Journal Articles & Working Papers

These documents are the apex of the Center's academic research.  Our working papers are authored with the intention of publishing them in peer-reviewed journals at a later date, and our journal articles are setting the standard in their academic disciplines.

Responding to Mass, Computer-Generated, and Malattributed Comments

By: Steven J. Balla, Bridget C.E. Dooling, Emily Hammond, Reeve Bull, Michael Herz, Michael Livermore, & Beth Simone Noveck | April 1, 2022

In this Article, we examine whether and to what extent such submissions are problematic and make recommendations for how rulemaking agencies should respond as a matter of law, policy, and technology. Our overarching conclusion is that agencies should adopt both low- and high-tech measures to limit the negative impact of these sorts of comments. Mass, malattributed, and computer-generated comments, however, do not represent a crisis for the regulatory state at this time. They have not been found to violate federal law and do not generally undermine the integrity of notice-and-comment rulemaking, and we are not aware of evidence of widespread substantive harms in particular rulemaking efforts or to the rulemaking system overall. However, appropriate responses, especially those that take advantage of new technology, could reduce the cost and negative impacts of technology-enabled comments.

Extending Pandemic Flexibilities for Opioid Use Disorder Treatment: Authorities and Methods

By: Bridget C.E. Dooling & Laura E. Stanley | November 2, 2021

This Minnesota Law Review article evaluates two specific flexibilities granted during the COVID-19 pandemic that made it easier for patients to access buprenorphine and methadone. First, the Drug Enforcement Administration (DEA) allowed practitioners to prescribe buprenorphine using telemedicine without first conducting an in-person medical exam. Second, the Substance Abuse and Mental Health Services Administration (SAMHSA) made it easier for patients to have a take-home supply of methadone, reducing many patients’ need to make a daily trip to an opioid treatment program. The White House Office of National Drug Control Policy indicated that extending pandemic flexibilities for treating opioid use disorder is a priority for the Biden Administration, and this Essay provides a roadmap for the executive branch to do so.

While Congress could certainly make the changes permanent through legislation, this Essay provides an independent assessment of whether DEA and SAMHSA have the statutory authority to extend these flexibilities after the COVID-19 public health emergency ends by making changes to their regulations using the notice-and-comment rulemaking process under the Administrative Procedure Act (APA). The main finding is that DEA and SAMHSA have regulatory mechanisms available to extend the flexibilities described above. In addition, the U.S. HHS Secretary’s opioid-specific public health emergency declaration could offer a longer term, but still impermanent, legal pathway to extend these flexibilities beyond the current pandemic.

Diffusion or Abandonment? A Two-Wave Audit of Policymaking Innovation in China

By: Steven J. Balla & Zhoudan Xie | October 12, 2021

The notice and comment process, in which government organizations make public draft laws and regulations and solicit feedback on these proposals, is a prominent governance reform in contemporary China.  This article examines the durability of the notice and comment process as a policymaking innovation by conducting a pair of audits of the practices of dozens of central government ministries and provincial governments.  There are a number of reasons to expect that it is difficult to sustain policymaking innovations in China.  Nevertheless, the audits—which were carried out in 2014 and 2021—demonstrate that, subject to a number of constraints, the notice and comment process diffused across government organizations in the period under analysis.  Although the notice and comment process is a durable governance reform, additional research is needed before it can be concluded that it brings more than a veneer of transparency to Chinese policymaking.

Sentiment and Uncertainty about Regulation

By: Tara M. Sinclair & Zhoudan Xie | June 28, 2021

Regulatory policy can create economic and social benefits, but poorly designed or excessive regulation may generate substantial adverse effects on the economy. In this paper, we present measures of sentiment and uncertainty about regulation in the U.S. over time and examine their relationships with macroeconomic performance. We construct the measures using lexicon-based sentiment analysis of an original news corpus, which covers 493,418 news articles related to regulation from seven leading U.S. newspapers. As a result, we build monthly indexes of sentiment and uncertainty about regulation and categorical indexes for 14 regulatory policy areas from January 1985 to August 2020. Impulse response functions indicate that a negative shock to sentiment about regulation is associated with large, persistent drops in future output and employment, while increased regulatory uncertainty overall reduces output and employment temporarily. These results suggest that sentiment about regulation plays a more important economic role than uncertainty about regulation. Furthermore, economic outcomes are particularly sensitive to sentiment around transportation regulation and to uncertainty around labor regulation.

Milestones in the Evolution of the Administrative State

By: Susan E. Dudley | June 15, 2021

The modern administrative state, as measured by the number of agencies, their budgets and staffing, and the number of regulations they issue, has grown significantly over the last hundred years. This essay reviews the origins of the administrative state and identifies four milestone efforts to hold it accountable to the American people: passage of the Administrative Procedure Act in 1946, the economic deregulation of the 1970s and 1980s, requirements for ex ante regulatory impact analysis, and the establishment of White House review. These milestones reflect bipartisan consensus on appropriate constraints on executive rulemaking, but they have not succeeded in stemming the debate over the proper role for administrative agencies and the regulations they issue. New milestones may include judicial interpretations, legislative actions, and extensions to executive oversight.

Beyond Republicans and the Disapproval of Regulations: The Institutionalization of the Congressional Review Act

March 23, 2021 | By: Steven J. Balla, Bridget C.E. Dooling, Daniel R. Pérez

The Congressional Review Act (CRA), under which the United States Congress deploys expedited procedures to disapprove agency regulations, has long been viewed as a powerful but rarely exploited means of legislative oversight. This article examines legislative action—introductions, cosponsorship, and votes—on resolutions of disapproval by committees, political parties, and congressional majorities. This approach advances understanding of the CRA beyond extant emphasis on Republicans nullifying regulations in concert with co-partisan presidents immediately following transitions from Democratic administrations. A series of statistics and visualizations illustrates that both Republicans and Democrats, as well as committees of jurisdiction, have been pivotal in accounting for the persistence of action on resolutions during the twenty-five years in which the CRA has been in effect. These findings, derived from the complete set of resolutions considered between 1996 and 2020, provide evidence that the CRA has become an institutionalized instrument of oversight of regulatory policymaking.

Into the Void: The GAO's Role in the Regulatory State

January 21, 2021 | By: Bridget C.E. Dooling

Known mostly for its role as an auditor, the GAO’s activities have expanded over time. As part of this expansion, the GAO became a referee in an increasingly important part of the administrative state: determining which actions are “rules” under the Congressional Review Act. The significance of these opinions, which are not binding as a matter of law, has grown as legislators use them strategically in regulatory politics.

Bespoke Regulatory Review

January 13, 2021 | By: Bridget C.E. Dooling

Independent agencies have been reluctant to opt-in to OIRA's regulatory review, likely because they expect that OIRA review portends the end of their ability to make independent decisions...But what if it didn't? This Ohio State Law Journal article offers a new way forward.

Regulation in the Biden Administration

November 18, 2020 | By: Richard J. Pierce, Jr.

The Biden-Harris Administration will enjoy many important successes in its early days. The Executive Orders and Guidance Documents it will issue on or shortly after inauguration day will come close to restoring the regulatory environment that existed when President Trump took office. But the progressive agenda will be on hold, at least as long as Republicans control the Senate. Legislation will be rare or nonexistent, and the new administration will have trouble filling key positions. New regulations to achieve the bold actions that President Biden envisions must be well-justified and defended to survive judicial review.

