Praising the Principles in Executive Order 12866

October 4, 2018

Executive Order 12866 is a surprisingly rich text, containing words that matter. The words that I like best come near the beginning: the statement of regulatory philosophy and principles. In contrast to its predecessors, which gave little more than definitions, requirements, and processes, E.O. 12866 contains an underlying philosophy embodied in 12 principles of good regulation.

The 12 principles tell federal agencies to 1) identify the problem, 2) see if existing regulations cause the problem, 3) look at alternatives to regulation as ways to solve the problem, 4) consider risks when setting regulatory priorities, 5) make regulations cost-effective, 6) assess the costs and benefits of regulation, 7) base decisions on the best available scientific, technical, and economic information, 8) evaluate different ways to regulate, 9) seek the views of state, local, and tribal governments, 10) avoid regulations that duplicate or contradict other regulations, 11) tailor regulations to impose the least burden, and 12) write rules clearly to minimize uncertainty.

The first principle is both the most important and the most obvious. Regulators should ask the basic question: “What is the problem?” No problem, no reason for regulation. If a problem can be identified, we then ask if regulation is the way to handle it. Not all problems can or should be solved through regulation. Once, however, we determine that there is a problem and regulation is the solution, the rest of E.O. 12866’s principles shine a light on how to write a good regulation. Specifically, the order encourages the use of tools that include benefit-cost analysis, the best obtainable scientific and technical information, consideration of existing regulations, and finding the least burdensome way to craft the regulation.

Another principle deserving special attention is that the regulation makers should identify and assess regulatory alternatives. Determining that a regulation is necessary does not mean that the particular regulation is the best solution to the problem. Many different regulatory actions could deal with a social problem, so good rulemaking includes consideration of alternative viable approaches. Indeed, one of the hallmarks of bad rulemaking is the absence of serious assessments of alternative regulatory actions.

Following the 12 principles tells us how to make good regulations. With these principles in place, rule makers cannot go too far wrong. If all rule makers followed these principles, the Office of Information and Regulatory Affairs (OIRA) would have significantly less to do when reviewing regulatory actions because they would see nothing but good, well-documented regulations. Minimal regulatory review and clearance would be needed to ensure getting regulation right.

In sum, the principles in E.O. 12866 point the way to a regulatory promised land. Rule makers simply need to follow them.

**This commentary reflects the views of the author, and does not represent an official position of the Society for Benefit-Cost Analysis, the Federal government, the GW Regulatory Studies Center, or the George Washington University.**