The scope and number of regulations continues to grow, but proof that problems are being solved remains elusive. Several reform efforts are focusing on ways to improve economic analysis so that agencies can make better decisions about when and how to use regulation for problem-solving. New research indicates several reforms that could have a positive impact.

1. Test-Driving Some Regulatory Process
Reforms
Jerry Ellig
Senior Research Fellow

3. •Systemic Problem
•Alternatives
•Benefits (or other desired outcomes)
•Costs
Key Elements of Regulatory Impact Analysis

4. Office of Management and Budget
•Prepares president’s budget submission
•Oversees management of the executive branch
•Oversees regulation
•Office of Information and Regulatory Affairs
•Oversees/approves all agencies’ information collection
that creates paperwork burdens
•Oversees executive branch regulation and regulatory
analysis

5. Mercatus Regulatory Report Card
5 Complete analysis of all or almost
all aspects, with one or more “best
practices”
4 Reasonably thorough analysis of
most aspects and/or shows at
least one "best practice"
3 Reasonably thorough analysis of
some aspects
2 Some relevant discussion with
some documentation of analysis
1 Perfunctory statement with little
explanation or documentation
0 Little or no relevant content
12 criteria
0-5 points each
Total Score: 0-60 points

6. Quality and Use of RIAs Falls Short

7. 4 Key Elements (108 regulations, 2008-12)

8. Use of RIAs in Economically Significant Regs, 2008-12

9. • Decisions made before analysis
• Rushed regulations have lower-quality analysis
• Little provision for retrospective analysis when regulations
are promulgated
• Average quality is similar across administrations
• Administrations demand less thorough analysis from agencies
with missions closer to the administration’s policy priorities
• Independent agencies’ analysis has the same problems
Other Research Findings

10. • Require more deliberate/higher-quality information-gathering
• Require publication of analysis before regulation is written
• Require formal hearings after regulation is proposed
• Require retrospective review plan when regulation is proposed
• Expand OIRA’s size/influence to make review more thorough and
effective
• Extend RIA requirements to independent agencies
• Provide for judicial review of RIAs
Process Reforms that Might Address These Issues

11. Are Analogous Activities Associated with Better Analysis?
Proposed Reform Current Analogous Variables
Improved information-gathering Pre-proposal Request for Information,
Advisory Committee, State Consultation,
Public Meeting
Publish analysis before writing regulation ANPRM or prior NPRM in same
proceeding
Formal hearings Commitment to post-proposal public
hearing
Retrospective review plan required Regulation is a revision of a prior
regulation (voluntary or required by law)
OIRA review Length of OIRA review time, OIRA headed
by acting administrator

12. Improved Information-Gathering

13. ANPRM and Prior NPRM

14. Post-Proposal Public Hearing

15. Rule Results from Revision of Prior Rule

16. OIRA and Change in Score

17. SEC Analysis vs. Executive Branch Analysis

18. SEC vs. Executive Branch Financial Regulations