Milestones in the Evolution of the Administrative State

November 18, 2020 | By: Susan E. Dudley

The modern administrative state, as measured by number of agencies, their budgets and staffing, and the number of regulations they issue, has grown significantly over the last hundred years. This essay reviews the origins of the administrative state, and identifies four milestone efforts to hold it accountable to the American people: passage of the Administrative Procedure Act in 1946, the economic deregulation of the 1970s and ‘80s, requirements for ex-ante regulatory impact analysis, and White House review. These milestones reflect bipartisan consensus on appropriate constraints on executive rulemaking, but they have not succeeded in stemming the debate over the proper role for administrative agencies and the regulations they issue. New milestones may be on the horizon related to judicial interpretations, legislative actions, and extensions to executive oversight.

The Effects of GDPR on the Digital Economy: Evidence from the Literature

September 14, 2020 | By: Aryamala Prasad & Daniel R. Pérez

In the growing digitalized world, the European Union implemented the General Data Protection Regulation (GDPR) to establish a comprehensive data protection framework across member states. Given the constitutional roots of GDPR, the EU's regulatory approach is different than other data protection regimes. The new regulation has strengthened individual rights to data protection, but it also introduced several obligations for businesses that collect and process personal data. We review the existing literature on privacy, particularly GDPR, from a policy perspective. The evidence outlines data regulation's effects on competition, innovation, marketing activities, and cross-border data flows. The discussion highlights the tradeoffs between increased regulation of data protection and its effects on the market.

Time to Give Bootleggers the Boot! The EPA turns 50.

September 14, 2020 | By: Brian F. Mannix

The Environmental Protection Agency (EPA) has an important and well-defined mission with broad public support. Too often, however, the Agency has sought to strengthen its position by aligning itself with politically powerful rent-seeking interests. There are numerous examples—most recently, the use of the renewable fuels standards to subsidize ethanol refiners and related agricultural interests. My wish for the Agency on its fiftieth birthday is that it stays focused on its own mission and remembers that old adage: “Dilution is not the solution to pollution.” 

Into the Void: GAO's Role in the Regulatory State

August 25, 2020 | By: Bridget C.E. Dooling

Known mostly for its role as an auditor, the GAO’s activities have expanded over time. As part of this expansion, the GAO became a referee in an increasingly important part of the administrative state: determining which actions are “rules” under the Congressional Review Act. The significance of these opinions, which are not binding as a matter of law, has grown as legislators use them strategically in regulatory politics.

Improvements in SEC Economic Analysis

August 19, 2020 | By: Jerry Ellig

Several D.C. Circuit decisions that remanded regulations to the Securities and Exchange Commission (SEC) between 2005 and 2011 provide a natural experiment that permits researchers to identify the correlation between judicial review, the quality of regulatory agencies’ economic analysis, and its use in regulatory decisions. SEC economic analysis improved substantially following the issuance of new staff guidance on economic analysis in 2012. Improvement occurred on all major elements that the guidance identified as important. The improvement occurred both on criteria that address “conceptual” economic analysis and on criteria that require quantification of benefits or costs to receive full credit. Although substantial room for improvement still exists, the court decisions appear to have motivated the SEC, in just a few years, to close the gap between the quality of its economic analysis and the average quality of economic analysis produced by executive branch agencies. This result holds implications not just for the debate about SEC economic analysis but also for the broader debate over the relationship between judicial review and regulatory impact analysis. It suggests that judicial review is likely to have a salutary effect on the quality of agency economic analysis.

The Durability of Regulatory Oversight

July 20, 2020 | By: Susan E. Dudley

The article, published in the Regulation & Governance journal, reflects on OIRA's evolution over the almost 40 years since the Paperwork Reduction Act created it in 1980 to understand what has made it so durable, and concludes with recommendations for allowing OIRA's roles and practices to evolve while retaining the core functions that have received bipartisan support.

Bespoke Regulatory Review

June 19, 2020 | By: Bridget C.E. Dooling

This working paper is forthcoming in The Ohio State Law Journal, and it proposes a new way forward for OIRA to perform benefit-cost analysis of draft regulations from independent agencies: bespoke regulatory review. Dooling draws on her 10+ years at OIRA in three different administrations to explain how bilateral negotiations resulting in agreements between independent regulatory agencies and OIRA could realistically fit each agency’s unique features.

Nudging the Nudger: Toward a Choice Architecture for Regulators

June 15, 2020 | By: Susan E. Dudley & Zhoudan Xie

Behavioral research has shown that individuals do not always behave in ways that match textbook definitions of rationality but are subject to cognitive biases that may lead to systematic errors in judgments and decisions. Recognizing that regulators are not immune from these cognitive irrationalities, this article explores how the institutional framework or “choice architecture” in which they operate interacts with those biases. By examining five cognitive biases that may be prevalent among regulators, it discusses the extent to which the institutions regulators face reinforce or counteract the influence of cognitive biases in regulatory decision making. Just as behavioral insights can help design a choice architecture to frame individual decisions in ways that encourage welfare‐enhancing choices, consciously designing regulators' institutional frameworks with behavioral insights in mind could lead to more public‐welfare‐enhancing policies. The article concludes with some modest ideas for improving regulators' choice architecture and suggestions for further research.

Consultation as Policymaking Innovation: Comparing Government Transparency and Public Participation in China and the United States

June 3, 2020 | By: Steven J. Balla & Zhoudan Xie

This article compares government transparency and public participation in policymaking across China and the United States. The analysis specifically focuses on the notice and comment process—government announcement of proposed policies and solicitation of public feedback—at the Chinese Ministry of Commerce (MOC) and U.S. Environmental Protection Agency (EPA). The MOC and EPA are leading organizations in the implementation of such consultation in their respective countries. Information is collected and coded for hundreds of draft regulations and thousands of public comments that occurred during the 2002–2016 period. Statistical analysis of levels of, and variation in, transparency and participation demonstrates both similarities and differences in the operation of the notice and comment process at the MOC and EPA. Transparency and participation are generally lower at the MOC than in EPA consultations. Within such constraints, however, there is evidence of standardization in the administration of consultation by the MOC. These findings suggest that differences in the Chinese and U.S. political systems, rather than issues of administrative capacity, are the primary limitations of consultation as a policymaking innovation in contemporary China.

Lost in the flood?: Agency Responsiveness to Mass Comment Campaigns in Administrative Rulemaking

May 26, 2020 | By: Steven J. Balla, Alexander R. Beck, Elizabeth Meehan, & Aryamala Prasad

This article examines agency responsiveness to mass comment campaigns – collections of identical and near‐duplicate comments sponsored by organizations and submitted by group members and supporters – in administrative rulemaking in the United States. Focusing on 1,049 mass comment campaigns that occurred during 22 Environmental Protection Agency rulemakings between 2012 and 2017, the article develops and assesses expectations regarding responsiveness to campaigns relative to comments submitted outside of campaigns. The analysis demonstrates that, procedurally, the agency references mass comment campaigns in its responses to comments, but cites campaigns at lower rates than other comments. In terms of outcomes, the agency's regulations are generally not consistent with changes requested in comments, a lack of association that holds especially for mass comment campaigns. These patterns suggest that legal imperatives trump political considerations in conditioning agency responsiveness, given that mass comment campaigns – relative to other comments – generally contain little “relevant matter.”

Online Consultation and the Institutionalization of Transparency and Participation in Chinese Policymaking

May 26, 2020 | By: Steven J. Balla & Zhoudan Xie

This article examines the institutionalization of online consultation, a prominent instrument of governance reform in contemporary China in which government organizations make public draft laws and regulations and solicit input from interested parties prior to finalizing decisions. The article specifically analyses the extent to which online consultation is a durable governance reform that enhances transparency and participation in policymaking. The analysis focuses on the Ministry of Commerce (MOC) and Guangzhou Municipal Government (GMG), leading organizations in the implementation of online consultation. Through the analysis of original datasets consisting of hundreds of policies proposed by the MOC and GMG and thousands of comments submitted in response to these drafts, the article demonstrates that online consultation has institutionalized government transparency but has not consistently enhanced public participation. Although online consultation has the potential to transform policymaking, the evidence suggests that strong confidence in this possibility is not warranted.

