Cato Institute essay on regulatory humility.
President Biden’s Modernizing Regulatory Review memorandum signals continuity in some regulatory practices and big shifts in others. It reaffirms longstanding bipartisan principles that require agencies to analyze the effects of alternative regulatory approaches, with the objective of ensuring that federal policies do more good than harm. These principles are essential to what I have called “regulatory humility,” which appreciates that even the most well‐intentioned and intelligent regulators lack essential information on how policies will work in practice.
The memorandum also directs the Office of Management and Budget (OMB) to work with agencies to develop new recommendations to improve and modernize regulatory review to “promote public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity, and the interests of future generations.” It focuses on several areas of reform, some of which have more promise than others.
It specifically calls for revisions to OMB’s Circular A‑4, the 2003 blueprint for conducting regulatory analysis. Circular A‑4 is an authoritative source on regulatory analysis throughout the world because it is grounded in theory and empirical evidence, rather than prevailing political passions. It was developed through an open process that has also contributed to its legitimacy and stability across administrations. Although there likely are “developments in scientific and economic understanding” that could improve these guidelines, OMB should make modifications judiciously. The Biden administration should ensure opportunities for meaningful public comment and avoid engaging only with selected “stakeholders.”