Commentary Archive

Daniel R. Perez

Early Notice from U.S. Agencies Could Help Avoid Creating Barriers to Trade

November 11, 2015

By Daniel R. Pérez
11/11/15 - Countries engaged in international trade and investment have been largely successful at reducing many of the traditional barriers to the flow of goods, such as tariffs. As a result, trade deals are increasingly prioritizing the elimination of unnecessary regulatory differences between trade partners which act as a lingering barrier to trade, creating inefficiencies that unnecessarily raise costs for businesses and consumers. This commentary addresses an important mechanism in successful international regulatory cooperation involving efforts by trade partners to provide advanced notice of upcoming regulations that are likely to affect international trade and investment.

Sofie Miller

Evaluating Retrospective Review of Regulations in 2014

November 04, 2015

By Sofie E. Miller
11/4/15 - 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. This commentary reviews our latest research, which finds that agencies are not planning prospectively for ex post analysis of their rules. We provide three recommendations to agencies for building their rules to enable better measurement ex post.

Wallace Oates

Personal reflections on a consummate professor: Wallace Oates, 1937 - 2015

November 03, 2015

By Albert McGartland, Ph.D.
11/3/15 - Guest post by Albert McGartland reflecting on the life of Wallace Oates: I was a first-year grad student at the University of Maryland in 1979 when I learned that Wally Oates was joining the Economics Department and would teach Environmental Economics in the fall. At the time, I harbored no thoughts of a field in Environmental Economics, but nor did I want to pass up an opportunity to learn from one of our leading academics. I decided to take Wally’s course. The rest, as they say, is history. I never looked back.

Susan Dudley

The Ozone Charade

October 28, 2015

By Susan E. Dudley, Director
10/28/15 - EPA asserts its new 70 parts per billion (ppb) ozone standard, published in the Federal Register on October 26, will avoid 320 to 660 premature deaths each year. However, the agency’s own analysis claims that a more stringent 65 ppb standard would have saved an additional 1,274 to 2,660 lives per year. This commentary examines how, if EPA is required to base the standard on health considerations only, without considering economic factors, can it reconcile setting a standard that leaves so many lives unprotected?

Sofie Miller

OMB Reports Higher Costs and Lower Benefits in 2015 Draft Report

October 21, 2015

by Sofie E. Miller, Senior Policy Analyst
10/21/15 - On October 16, the Office Management and Budget released its annual Draft Report to Congress on the Benefits and Costs of Federal Regulations, which provides a window into regulatory activity conducted by federal agencies in Fiscal Year 2014. The Report estimates that the new regulations issued last fiscal year have both higher costs and lower benefits than those issued in FY 2013, and that the Environmental Protection Agency remains by far the largest contributor to both regulatory costs and benefits in this Report.

Brian Mannix

The Tension between Optimization and Competition in Rulemaking: The Case of Proposed Fuel-Efficiency Standards for Trucks

October 08, 2015

by Brian Mannix, Research Professor
10/8/15 - Choosing regulatory options that maximize net benefits is a sound principle, but it needs to be applied with an appropriate measure of humility. Regulators may be tempted to think that they can use benefit-cost analysis to determine what is “best” for the economy, and then simply mandate it. The collateral damage to competition and innovation can easily turn an otherwise well-intentioned rule into an economic disaster. Regulatory specification of a particular technology can be especially damaging when the technology is proprietary, because then the law may simultaneously lock out competitors and lock in customers.

Susan Dudley

EPA’s Ozone Rule and the Scientization of Policy

October 07, 2015

by Susan E. Dudley, Director
10/7/15 - This commentary questions EPA’s claim that its new ozone standard is based purely on science, untainted by economic or political considerations. When science is the only factor that can legally be considered in setting a standard, no one is immune to the temptation to put a spin on science to advance policy goals. Current procedures are not transparent and lead to distortions and false precision in the presentation of scientific information, blurring the line between science and policy and contributing to what Dudley calls the “scientization of policy.”

Friedrich von Hayek

With Data, Will Regulators Show Humility or Hubris?