Retail Electric Competition and Natural Monopoly: The Shocking Truth

May 20, 2020 | By: Jerry Ellig

This working paper is a draft of a chapter in Adam Hoffer and Todd Nesbit, Regulation and Economic Opportunity: Blueprints for Reform.

Regulated monopoly remains the dominant paradigm for electricity retailing in the United States. Scholarly research, however, clearly refutes the idea that monopoly is the most efficient market structure for retail electricity sales. Contrary to natural monopoly theory, no studies find that retail competition, per se, increased prices, although several studies find that flaws in market design have led to higher prices.

Statutory Delegation, Agency Authority, and the Asymmetry of Impact Analysis

February 26, 2020 | By: Jerry Ellig & Michael Horney

This article documents the diverse degrees of discretionary authority Congress grants US executive branch agencies. It then presents a case study that systematically compares the quality of impact analysis that informed legislative and regulatory decisions on positive train control, a technology mandated by statute in 2008.

Regulating Agencies: Using Regulatory Instruments as a Pathway to Improve Benefit-Cost Analysis

February 18, 2020 | By: Christopher Carrigan, Mark Febrizio, & Stuart Shapiro

This working paper is part of a symposium hosted by the C. Boyden Gray Center for the Study of the Administrative State at George Mason University’s Antonin Scalia Law School titled Bureaucracy and Presidential Administration: Expertise and Accountability in Constitutional Government.

Regulatory Oversight and Benefit-Cost Analysis: A Historical Perspective

January 15, 2020 | By: Susan E. Dudley

The Office of Information and Regulatory Affairs (OIRA) in the Executive Office of the President coordinates the federal government’s regulatory agenda, reviews executive branch agencies’ draft regulations, and oversees government-wide information quality, peer review, privacy, and statistical policies. Remarkably, its regulatory oversight functions, and the benefit-cost framework underlying them, have not changed significantly through six very different presidential administrations. This article examines the evolution of executive regulatory oversight and analysis from the 1970s to today, exploring the reasons for its durability and whether the current imposition of a regulatory budget challenges the bipartisan nature of regulatory practice.

Pursuing Consilience: Using Behavioral Public Administration to Connect Research on Bureaucratic Red Tape, Administrative Burden, and Regulation

December 30, 2019 | By: Christopher Carrigan, Sanjay K. Pandey, & Gregg G. Van Ryzin

Behavioral public administration (BPA) research aspires not only to draw on developments in behavioral science but also, importantly, to address central themes in public administration. By focusing a symposium on bureaucratic red tape, administrative burden, and regulation, we encouraged BPA scholarship to engage with fundamental public administration topics that are also relevant for the broader literature on organizations and management. Indeed, the symposium contributions demonstrate how BPA can better meld the behavioral science and public administration literatures. They expand on existing conceptions of BPA, with respect to both methodology and topical focus, and provide a basis for demarcating what might and might not be usefully described as BPA. The symposium contributions provide a blueprint for how BPA research might usefully evolve and the introduction offers a philosophical reflection on the future development of BPA and behavioral science.

Coproduction of Regulations Under the Administrative Procedure Act: How Close is the U.S. to a Classical Liberal Regulatory System?

December 16, 2019 | By: Jerry Ellig

Aligica et al. (2019) posit that a form of public administration founded in the classical liberal tradition should recognize value heterogeneity, which would create a need for coproduction of rules and polycentricity in the production of rules. Utilizing a dataset of 130 economically significant executive branch regulations proposed between 2008 and 2013, this paper assesses whether US regulators act in a manner consistent with the predictions of their theory. US federal agencies use several methods that could facilitate coproduction of rules by stakeholders. Statistical analysis finds that agencies are more likely to employ some stakeholder participation strategies for the types of regulations that may involve more heterogeneous values. However, there is scant evidence that the stakeholder participation strategies that agencies employ more extensively when values are more heterogeneous are associated with consideration of a wider variety of alternatives. There is no evidence that agencies consider a wider scope of alternatives for regulations that may involve more heterogeneous values. Therefore, value heterogeneity and stakeholder participation have not by themselves been sufficient to move the US toward a polycentric regulatory system.

Designing a Choice Architecture for Regulators

December 03, 2019 | By: Susan E. Dudley & Zhoudan Xie

Recognizing that cognitive biases can also affect regulators themselves, this article attempts to understand how the institutional environment in which regulators operate interacts with their cognitive biases. This article offers suggestions for improving the regulatory choice architecture at federal agencies by having public managers and policy makers factor in predictable biases when regulating individual behaviors or market transactions.

Regulatory Impact Analysis and Litigation Risk

November 22, 2019 | By: Christopher Carrigan, Jerry Ellig, & Zhoudan Xie

This paper explores the role that the regulatory impact analyses (RIAs) that agencies are required to prepare for important proposed rules play in decisions by courts about whether these rules should be upheld when they are challenged after promulgation. The results suggest that better RIAs are associated with lower likelihoods that the associated rules are later invalidated by courts, provided that the associated agency explains how it used the RIA in its decision-making. When the agency does not describe how the RIA was utilized, there is no correlation between the quality of analysis and the likelihood the regulation will be invalidated. An explanation of the RIA’s role in the agency’s decision also appears to increase the likelihood that the regulation will be invalidated by inviting an increased level of court scrutiny, and as a result, the quality of the RIA must be sufficiently high to offset this effect.

Comparing a Rebated Carbon Tax with a Compensated Carbon Tax, And Revisiting the Distinction Between Economic and Social Regulation

November 19, 2019 | By: Brian F. Mannix

Part I of this paper compares and contrasts a simple carbon tax, a rebated carbon tax, and an output-compensated carbon tax, using the electric power industry to illustrate the differences. Part II of the paper explains the mathematical duality between those three price instruments and their corresponding quantity instruments: auctioned cap-and-trade and allocated cap-and-trade, both of which impose a constraint on the quantity of emissions, and emissions-rate-cap-and-trade (also called offset trading), which imposes a constraint on the emission-intensiveness of industrial output. Keeping in mind the properties of compensated demand curves, Part III of the paper argues that the mathematical form of their regulatory constraints can help explain many of the typical differences between economic and social regulation – including the tendency of economic regulatory agencies to be multi-headed “independent” agencies, their inclination to use more adjudication and formal rulemaking than is typical of social regulators, and their troubling susceptibility to agency capture.

Consultation as Policymaking Innovation

November 01, 2019 | By: Steven J. Balla & Zhoudan Xie

This article compares government transparency and public participation in consultation—a prominent instrument of policymaking innovation—across China and the United States. The analysis specifically focuses on consultation at the Chinese Ministry of Commerce (MOC) and United States Environmental Protection Agency (EPA)—leading agencies in the implementation of consultation in policymaking in their respective countries—as a means of evaluating best practices in China relative to a corresponding benchmark in the United States. The analysis reveals both similarities and differences in transparency and participation at the MOC and EPA. The findings suggest that differences in the Chinese and American political systems, rather than issues of administrative capacity, are the primary limitations of consultation as a policymaking innovation in contemporary China.

Lost in the Flood?: The Efficacy of Mass Comment Campaigns in Agency Rulemaking

October 02, 2019 | By: Steven J. Balla, Alexander R. Beck, Elizabeth Meehan, & Aryamala Prasad

By assembling information about more than 1,000 mass comment campaigns that occurred during Environmental Protection Agency rulemakings between 2012 and 2016, the analysis addresses the manner in which the agency responds to campaigns and the association between campaigns and the substance of rules.

