Progress and prospects toward our understanding of the evolution of dosage compensation

In many eukaryotic organisms, gender is determined by a pair of heteromorphic sex chromosomes. Degeneration of the non-recombining Y chromosome is a general facet of sex chromosome evolution. Selective pressure to restore expression levels of X-linked genes relative to autosomes accompanies Y-chromosome degeneration, thus driving the evolution of dosage compensation mechanisms. This review focuses on evolutionary aspects of dosage compensation, in light of recent advances in comparative and functional genomics that have substantially increased our understanding of the molecular mechanisms of dosage compensation and how it evolved. We review processes involved in sex chromosome evolution, and discuss the dynamic interaction between Y degeneration and the acquisition of dosage compensation. We compare mechanisms of dosage compensation and the origin of dosage compensation genes between different taxa and comment on sex chromosomes that apparently lack compensation mechanisms. Finally, we discuss how dosage compensation systems can also influence the evolution of well-established sex chromosomes

New genetic loci link adipose and insulin biology to body fat distribution.

Body fat distribution is a heritable trait and a well-established predictor of adverse metabolic outcomes, independent of overall adiposity. To increase our understanding of the genetic basis of body fat distribution and its molecular links to cardiometabolic traits, here we conduct genome-wide association meta-analyses of traits related to waist and hip circumferences in up to 224,459 individuals. We identify 49 loci (33 new) associated with waist-to-hip ratio adjusted for body mass index (BMI), and an additional 19 loci newly associated with related waist and hip circumference measures (P < 5 × 10(-8)). In total, 20 of the 49 waist-to-hip ratio adjusted for BMI loci show significant sexual dimorphism, 19 of which display a stronger effect in women. The identified loci were enriched for genes expressed in adipose tissue and for putative regulatory elements in adipocytes. Pathway analyses implicated adipogenesis, angiogenesis, transcriptional regulation and insulin resistance as processes affecting fat distribution, providing insight into potential pathophysiological mechanisms