September 22, 2015

by Susan E. Dudley, Director
Rapid technological change, big data, and greater interconnectivity are poised to transform the way we live and work. In the hands of entrepreneurs subject to competitive pressures and a light regulatory hand, they can yield innovations beyond our imagination. For this to occur, however, government regulators must resist the temptation to think that more data should be used to design more detailed interventions in private activities. Rather, guided by the principle of “epistemic humility,” regulation should be designed to encourage competition and experimentation.

Sofie Miller

The Questionable Benefits of Energy Efficiency Standards

September 15, 2015

By Sofie E. Miller, Senior Policy Analyst
American consumers may not be aware that, over the past decade, government agencies have issued a spate of new regulations establishing costly energy efficiency standards for appliances that most households rely on for everyday tasks, including dishwashers, microwaves, clothes washers, furnaces, and air conditioners. Our latest working paper finds that, while the costs of the standards are very real, the benefits that the Department of Energy relies on to justify its rules don’t stand up to scrutiny.

Consistent Inconsistencies

Consistent Inconsistencies: Misclassification of Rules Could Hamper International Regulatory Cooperation

August 26, 2015

By Daniel R. Pérez
International regulatory cooperation is a central component of current U.S. efforts to negotiate international trade agreements. As traditional barriers to trade decline, understanding regulatory impacts on trade and investment is of particular importance for economic growth, given that these agreements include trade partners that accounted for almost $3 trillion in goods and services traded in 2013. Executive Order 13609 tasked executive regulatory agencies with identifying regulations that were likely to have a significant impact on international trade and investment. We examined the performance of agencies in identifying such regulations and our research suggests there is significant room for improvement.


Considering the Cumulative Effects of Regulation

August 10, 2015

By Susan E. Dudley, Director
Longstanding executive and legislative directives require agencies to analyze the expected impact of new regulatory requirements before they are issued. While important, this ex-ante regulation-by-regulation analysis may not account for the cumulative effect of regulations on society or specific sectors of the economy. Dudley's reflections were triggered by insightful questions for the record posed by Senator Joni Ernst after a joint hearing of the Senate Budget and Homeland Security and Government Affairs on June 23 Senate.

corn field

Learning from the Past: It's Time to Reevaluate the Renewable Fuel Standards

July 28, 2015

By Sofie E. Miller, Senior Policy Analyst
The Environmental Protection Agency’s latest Renewable Fuel Standard proposal would require 17.4 billion gallons of biofuel to be blended intro transportation fuel in 2016. Unfortunately, as we explain in a comment filed on EPA’s proposal, this biofuel mandate is bad news for the environment and for American consumers. Given the availability of new information on the impacts of the program, Congress should reevaluate whether the Renewable Fuel Standard is accomplishing what Congress intended.

International flags at the UN

Regulatory Pay as you Go: Lessons from Other Countries

July 15, 2015

By Ana Maria Zarate Moreno, Research Assistant
The adoption of the “one in, one out” rule is becoming a popular approach to control the regulatory burden borne by businesses and citizens all over the world. This commentary presents lessons from other countries in implementing this approach. It also highlights the necessity of having established systems for controlling the flow of regulation, sound institutional quality and strong oversight in order to effectively control the regulatory burden.

Governor Larry Hogan

Hogan’s Had It with Burdensome Regulations

July 13, 2015

By Sydney E. Allen, Communications & Outreach Coordinator
On July 9, Maryland Governor Larry Hogan established the state's Regulatory Reform Commission with a focus on 10 key issue areas. The 13 + member commission aims to analyze and review Maryland regulations with public input. In 2014, Maryland ranked lower than 35 states in terms of business friendly regulations - can this Commission improve the state's regulatory woes? The conversation has begun but the regulatory hurdles don't end at the Maryland state line.

Federal agency building

Senate Explores a Regulatory Budget to Increase Transparency, Oversight

July 07, 2015

By Saayee Arumugam, Summer Fellow
Spending programs in the fiscal budget come with salient costs: the taxes (or debt) used to finance them. Regulations can accomplish similar policy objectives, but with less transparent costs and muted oversight. Both on-budget programs and regulations are designed to achieve policy goals, but without budgetary constraints, the American regulatory regime continues to be additive in nature and lacks incentives for retrospective evaluation of effectiveness.