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

September 27, 2019 | By: Steven J. Balla, Alexander R. Beck, William C. Cubbison, & Aryamala Prasad

Through an analysis of more than one thousand mass comment campaigns submitted on Environmental Protection Agency rulemakings between 2012 and 2016, this article's findings suggest that mass comment campaigns are not a phenomenon meriting unique explanation, but rather occur in a manner similar to lobbying in other policymaking venues, such as lawmaking in Congress. The research also confirms expectations that campaigns submitted by regulated entities (i.e., industries) are more substantive than campaigns generated by beneficiaries of stringent regulations (e.g., environmental advocacy groups).

Dynamic Benefit-Cost Analysis for Uncertain Futures

September 17, 2019 | By: Susan E. Dudley, Daniel R. Pérez, Brian F. Mannix, & Christopher Carrigan

Policymakers face demands to act today to protect against a wide range of future risks, and to do so without impeding economic growth. Yet traditional analytical tools may not be adequate to frame the relevant uncertainties and tradeoffs. Challenges such as climate change, nuclear war, and widespread natural disasters don't lend themselves to decision rules designed for discrete policy questions and marginal analyses. We refer to such issues as "uncertain futures."

Muddling-Through and Deep Learning for Managing Large-Scale Uncertain Risks

September 17, 2019 | By: Tony Cox

Building on Charles Lindblom's research on the limits of rational-comprehensive decision-making, Tony Cox provides insights on how machine learning can help individuals and institutions make better informed decisions - improving society's experience of 'muddling through' policymaking under uncertainty.

From Football to Oil Rigs: Risk Assessment for Combined Cyber and Physical Attacks

September 17, 2019 | By: Fred S. Roberts

Reviewing risk assessment to scenarios of terrorist attacks on critical infrastructure including U.S. sporting venues and the international maritime transportation system. Fred Roberts notes that these assessments traditionally treat physical and cyber attacks separately and are inappropriate for considering the risk of combined attacks that include both a physical and cyber component. He proposes a framework informed by expert judgment to determine whether an attacker would likely prefer executing a combined or traditional physical attack on a given target.

Nuclear War as a Global Catastrophic Risk

September 17, 2019 | By: James Scouras

James Scouras identifies nuclear war as a global catastrophic risk and suggests that multidisciplinary studies that combine insights from "historical case studies, expert elicitation, probabilistic risk assessment, complex systems theory, and other disciplines" can address many of the shortcomings of single analytic approaches. He suggests that experts can address current gaps in their assessments of the consequences of nuclear weapons by further investigating understudied phenomena (e.g., the effects of electromagnetic pulses, nuclear winter, the prolonged effects of radiation).

Responsible Precautions for Uncertain Environmental Risks

September 17, 2019 | By: W. Kip Viscusi, Joel Huber, & Jason Bell

Elaborating on best practices for decisionmakers facing low probability, high consequence hazards. Viscusi, Huber, and Bell point out that these uncertain risks create incentives to pursue suboptimal policy approaches that potentially over commit public resources to less consequential hazards.

David Versus Godzilla: Bigger Stones

September 12, 2019 | By: Jerry Ellig & Richard Williams

For nearly four decades, U.S. presidents have issued executive orders requiring agencies to conduct comprehensive regulatory impact analysis (RIA) for significant regulations to ensure that regulatory decisions solve social problems in a cost-beneficial manner. Yet experience demonstrates that agency RIAs often fail to live up to the standards enunciated in executive orders and OMB guidance. We suggest four managerial changes that could increase OIRA’s leverage.

Codifying the Cost-Benefit State

September 12, 2019 | By: Brian F. Mannix & Bridget C.E. Dooling

In this article we focus on the executive’s authority to write a cross-government “rule-on-rules” to govern regulatory analysis, including benefit-cost analysis and the courts’ authority to enforce such a rule.

OIRA Past & Future

September 12, 2019 | By: Susan E. Dudley

While some of the Office of Information and Regulatory Affair’s functions are statutorily granted, others—notably those related to regulatory policy—derive from presidential executive orders. This paper reflects on OIRA's evolution over the almost 40 years since the Paperwork Reduction Act created it in 1980 to understand what has made it so durable.

Nudging the Nudger

July 16, 2019 | By: Susan E. Dudley & Zhoudan Xie

Recognizing that “bounded rationality” also occurs in the regulatory process and building on public choice insights that focus on how institutional incentives affect behavior, this article explores the interaction between the institutions in which regulators operate and their cognitive biases. It attempts to understand the extent to which the “choice architecture” regulators face reinforces or counteracts predictable biases. Just as behavioral insights can help design a choice architecture that frames individual decisions in ways that encourage welfare-enhancing choices, designing the institutions that counter regulators’ cognitive errors could lead to more public-welfare-enhancing policies.

Organizational Process, Rulemaking Pace, and the Shadow of Judicial Review

May 17, 2019 | By: Christopher Carrigan & Russell W. Mills

This article in the Public Administration Review journal examines the relationship between how agencies organize their rulemaking routines and the resulting rules.

Restoring Internet Freedom as an example of How to Regulate

June 3, 2019 | By: Jerry Ellig

Thomas Lambert’s How to Regulate contains some simple but critical pieces of advice for regulators: (1) Diagnose the problem before settling on a solution, (2) Compare the merits (benefits and costs) of alternatives, and (3) Recognize that regulators, like the rest of us, respond to the incentives created by the organization in which they are embedded. The FCC’s Restoring Internet Freedom order presents an example of how to apply those principles in practice.

Expanding OIRA Review to IRS

May 28, 2019 | By: Bridget C.E. Dooling

Executive Order 12866 describes U.S. policy on regulatory planning and review. It directs agencies to identify the nature and significance of the problem they are trying to solve with regulation, to identify alternative solutions, to assess the quantifiable and non-quantifiable costs and benefits of each alternative, and then to choose the option that maximizes net benefits to society, taking into account distributional effects and other considerations. That policy, which has governed U.S. regulation for several decades, is managed by the Office of Information and Regulatory Affairs (OIRA). It is also subject to several exemptions. In April 2018, the U.S. Department of Treasury and the Office of Management and Budget signed a historic memorandum of agreement (MOA) narrowing one of those exemptions. The MOA expands the number of Internal Revenue Service (IRS) regulatory actions for which IRS must comply with EO 12866. This action moved tax rules out of the “presidential tax-policy blind spot” as described by Professor Clint Wallace. This working paper offers a close study of the MOA and reveals six striking features that not only affect tax regulation, but also offer intriguing possibilities for (1) scholarly understanding of OIRA as an institution and (1) the future of regulatory review of independent agencies, which is the largest remaining exemption from OIRA review.

Consultation, Participation, and the Institutionalization of Governance Reform in China

March 4, 2019 | By: Steven J. Balla & Zhoudan Xie

This article examines the institutionalization of online consultation, a prominent instrument of governance reform in China in which government officials provide interested parties with opportunities to comment on draft laws and regulations over the Internet. The analysis demonstrates that government consultation practices have institutionalized to a greater degree than the citizen feedback that occurs in response to draft laws and regulations. These results point to the conclusion that online consultation is a governance reform that has advanced transparency and (to a lesser degree) public participation, but has not eroded the Chinese Communist Party’s dominance over policymaking.

