Stakeholder Participation and Regulatory Policymaking in the United States

America
By Steven J. Balla & Susan E. Dudley
November 07, 2014

Download the full report here

This report was prepared for the Organisation for Economic Co-operation and Development

Regulation is one of the most common and important ways in which public policy is made and implemented in the United States.[1] Agencies of the federal government issue thousands of regulations on an annual basis.[2] Although many of these actions deal with routine matters, impose minimal burdens, and in some instances reduce or eliminate existing regulatory requirements, agencies annually promulgate hundreds of new regulations with significant effects on the economy and political system.[3]

Given the importance of regulation, an underlying concern regards the nature of stakeholder participation in the regulatory process. In one respect, stakeholder participation is salient as a means through which information about the economic and political ramifications of regulations is generated.[4] In another respect, stakeholder participation serves as a vehicle through which stakeholders become deeply involved in regulatory policymaking, by, for example, engaging in a "deliberative process that aims toward the achievement of a rational consensus over the regulatory decision."[5] With this range of possibilities in mind, to what extent does stakeholder participation in practice bring principles of information provision and deliberative engagement to bear in the regulatory process?

Two central questions are salient when evaluating stakeholder participation in the regulatory process.[6] First, who participates through various instruments of stakeholder involvement? Second, does stakeholder participation affect regulatory decision making? On both dimensions, it is difficult, if not impossible, to utilize a single standard of evaluation, and therefore to construct an overarching, uncontested assessment of stakeholder participation.

In considering the nature of stakeholder participation itself, two standards of evaluation are immediately relevant. One standard is the quantity of stakeholder participation. To what extent do stakeholders take advantage of opportunities to participate in regulatory processes? A second standard is the composition of participating stakeholders. For example, do representatives of business firms and industry associations participate more frequently than consumers, environmentalists, and nongovernmental organizations (NGOs)? To what extent do individual stakeholders, as opposed to organizational representatives, participate in regulatory processes?

In one respect, value can be attached to high levels of stakeholder participation in democratic policymaking.[7] Similarly, participation by diverse arrays of stakeholders can be seen as superior to involvement on the part of narrow sets of interests. Such assessments, however, are far from certain and universal across standards of evaluation. Additional increments of stakeholder participation and diversity might, for a variety of reasons, add little to nothing to regulatory processes in terms of information provision and deliberative engagement.

Evaluating the impact of stakeholder participation on regulatory decision making is fraught with even greater uncertainty. Instruments of stakeholder participation occur within regulatory processes that are procedurally multi-faceted, making it difficult to connect specific agency decisions with particular manifestations of participation. Even if and when linkages can be made between stakeholder participation and regulatory outcomes, larger normative questions regarding the efficacy of stakeholder participation are naturally raised. For example, if regulation is not a plebiscitary process, then what should be the role, if any, of the respective quantity of participation by stakeholders representing divergent viewpoints in informing agency decisions?

In this report, we lay out the processes through which U.S. regulations are made, implemented, and evaluated, highlighting the instruments through which stakeholders participate in these processes. Our review demonstrates that there are extensive opportunities for stakeholder participation at all stages of the regulatory process. These opportunities, however, are typically oriented toward facilitating the provision of information on the part of stakeholders. Instruments of participation, in other words, do not generally advance stakeholder engagement in deliberative decision making, where deliberation is characterized by reflection on positions held by others and the possibility of changes in one's own preferences as a result of such reflection.[8]

Continue reading report




[1] A regulation is the "whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs, or accounting, or practices bearing on any of the foregoing." http://www.archives.gov/federal-register/laws/administrative-procedure/551.html.

[2] Maeve P Carey, "Counting Regulations: An Overview of Rulemaking, Types of Federal Regulations, and Pages in the Federal Register," Congressional Research Service, May 1, 2013, p. 5. http://fas.org/sgp/crs/misc/R43056.pdf.

[3] Carey, "Counting Regulations," p. 11. As defined in Executive Order 12866 (http://www.archives.gov/federal-register/executive-orders/pdf/12866.pdf),  issued by President Clinton on September 30, 1993, "significant" rules include actions that "may have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive order." The George Washington University Regulatory Studies Center tracks significant, economically significant, and major regulations issued on an annual basis. http://regulatorystudies.columbian.gwu.edu/reg-stats.

[4] Cary Coglianese, "The Internet and Citizen Participation in Rulemaking," I/S: A Journal of Law and Policy for the Information Society, Vol. 1, No. 1 (Winter 2004/2005), p. 40.

[5] Coglianese, "The Internet and Citizen Participation in Rulemaking." p. 39.

[6] William T. Gormley, Jr. and Steven J. Balla, Bureaucracy and Democracy: Accountability and Performance, 3d ed. (Washington, DC: CQ Press, 2012).

[7] Coglianese, "The Internet and Citizen Participation in Rulemaking," p. 40.

[8] James Bohman, Public Deliberation: Pluralism, Complexity, and Democracy (Cambridge, MA: The MIT Press, 2000). John S. Dryzek, Deliberative Democracy and Beyond: Liberals, Critics, Contestations (Oxford: Oxford University Press, 2002).