Marcus Peacock, Sofie E. Miller, & Daniel R. Pérez
Introduction: Evidence-Based Regulation (EBR)
Regulation may have a larger impact on society than any other single federal policymaking process. Regulations protect public health, promote economic growth, and help preserve our environment. Various estimates of regulation’s impact on society vary from over $260 billion to over $2 trillion. By comparison, the total of all federal funding for research and development, for instance, is less than $160 billion a year.
The Regulatory Process Differs from Other Policymaking
As the Commission examines strategies to better build evidence-based programs and policies throughout government, it is vital to understand the regulatory policymaking process already incorporates significant requirements regarding the collection, use and accessibility of data that differ from other policymaking processes. For instance, the Administrative Procedure Act of 1946 (the APA) requires regulatory agencies to both disclose, as well as request from the public, data or other information pertinent to a rulemaking. Likewise, the APA compels agencies to justify most regulatory decisions based on the data, analyses, and other information collected and made part of a publicly available record. If, for instance, a decision appears “arbitrary and capricious” compared to the evidence in the public record the resulting regulation may be vacated.
The APA is not the only important mandate affecting the collection, dissemination, and analysis of data during regulatory policymaking. Other requirements unique to regulations include, but are not limited to:
The Regulatory Flexibility Act of 1980 which requires agencies collect and assess data regarding the effect of major proposed regulations on small businesses;
The Unfunded Mandates Reform Act of 1995 which established a requirement to collect and analyze data regarding certain regulatory burdens on state and local governments;
The Small Business Regulatory Enforcement Fairness Act of 1996 requiring ex ante evaluations of the impact of certain regulations on small businesses;
The Congressional Review Act of 1996 requiring the submission of certain regulatory data and documentation to Congress;
The Truth in Regulating Act of 2000 allowing Congress to request the Government Accountability Office evaluate certain proposed and final rules;
Executive Orders 12866, 13563 and 13579, as well as OMB Circular A-4 regarding analyses that must be performed before certain rulemakings can be proposed or finalized; and
These Executive Orders and Executive Order 13610 also encourage agencies to perform ex post reviews of the effectiveness of regulations.
In addition, there are other laws affecting data collection and use which, while not unique to the regulatory process, originated due to concerns regarding regulations. Such laws include the Paperwork Reduction Act of 1980 (affecting the government collection of information) and the Information Quality Act of 2000 (which established minimum requirements for the utility, integrity, and objectivity of information used by government).
The unique data constraints placed on regulatory policymaking makes evidence-based regulation a distinct subset of evidence-based policymaking. It means that in some situations a recommendation that may benefit most methods of policymaking may be undesirable, or even illegal, in the rulemaking process. For instance, the Commission could recommend agencies seek out particular types of data and experts in order to help determine where federal grants may have the greatest impact. Regulatory agencies who follow formal, or adjudicatory rulemaking procedures, however, may be subject to charges of inappropriate ex parte communication if they undertook the same action. Even for informal, notice-and-comment rulemaking, final actions are often subject to litigation, which places additional constraints on the evidence in the record. The Commission may well need to make recommendations that are tailored to regulatory agencies or, at least, identify which recommendations do, or do not, apply to regulatory policymaking.
In order to assist the Commission in making recommendations specific to regulatory policymaking, the following comments focus solely on the regulatory process. The Center is available to assist the Commission in determining whether other recommendations it wishes to consider may or may not improve regulatory policymaking.
A Framework for Evidence-Based Regulation
Regulators should be able to demonstrate they are benefitting peoples’ lives by creating policies that address a “compelling public need,” as directed by Executive Order 12866. Increasing the use of evidence in making regulations will make agencies smarter, improve regulatory decisions, and, ultimately, result in better outcomes for society. Recognizing this, we offer the following integrated framework describing a system that produces evidence-based regulation (EBR) (see box below). An EBR process plans for, collects, and uses evidence throughout the life of a regulation to predict, evaluate and improve outcomes.
The framework is structured around the three main phases of regulating: design, decision-making, and retrospective review. It creates a feedback loop (through retrospective review) during implementation of the rule so that data are not only used in developing the regulation but also in periodically reassessing its value and modifying the rule as appropriate. Importantly, this framework incorporates important and current requirements of the federal rulemaking process pertinent to the collection and use of data.
While it is not necessary for the Commission to endorse the EBR Framework, the Framework provides a coherent integrated system for answering a number of the Commission’s specific questions.