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

January 30, 2019 | By: Joseph J. Cordes & Daniel R. Pérez

Co-director Joe Cordes and senior policy analyst Daniel Pérez's article published in The Journal of Law, Economics & Policy draws on the economics of privacy literature to summarize why the costs and benefits of privacy controls should be measured in principle, discusses previous attempts to do so, and generates useful estimates of consumers' valuation of privacy.

Improving Regulatory Benefit-Cost Analysis

January 22, 2019 | By: Susan E. Dudley & Brian F. Mannix

Across developed countries, benefit-cost analysis (BCA) is the principal public policy tool for laying out available information in a way that allows policy makers to make balanced, efficient regulatory decisions in the face of limited resources. However, BCA has limitations. This article examines the institutional and technical factors limiting the use of BCA as a tool for improving regulatory policy and offers some recommendations for reducing those barriers.

Measuring Energy Efficiency: Accounting for the Hidden Costs of Product Failure

By: Art Fraas & Sofie E. Miller

DOE sets energy efficiency standards for a wide variety of consumer appliances to achieve a “significant conservation of energy.” Advocates for these standards claim that households have realized substantial cost savings with the existing standards. There is a substantial literature—although no consensus—on the effects of energy efficiency regulation, however.

Bootleggers & Baptists: The Experience of Another Regulatory Economist

November 27, 2018 | By: Susan E. Dudley

Bruce Yandle conceived the theory of Bootleggers and Baptists after working in government as a young economist in the late 1970s and 1980s. Forty years later, his insights regarding the forces that converge to support government intervention continue to explain many regulatory observations. Applying the theory to her own experience, Dudley finds that while the B&B phenomenon is universal, the nature of winning Baptist arguments can vary depending on administration, and that regulatory institutions can reinforce or counteract B&B pressures.

Statutory Rulemaking Considerations and Judicial Review of Regulatory Impact Analysis

November 1, 2018 | By: Reeve Bull & Jerry Ellig

This paper examines the various statutory standards that require agencies to conduct some form of economic analysis and explores which standards correlate with more rigorous judicial review when a rule is challenged in court and with more rigorous regulatory analysis by the agency preparing the rule. It finds that more explicit statutory standards, in which Congress both affirmatively directs the agency to consider the economic effects of proposed rules and sets forth specific factors for agencies to consider, correlate both with more stringent judicial review and with higher quality economic analysis. By contrast, when Congress sets a vague statutory standard, such as encouraging the agency to "consider" economic costs and/or benefits, the stringency of judicial review and the quality of agency economic analysis varies from case to case and rule to rule. The authors recommend that Congress adopt more explicit standards in order to achieve greater consistency in agency economic analysis and the judicial review thereof.

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.

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.

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.

Unpacking the Effects of Competing Mandates on Agency Performance

February 21, 2018 | By: Christopher Carrigan

Public administration scholars and practitioners uniformly agree that saddling agencies with multiple mandates breeds dysfunction and impedes performance. However, less is known about the mechanisms by which combining purposes has these effects. This study of a broad set of U.S. federal agencies finds support for the conventional wisdom by showing that agencies balancing greater numbers of programs perform worse. The analysis further suggests that such organizations struggle largely because they are more likely to be forced to simultaneously adopt conflicting stances toward program targets. Moreover, when programs force agencies into conflicts in which they are asked to both support and restrain the same target, the resulting uncertainty among personnel regarding agency priorities helps explain why operations are negatively impacted. Thus, it is not simply that accumulating missions impedes agency performance but rather how those competing mandates interact that can define whether an agency will struggle to achieve its objectives.

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

February 8, 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.

Clarity or collaboration: Balancing competing aims in bureaucratic design

November 26, 2017 | By: Christopher Carrigan

Following the Gulf oil spill and US housing meltdown, policy-makers revamped the associated administrative infrastructure in an effort to sharpen each agency’s focus, based on the perspective that asking an organization to fulfill competing missions undermines performance. Using a formal model, I demonstrate that priority goal ambiguity introduced when an agency balances multiple roles does have detrimental effects. Yet, assigning competing missions to one organization can be better than separating them, as the underlying tasks supporting the goals may require coordination. In fact, it is precisely when ambiguity becomes more debilitating that the importance of coordination intensifies. Moreover, if the bureau is misinformed about which goals are more valued politically, fostering uncertainty in agencies charged with multiple goals can even be beneficial. The article thus describes how such organizations function and why these arrangements persist, demonstrating that structural choices impact behavior even when agencies and overseers agree on policy objectives.

Consumer’s Guide to Regulatory Impact Analysis: Ten Tips for Being an Informed Policymaker

August 2, 2017 | By: S. Dudley, R. Belzer, G. Blomquist, T. Brennan, C. Carrigan, J. Cordes, L. Cox, A. Fraas, J. Graham, G. Gray, J. Hammitt, K. Krutilla, P. Linquiti, R. Lutter, B. Mannix, S. Shapiro, A. Smith, W. .Viscusi & R. Zerbe in the Journal of Benefit-Cost Analysis

Regulatory impact analyses (RIAs) weigh the benefits of regulations against the burdens they impose and are invaluable tools for informing decision makers. We offer 10 tips for nonspecialist policymakers and interested stakeholders who will be reading RIAs as consumers.

Reforming the Energy Policy and Conservation Act: Learning from Experience on Energy Efficiency

June 27, 2017 | By: Sofie E. Miller

The Energy Policy Conservation Act of 1975 (EPCA) grants the Department of Energy the authority to regulate the energy efficiency of everyday consumer appliances like dishwashers and refrigerators. Because these standards affect almost all households and incur such large potential benefits and costs, the underlying statute merits close inspection. This working paper provides seven recommendations for reforming EPCA to ensure that consumers do not bear disproportionate burdens as a result of energy efficiency rules.

Putting a Cap on Regulation

June 13, 2017 | By: Susan E. Dudley

President Donald Trump is moving quickly to make good on his campaign promise to reduce regulation, which he called “one of the greatest job-killers of them all.” President Donald Trump, Remarks at the Republican National Convention (July 21, 2016). During his second week in office, he signed Executive Order 13771, requiring agencies to offset the costs of new regulations by removing existing burdens. Exec. Order No. 13,771, 82 Fed. Reg. 9339 (Jan. 30, 2017). Then, at the end of February, he issued E.O. 13777, establishing mechanisms for implementing both E.O. 13771 and regulatory procedures and policies that Presidents Clinton and Obama had put in place. Exec. Order No. 13,777, 82 Fed. Reg. 12,285 (Feb. 24, 2017).

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

March 11, 2017 | By: Stuart Shapiro

Attempts by politicians to control bureaucratic decisions include both structural and procedural approaches. But how do these two modes of influence interact? This article examines the interaction between bureaucratic structure and one procedural control, the requirement that agencies conduct an analysis of their decisions prior to their issuance. Shapiro looks at this interaction in the context of two types of analysis, cost-benefit analysis and environmental impact assessment and finds that the conduct of analysis is affected by where analysts are placed in agencies. In particular, independence of analysts has a trade-off.

Is Consultation the New Normal?: Online Policymaking and Governance Reform in China

March 29, 2017 | By: Steven J. Balla

This article examines the operation of notice-and-comment-style policymaking in China. What kinds of government organizations have embraced consultation? What kind of information is disclosed during consultation? The article assembles original data on online consultation from more than one hundred central government ministries and provincial governments. The analysis shows that consultation is more commonly used by organizations that are well-resourced and that do not make policy in areas characterized by fundamental political sensitivities. Consultation holds promise as a Party-led, incremental administrative response to the governance challenges faced by contemporary China.