Regulatory Trial and Error

Over numerous millennia of cultural evolution, human beings have devised few if any methods of decision-making more effective than old-fashioned “trial and error.” At its most basic level, the scientific method is an applied form of this concept: formulate a hypothesis, test it against observed reality, and retain or reject it depending upon the results. So, too, are democracy and free market economics: a “good” result is most likely to emerge from millions of individualized actors making decisions on the basis of limited information, and that result should improve over time as better information becomes available. The modern regulatory state, which first took shape in the United States during the Progressive Era of the late nineteenth and early twentieth centuries, has traditionally favored a more deductive, less empirically-minded approach to decision-making. President Woodrow Wilson, one of the intellectual architects of the regulatory state, argued that the “science of administration” would extract government policymaking from the confused melee that characterized democratic republicanism, turning it over to well-trained experts who would ply their superior knowledge to carry out the popular will while maximizing efficiency, fairness, and other important policy goals. Regardless of whether one sees the modern regulatory state as a godsend or an anathema, scholars of the political left, right, and center would all likely agree that the science of administration has received a mixed reception among the American public. Calls to rein in regulators have proven to be a highly effective political strategy, deployed by Republican and Democratic politicians alike, suggesting that the American people have limited faith in the wisdom and efficacy of administrative science. In one sense, the unpopularity of modern bureaucracy is not an especially compelling argument against it. It is of course entirely possible that a large segment of the populace or even elected representatives may vote for policies that undermine their own interests, especially when a small but highly influential group of citizens or businesses has a strong incentive to turn public opinion in a particular direction. But the sustained popular angst surrounding regulatory decision-making more broadly, rather than specific policy decisions that create winners and losers, suggests something more profound than overweening skepticism is at play. This angst, I would argue, is at least partly caused by very pervasive and fundamental philosophical doubts concerning the soundness of the science of administration. And the numerous calls for regulatory reform over the past five or so decades, I would suggest, are at least partly geared toward pushing power down from centralized bureaucracies and reintroducing a more trial-and-error-based system of policymaking. A quick survey of some of these efforts is illustrative: These efforts have undoubtedly promoted a more empirical, evidence-based system of regulatory policymaking. But the reforms have largely proceeded pell-mell, characterized by a series of one-off efforts of the President or Congress to improve some discrete aspects of the regulatory state. As members of Congress and the President contemplate further reform to the regulatory state, they should strive to capture the enormous benefits of trial-and-error decision-making. Two basic principles should guide this effort. The first is that regulatory policy never can nor should be fixed in stone. Trial and error is a never-ending process that does not yield a “right” answer, only marginally better ones. As such, a robust system of retrospective review is fundamental to any well-functioning regulatory system. And a forcing mechanism such as a regulatory budget may be needed to overcome the profound disincentives to effective retrospective review, including “the Ikea effect” (in which people tend to overvalue things they themselves created) and the reluctance of regulators and regulatory parties alike to shift course once they have incurred sunk costs. At the same time, regulatory dynamism is not an unalloyed virtue. The rule of law is partly premised on the notion that some degree of stability is needed to allow private actors to plan their future conduct. Indeed, Professor Aaron Nielson has even argued that some measure of regulatory “ossification” can be a good thing, ensuring that the rules are not constantly changing and disrupting settled expectations. Retrospective review efforts should therefore be sensitive to both the benefits and costs of regulatory change. The second principle is that regulatory policy should be designed to promote learning. It is valuable to think of regulatory learning as a hierarchy. Agencies should, at the very least, always be aware of relevant precedents. In certain cases, they may go much further, actually designing a rule to allow them to test its efficacy and easily readjust it if a better course of action arises. It is possible, as I outline below, to provide a very basic sketch of what such a regulatory learning hierarchy may involve. The four tiers of such a hierarchy track in many important respects a recent recommendation on regulatory learning issued by the Administrative Conference of the United States. Tier One: Regulatory Awareness. Before regulating, the agency should ask whether regulation is indeed necessary, considering existing efforts of state governments and self-regulatory regimes erected by private actors. This question is similar to the one posed by the European concept of subsidiarity. Currently Executive Order 12,866 and Circular A-4 call upon agencies to ask if regulation is truly needed, but federal agencies often pay inadequate attention to this critical first step, simply assuming the existence of a problem. If the agency decides federal intervention is needed, in determining how to craft its intervention it should consider the successes and failures of existing regulatory efforts, including its own past actions, state and international precedents, and self-regulatory regimes. Tier Two: Natural Experiments. Regulations will often naturally be designed in a way to allow comparative learning. For example, consider a regulation in which firms with annual revenues below $100 million are exempt from its requirements. The agency can take advantage of this threshold effect, looking at firms just above ($101 million) and below ($99 million) the cutoff to determine how the regulation affects virtually identical parties. Similarly, when only one or a handful of regulated entities requests and receives a waiver or exemption, the agency can compare the results in regulated and unregulated firms. This information should prove valuable in deciding whether to later modify or eliminate the regulation. Tier Three: Built-in Variation. Agencies should, wherever possible, strive to use performance standards rather than design standards, setting an overarching goal but leaving it up to state regulators or private parties to determine how that goal will be met. Sometimes, this may involve allowing variation for a period of time until evidence emerges indicating that one approach is superior to another, at which point the agency may enshrine that approach in a rule. At other times, the agency might allow for ongoing variation and adaptation, as it does in programs involving cooperative federalism. Tier Four: Policy Pilots. Agencies can actually design some rules as experiments, with random assignment of regulated entities to a control group or to one or more treatment groups. This is the most ambitious approach to regulatory learning and the most analogous to what a scientist does in a laboratory. It raises the most issues too, including legal concerns about equal protection and reasoned decision-making, and potential problems related to the fairness and efficiency of treating similarly situated businesses or regulatory beneficiaries differently for arbitrary reasons. And, of course, conditions will change over time, such that the agency may need to reconduct the experiment at a future date. At the end of the day, any system of governmental regulation cannot match the level of dynamism that prevails in an unregulated market, which much more effectively captures the benefits related to trial and error but which may sometimes be less effective in protecting other societal goals such as equality or fairness. But government regulators can make much more effective use of trial and error than what they currently do, learning from existing variations and explicitly designing rules to allow for variation that will promote ongoing improvement. Although human ingenuity may yet devise a more effective means of learning than humble trial and error, that day has not yet arrived, and regulators would do well to design their rules accordingly

