also believe that Congress and the Office of Management and Budget can take steps that would encourage agencies to engage in these valuable activities. Introducing incentives for agencies to expand upon and disclose their early consultations, and to do more to consider alternatives, would improve discourse on regulatory decisions.
We do recognize that many agencies already seriously engage with the public on regulatory alternatives. We also recognize, though, that there are constraints on their abilities to do more in this regard. Helping agencies better work within these constraints—and loosening them when possible—would make for a more transparent regulatory process and, likely, better regulations.
Still, the discrepancy we identified between public-facing documents, such as NPRMs, and agency practices produces challenges for more than just researchers studying the regulatory process. It is through these public documents that individuals outside of the agency ecosystem learn about regulations. These same documents also play important roles in subsequent legal proceedings.
If an agency considers an alternative policy to the one it chooses to propose, but members of the public do not know about it, how should that affect their evaluation of the efficacy of the rulemaking process, both with respect to that rule and more generally? The quality of public input on proposed rules ultimately depends on agencies informing the public of a realistic range of alternative options.