Retrospective Evaluation of Chemical Regulations

March 20, 2017 | By: Susan E. Dudley, OECD Environment Working Papers, No. 118

Governments generally conduct rigorous analysis of regulations aimed at reducing chemical risk before they are issued; however, due to both methodological challenges and poor incentives, these regulations are often not evaluated with the same care once they are in place. In this paper prepared for the OECD, Dudley explores practices for more consistent and robust evaluation of regulatory outcomes and concludes that a systems approach to understanding regulatory efficacy would be valuable not only for understanding the effect of past actions, but for improving future decisions and outcomes.

The Risks of Regulating in the Dark

January 18, 2017 | By: Sofie E. Miller

“Midnight” regulations are those issued after the November presidential election but before Inauguration Day as the outgoing administration attempts to finalize its regulatory policy priorities with a surge of rulemaking activity. Scholars have theorized that midnight rules are problematic because they short-circuit important procedural safeguards that ensure high-quality regulatory outcomes, like rigorous analysis, internal and external review, and public input in the rulemaking process. Stepping beyond theory, recent examples—such as the Department of Energy’s energy efficiency standards for clothes washers—illustrate that midnight rules impose real burdens.

Implementing a Two-for-One Regulatory Requirement in the U.S.

December 7, 2016 | By: Marcus Peacock

President-elect Trump endorsed “a requirement that for every new federal regulation, two existing regulations need to be eliminated” or what could be called a “two-for-one” requirement. This working paper addresses how such a process might work including its scope; what to measure; additional workload; and whether it outlasts a Trump administration.

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.

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.

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

August 31, 2016 | By: Nicholas R. 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.

How Effective Are Federally Mandated Information Disclosures?

August 30, 2016 | By: Arthur G. Fraas & Randall Lutter

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.

Capturing Regulatory Reality: Stigler's The Theory of Economic Regulation

July 4, 2016 | By: Cary Coglianese & Christopher Carrigan

This paper offers a retrospective assessment of economist George Stigler’s classic article, The Theory of Economic Regulation. Stigler argued that regulation is a product that, just like any other product, is produced in a market, and that it can be acquired from the governmental “marketplace” by business firms to serve their private interests and create barriers to entry for potential competitors. He challenged the idea that regulation arises solely to serve the public interest and demonstrated that important political advantages held by businesses can contribute to industry capture of the regulatory process. Although his argument was largely based on the theoretical framework he developed, Stigler also illustrated his insights with empirical evidence from state-level regulatory schemes, including trucking regulation and occupational licensing. In this paper, we re-examine Stigler’s argument and analysis more than forty years later. Despite the great value of Stigler’s work in illuminating the problem of regulatory capture, his influential article nevertheless did exaggerate the power of business over regulators, as he suggested the existence of nearly an iron law of business control that clearly does not exist. He also confusingly conflated elected legislators with more independent agency bureaucrats, failed to rule out the public interest theory of regulation, and relied in part on unrealistic assumptions about the political economy of regulation. Notwithstanding these shortcomings, Stigler’s ground-breaking theory holds enduring value to both scholars and policymakers, and his innovative use of economic principles and empirical analysis provides a much-needed template for the further study of regulation and regulatory institutions even today.

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.

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.

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

April 26, 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.

Regulatory Accretion: Causes and Possible Remedies

March 4, 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.

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.

Learning from Experience: Retrospective Review of Regulations in 2014

November 3, 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.

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 specialized interest groups in conditioning state resistance to federal mandates. These results suggest that state resistance can be characterized as a strategic response to federal mandates that varies systematically across types of public policies.

Whose Benefits Are They, Anyway? Examining the Benefits of Energy Efficiency Rules 2007 - 2014

September 2, 2015 | By: Sofie E. Miller

Over the past decade, regulations setting energy efficiency standards have proliferated. These rules account billions of dollars in annual regulatory benefits, but the Department of Energy relies on private benefits and benefits to residents of other countries to justify the standards, contrary to typical benefit-cost analyses. This paper examines the composition of benefits resulting from DOE’s energy efficiency rules 2007 – 2014, and finds that these rules don’t pass a traditional cost-benefit test when relying on traditional analytical assumptions.

The Role of Transparency in Regulatory Governance: Comparing US and EU Regulatory Systems

August 11, 2015 | By: Susan E. Dudley & Kai Wegrich

This review of regulatory procedures in the EU and US suggests that each values good regulatory practices, such as transparency, public consultation, and regulatory impact analysis, but emphasizes them to different degrees at different stages in the regulatory process. Particularly for regulations that address human health risks, both jurisdictions should be more transparent regarding the uncertainties surrounding estimates of regulatory outcomes and the effect of key assumptions on those estimates. A transparent process for evaluating regulatory effects ex post could also improve regulatory analysis and outcomes.

Improving Regulatory Accountability: Lessons from the Past and Prospects for the Future

July 15, 2015 | By: Susan E. Dudley

This article examines efforts by the three branches of federal government to oversee regulatory policy and procedures. It begins with a review of efforts over the last century to establish appropriate checks and balances on regulations issued by the executive branch and then evaluates current regulatory reforms that would hold the executive branch, the legislative branch, and the judicial branch more accountable for regulations and their outcomes.

Choices in Regulatory Program Design and Enforcement

June 1, 2015 | By: Christopher Carrigan & Elise Harrington

Historically, regulators have relied on a select number of strategies in designing and enforcing rules to carry out their statutory authority. Yet, in reality, a wide range of options exists which regulators can use to tailor their regulatory programs to their particular circumstances. Solving regulatory problems involves considering how to design the regulatory program as well as how to enforce that program once it is in place. This paper considers the substantial diversity that exists both in the regulatory instruments that can be used to achieve regulatory goals and the various ways that regulators might choose to ensure regulatory entities respond to regulatory demands once they are in place.

Structuring Regulators: The Effects of Organizational Design on Regulatory Behavior and Performance

June 1, 2015 | By: Christopher Carrigan & Lindsey Poole

Regulatory organizations can be structured in different ways, and choices about their organizational structure can impact regulators’ behavior and performance, both overall as well as at the level of individual employees. This paper analyzes structural decisions about regulatory organizations along both vertical and horizontal dimensions.

One Discount Rate Fits All? The Regressive Effects of DOE's Energy Efficiency Rule

May 20, 2015 | By: Sofie E. Miller

This paper examines the Department of Energy's (DOE) reliance on low discount rates to estimate the benefits of its energy efficiency standards and uses existing literature on implicit consumer discount rates to calculate a range of benefits for DOE’s furnace fan rule. While DOE calculates large net benefits from its energy efficiency rule, using discount rates that better represent average consumer time preferences shows that this standard results in net costs. Furthermore, given the variation in consumer discount rates by income, this standard is effectively a transfer payment from low- and median-income households to high-income households.

State Funeral Regulations: Inside the Black Box

May 13, 2015 | By: Jerry Ellig

This study estimates the effects of state regulations affecting funeral markets. It accounts for multiple major categories of regulations and demand inducement as well as direct price effects. While concurring with prior studies that find ready-to-embalm regulations increase funeral costs and decrease the percentage of cremations, this study finds that several other state regulations are associated with significantly higher receipts per death. The regulation with the largest apparent effect on average funeral costs is the direct disposition license, which is associated with a $1250 reduction in receipts per death. Restrictive regulations affect the revenues of funeral homes and services to a much greater extent than they affect the revenues of cemeteries and crematories, and in some cases the regulations even increase funeral homes and services’ share of industry revenues. Thus, it appears that funeral homes receive most of the benefits of regulation.

Point/Counterpoint: Valuing Internalities in Regulatory Impact Analysis

May 13, 2015 | By: Brian F. Mannix & Susan E. Dudley

In this Point/Counterpoint article series with Cass Sunstein & Hunt Allcott, Mannix & Dudley argue that allowing regulators to control consumers 'for their own good' – based on some deficiency in the consumers themselves rather than any failure in the marketplace – is to abandon any serious attempt to keep regulatory policy grounded in any objective notion of the public good.

Will the Occupational Safety and Health Administration's Proposed Standards for Occupational Exposure to Respirable Crystalline Silica Reduce Workplace Risk?

March 26, 2015 | By: Susan E. Dudley & Andrew P. Morriss

This article finds that OSHA's proposed rule would contribute little in the way of new information, particularly since it is largely based on information that is at least a decade old—a significant deficiency, given the rapidly changing conditions observed over the last 45 years. The article concludes with recommendations for alternative approaches that would be more likely to generate information needed to improve worker health outcomes.

Achieving Regulatory Policy Objectives: An Overview and Comparison of U.S. and EU Procedures

March 10, 2015 | By: Susan E. Dudley & Kai Wegrich

This paper aims to provide a descriptive analysis of procedural differences in regulatory development between the United States and the European Union to serve as a factual basis for understanding the regulatory challenges and opportunities for transatlantic trade. It summarizes regulatory procedures in each jurisdiction, dividing the process for establishing regulations into four stages: 1) agenda setting, 2) regulatory development, 3) final determination and opportunities for challenge, and 4) implementation and enforcement. After presenting the procedures in the U.S. and EU, the paper compares how the shared goals for achieving a regulatory system that is evidence based, transparent, and accountable are achieved in the two jurisdictions.

Improving Weight of Evidence Approaches to Chemical Evaluations

December 16, 2014 | By: Randall Lutter, et al.

Federal and other regulatory agencies often use or claim to use a weight of evidence (WoE) approach in chemical evaluation. Their approaches to the use of WoE, however, differ significantly, rely heavily on subjective professional judgment, and merit improvement. We review uses of WoE approaches in key articles in the peer-reviewed scientific literature, and find significant variations. We find that a hypothesis-based WoE approach, developed by Lorenz Rhomberg et al., can provide a stronger scientific basis for chemical assessment while improving transparency and preserving the appropriate scope of professional judgment. Their approach, while still evolving, relies on the explicit specification of the hypothesized basis for using the information at hand to infer the ability of an agent to cause human health impacts or, more broadly, affect other endpoints of concern. We describe and endorse such a hypothesis-based WoE approach to chemical evaluation.

The Political Transaction Costs and Uncertainties of Establishing Environmental Rights

September 24, 2014 | By: Kerry Krutilla & Alexander Alexeev

A key issue in the design of environmental polices is how environmental rights are distributed. Among the options, rights can be grandfathered to polluters or taxed or auctioned to generate public revenue. These alternatives have different political consequences, which impose different economic costs and political uncertainties. This research models political behavior around the rights establishment, and formally determines the associated welfare costs. The model includes parameters for the degree to which environmental rights are distributed between polluters and the government; the benefits of the environmental policy; the compliance costs of the policy; and the relative political power of polluters and environmentalists. The model shows that the economic costs of political behavior can significantly erode the expected value of environmental policymaking when the environmental rights are taxed or auctioned. These costs are not considered in the policy evaluations that recommend structuring environmental policy to raise revenue.

Bank Disclosure and Incentives

August 15, 2014 | By: Korok Ray

In this working paper, Korok Ray proposes a microeconomic model of a bank that acts as a financial intermediary engaging in maturity transformation, borrowing short-term debt from a market of investors to fund a long term loan to a firm. The bank installs a manager who exerts costly effort to reduce the credit risk of the loan portfolio. Disclosing this credit risk to the market increases the manager’s incentives for risk management. The market rewards the manager’s early efforts to manage risk with a lower future cost of debt. When paid on bank equity, the manager is induced to better manage risk. Disclosure therefore helps resolve the moral hazard problem inside banks.

Administrative Procedures and Political Control of the Bureaucracy

August 1, 2014 | By: Steven J. Balla

Positive theorists have argued that administrative procedures enhance political control of the bureaucracy, in part by predisposing agencies toward policy choices preferred by legislators' favored constituents. Although this “deck-stacking” argument has been both influential and controversial, few scholars have subjected it to empirical examination. This article assesses the operation of a prominent administrative procedure—the notice and comment process—in the context of Medicare physician payment reform, a fundamental restructuring of the way in which the Medicare program pays for physician services. I find, contrary to the deck-stacking thesis, that the Health Care Financing Administration (HCFA) was more responsive to physicians expecting reductions in fees than to the intended beneficiaries of the new payment system. Although these results do not necessarily imply that Congress exerted little influence over HCFA decision making, they suggest that certain administrative procedures do not operate as instruments of political control.

Determining the Proper Scope of Climate Change Benefits

June 04, 2014 | By: Ted Gayer & Kip Viscusi

This article reviews the norms for the scope of benefit assessment based on executive orders and the laws governing risk and environmental regulations. Recent assessments of climate change policies have shifted from a domestic to a worldwide benefits approach, leading to a substantial increase in the estimated benefits. In 2010 the Obama Administration's Interagency Working Group on Social Cost of Carbon developed the guidelines that provide the basis for the assessment of the benefits associated with reductions in carbon dioxide emissions. Based on the estimates in one integrated assessment model that permitted a U.S. analysis, the estimate of the average U.S. benefit is about 7 to 10 percent of the global benefit. Alternatively, if one does not rely on a direct benefit estimate but assumes that the domestic share of the benefits is proportional to the current U.S. share of the global GDP, then the domestic benefit is 23 percent of the global benefit. This article reviews specific examples of such practices for energy efficiency regulations and the broader benefit assessment guidelines that have been developed for greenhouse gas initiatives, including the CAFE rule for passenger cars and light trucks, the carbon pollution rule for existing power plants, the clothes dryer rule, and the phase out of general service incandescent lamps.

Comment on Löfstedt’s ‘The substitution principle in chemical regulation: a constructive critique’

January 02, 2014 | By: Susan E. Dudley

This commentary on Ragnar Löfstedt’s constructive critique of the substitution principle observes that while the principle is intuitively appealing, it begins to unravel on closer examination. When considering government intervention to effect societal improvements, it is important to be aware of two problems. First, predicting the actual outcome of an intervention is very difficult, and second, people disagree about what constitutes ‘societal improvements’. This commentary examines the substitution principle in light of those problems and offers a set of guiding principles for evaluating and developing alternative policy frameworks that will improve public health and welfare.

Online Consultation and Citizen Feedback in Chinese Policymaking

By: Steven J. Balla & Zhou Liao | September 1, 2013

In recent years, the Chinese government has increasingly utilised online consultation as a means of providing citizens with opportunities to offer feedback on draft laws and regulations. As little is known about the operation of online consultation, this article analyses the content of citizen feedback submitted on a revision to China's health system proposed by the National Development and Reform Commission. Citizen engagement with the political and substantive issues under consideration is crucial if online consultation is to impact government decision-making and enhance the performance of laws and regulations. This paper's main findings are that it was common for comments to address substantive issues in great depth, as well as express negative assessments of government decisions. This suggests that online consultation holds promise as an instrument of governance reform, which the Chinese Communist Party has embraced as a means of cultivating popular support.

EPA’s Retrospective Review of Regulations: Will it Reduce Manufacturing Burdens?

May 17, 2013 | By: Sofie E. Miller

Through a series of Executive Orders, President Obama has encouraged federal regulatory agencies to review existing regulations “that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.” This paper examines the initial results of that review to understand whether actions pursued under this initiative are likely to be successful at reducing regulatory burden. Since reports suggest that the manufacturing sector bears greater regulatory burdens than other sectors, and that regulations issued by the Environmental Protection Agency (EPA) impose particularly high costs on this sector, the focus here is on the expected effects on the manufacturing sector of EPA’s identified reforms.

Races, Rushes, and Runs: Taming the Turbulence in Financial Trading

January 03, 2013 | By: Brian F. Mannix

Many participants, regulators, and observers of commodity and security markets have a sense that something in recent years has gone awry: that the explosive growth of high-frequency digital trading is somehow excessive, costly, unfair, and/or destabilizing. Several ideas for changing the rules have been discussed. Without a coherent explanation of exactly what is wrong, however, it can be very difficult to develop a promising remedy.

Uncertain Benefits Estimates for Reductions in Fine Particle Concentrations

August 29, 2012 | By: Art Fraas & Randall Lutter

The Environmental Protection Agency's (EPA's) estimates of the benefits of improved air quality, especially from reduced mortality associated with reductions in fine particle concentrations, constitute the largest category of benefits from all federal regulation over the last decade. EPA develops such estimates, however, using an approach little changed since a 2002 report by the National Research Council (NRC), which was critical of EPA's methods and recommended a more comprehensive uncertainty analysis incorporating probability distributions for major sources of uncertainty. Consistent with the NRC's 2002 recommendations, we explore alternative assumptions and probability distributions for the major variables used to calculate the value of mortality benefits. For metropolitan Philadelphia, we show that uncertainty in air quality improvements and in baseline mortality have only modest effects on the distribution of estimated benefits. We analyze the effects of alternative assumptions regarding the value of reducing mortality risk, whether the toxicity is above or below the average for fine particles, and whether there is a threshold in the concentration-response relationship, and show these assumptions all have large effects on the distribution of benefits.

Improving Causal Inferences in Risk Analysis

August 24, 2012 | By: Tony Cox

Recent headlines and scientific articles projecting significant human health benefits from changes in exposures too often depend on unvalidated subjective expert judgments and modeling assumptions, especially about the causal interpretation of statistical associations. Some of these assessments are demonstrably biased toward false positives and inflated effects estimates. More objective, data-driven methods of causal analysis are available to risk analysts. These can help to reduce bias and increase the credibility and realism of health effects risk assessments and causal claims.

Perpetuating Puffery: An Analysis of the Composition of OMB's Reported Benefits of Regulation

August 14, 2012 | By: Susan E. Dudley

The Office of Management and Budget reports that the benefits of regulations issued over the last decade exceed the costs by an order of magnitude. But how accurate are those estimates? Over 80 percent of total reported regulatory benefits derive from three sources: (1) reductions of fine particles in the air as a direct result of regulation, (2) the co-benefits achieved from ancillary reductions in these particles as an indirect result of regulation, and (3) private savings for which agencies have offered no market failure explanation. This article critically examines the approaches and assumptions behind these estimates, and suggests that the reported benefits should be viewed with some skepticism.

Regulation, Jobs, and Economic Growth: An Empirical Analysis

March 12, 2012 | By: Tara M. Sinclair & Kathryn Vesey

Claims about government regulation and its detrimental effects on job creation and economic growth are currently receiving substantial attention in the public sphere. Yet, conclusive evidence demonstrating this link between regulatory activity and macroeconomic indicators remains elusive. This paper seeks to empirically examine these linkages, using the on-budget costs of regulation over time as a proxy for federal regulatory activity. This analysis finds that the macroeconomic effects of regulatory agency budgets as a whole as well as of subcategories of regulatory spending are indistinguishable from no effect based on the data and statistical methods available. This finding is generally robust throughout our sensitivity analysis. Sinclair & Vesey explore possible explanations for this finding, as well as why the results differ from other studies on the same subject. This report highlights throughout the numerous challenges associated with both accurately measuring regulatory activity and obtaining valid estimates of its effects on the macroeconomy. It also offers recommendations moving forward on how to keep the public conversation about regulation constructive and evidence-based.

Regulatory Subsidies: A Primer

March 12, 2012 | By: Brian F. Mannix

Subsidies are a commonplace feature of government programs, and can be found in regulatory programs as well as in budget expenditures and in the tax code. An accurate accounting of regulatory subsidies, accessible to the general public, could improve government regulation by helping to ensure that such subsidies are used only when, and to the degree that, they serve a sound public purpose. This is easier said than done, however. This paper explores the concept of a regulatory subsidy and review some examples. A more technical Appendix examines some of the obstacles to creating a clear accounting of regulatory subsidies, and suggest areas where useful studies might be pursued.

Review of In the Web of Politics: Three Decades of the U.S. Federal Executive

By: Steven J. Balla | November 1, 2011

Steven Balla reviews Joel Aberbach and Bert Rockman's book "In the Web of Politics: Three Decades of the U.S. Federal Executive."

(Mis)Applications of Behavioral Economics to Regulation

August 01, 2011 | By: Adam Smith

In this paper, I evaluate the recent promotion of libertarian paternalism as a viable means of coordinating market activities. In doing so, I challenge the notion that “anti-antipaternalism” logically follows from the findings in behavioral economics. For behavioral economic policy to be effective, advocates must show how policy will be rendered effectively through public institutions. I argue that the central dilemma of the field of behavioral law and economics is that it lacks analysis of the public choice architecture within which the improvement of private choice architecture would take place. Without an accompanying theory of the public institutions by which behavioral economic policy will be implemented, the
promotion of these types of policy prescriptions is premature.

Public Commenting on Federal Agency Regulations

This report, commissioned by the Administrative Conference of the United States (ACUS), investigates agency practices in soliciting, circulating, and responding to public comments during the federal rulemaking process.

Regulators and Redskins

December 17, 2010 | By: Bentley Coffey, Patrick McLaughlin, & Robert Tollison

We examine the correlation between federal government activity and the performance of the D.C. area's National Football League team, the Washington Redskins. We find a significantly positive, non-spurious, and robust correlation between the Redskins' winning percentage and the amount of federal government bureaucratic activity as measured by the number of pages in the Federal Register. Because the Redskins' performance is prototypically exogenous, we give this surprising result a causal interpretation. Drawing upon public choice theory and behavioral economics, we provide a plausible explanation for the causal mechanism: bureaucrats must make "logrolling" deals in order to expand their regulatory power, and a winning football team acts as a commonly shared source of joyous optimism to lubricate such negotiations. We do not find the same correlation when examining Congressional activity, which we attribute to legislator loyalty to their home state's team(s).

eRulemaking Challenges in the United States

November 01, 2010 | By: Rick Otis

While some eRulemaking improvements have been made, substantial opportunities remain. Many federal agencies employ complex, time consuming, and manual work processes. Public understanding, access, and engagement remains limited. Transparency continues to be circumscribed. Related activities (such as developing laws and regulations) remain distinct processes. Congressional interest is limited. Little effort seems to be dedicated to developing an overall vision for eRulemaking and putting in place the steps necessary to address these and other challenges.

Regulatory Consultation in the United States

November 01, 2010 | By: Susan E. Dudley

This paper provides an overview of the U.S. regulatory process to facilitate discussion of stakeholder consultation at the joint Bertelsmann Stiftung and George Washington University Regulatory Studies Center workshop on December 1, 2010. U.S. procedures for developing regulations derive from the U.S. Constitution and the 1946 Administrative Procedure Act (APA). While more recent laws and executive orders provide for additional analytical requirements, review, and consultation, the APA has guided the regulatory process and the role for the public for almost 65 years. This paper summarizes the Constitutional framework and the APA requirements, and then reviews the stages of rulemaking and the role for public consultation at each stage.