Reimagining the Public’s Role in Agency Rulemaking

Americans, perhaps more than any other group of people living or dead, are obsessed with politics. Within a matter of days after a new President’s setting up shop in the Oval Office, media pundits begin obsessing over who the President’s successor might be. U.S. Senate and U.S. House of Representatives elections draw less interest, and state and local politics less interest still. Regulatory agencies, it seems, receive the least interest of all. This is a shame, because, at least at the federal level, far more lawmaking takes place in the dimly lit corridors of the numerous agencies, bureaus, and commissions scattered across the Beltway than in the hallowed halls of Congress. On the rare occasions when Americans do take interest in a regulatory topic, many bring to it the same philosophy that they apply to all other aspects of civil life: The people rule, and their popularly expressed will must dictate how the government acts. To see this phenomenon in action, consider the piles of public comments filed every year by ordinary citizens. These comments either express agreement or disagreement with certain proposed agency actions. Of course, in the realm of regulatory policymaking, this philosophy of popular will dictating governmental action would seem fundamentally misguided. Congress created regulatory agencies with the express goal of de-politicizing certain governmental activities. The entire administrative state is built on the notion that Congress dictates certain policy goals and then highly trained experts who staff the federal bureaucracy figure out the most effective, efficient way of achieving those goals. The idea that regulators would somehow seek to ascertain public opinion and then translate it into a set of policies is completely foreign to the whole enterprise. Yet, the popular perception does not seem that unreasonable when you consider the structure of the modern administrative state. First, the notice-and-comment process is explicitly designed to allow all individuals to express their views, regardless of whether they have any expertise on, or even firsthand experience with, the problem that the proposed rule addresses. Agency officials often fuel this sentiment, throwing around phrases such as “make your voice heard” or even explicitly encouraging everyday citizens to “make noise” when they suspect most public commenters will favor their preferred outcomes. Second, Congress has often delegated so much power to administrative agencies that regulators are doing far more than merely “filling in the details” of federal statutes. When Congress sets agency officials loose with little more than a vague directive to regulate in the “public interest,” as it often has, the principle that Congress, made up of elected representatives rather than unelected bureaucrats, performs the primary lawmaking function falls by the wayside. If regulators are making basic policy decisions such as what activities should be regulated and how stringent those regulations should be, you cannot blame public commenters for wanting some say in the outcome. And as then Professor Antonin Scalia observed, allowing public input to shape agency policy perhaps reestablishes, however imperfectly, some of the political accountability that is lost when Congress delegates away its policymaking powers. Given this dynamic, one might be tempted to argue that regulators should, in fact, place greater emphasis on public opinion expressed in the notice-and-comment process than they typically have. Under existing law, there is little that prevents them from doing so. The Administrative Procedure Act requires agencies to consider the “relevant matter presented” in public comments, and no court has held that public opinion is per se relevant or irrelevant. Of course, an agency might run afoul of the law if it relied exclusively on public opinion or relied on public opinion in a way that contravened some other statutory requirement. But agencies are generally free to pick the more popular option when they have a variety of available alternatives. Moreover, if Congress persists in its reluctance to make the difficult policy decisions associated with regulatory interventions and the U.S. Supreme Court does not ratchet up the nondelegation standard, the general public should be allowed to weigh in on these decisions to the greatest extent possible. The challenge, of course, is channeling public input in a way that is actually useful and properly targeted to the types of problems an agency may be confronting. One possible approach to this problem might be picking the policy “winner” based purely on the number of public comments for and against a proposal. Experts who have considered this approach, including myself, think it is a terrible idea. As I and others have noted elsewhere, public comments are often unrepresentative of public opinion, usually reflecting only the most extreme or well-connected voices. But I would also submit that other mechanisms of integrating public opinion into regulatory policymaking are perfectly appropriate and worthy of further exploration. In at least some cases, a representative sample of citizens, rather than a small team of unelected bureaucrats, might be empowered to speak to or even decide certain issues. Fleshing out exactly how this might work in practice would need to be worked out in individual cases, but the basic outline might look as follows. For certain regulatory problems, agencies should signal that public opinion is not relevant because these problems involve almost no policymaking discretion. They consist exclusively of scientific or other technical inquiries. Consider, for instance, the question of what level of agricultural DDT usage will ensure that California Condor populations do not drop below 100 breeding pairs. It is not an easy question to answer, and an agency addressing it would be well served to receive outside input from ecologists, chemists, and other experts. No policy judgment is required. For this type of inquiry, any outside input should be limited to technical comments. Were an agency to seek public input on this sort of question, it would almost certainly receive at least some comments to the effect of “Save the condors!” or “Stop destroying America’s small farms!” Such comments are completely irrelevant to the question at hand, so the agency should ignore them. And it should make clear to prospective commenters its intent to do so. Other regulatory problems, though, do involve varying levels of policy discretion. Imagine, for example, a statute authorizing an agency to regulate DDT emissions to the extent “economically feasible.” The question of economic feasibility includes a number of embedded technical determinations including how much it would cost farmers to switch from DDT to another pesticide, as well as policy determinations including how disruptive a DDT ban would be to small farmers. Under the current notice-and-comment regime, the underlying technical and policy issues all get lumped together: The agency asks for comments on any aspect of the problem, sees what it gets, and then sorts through the responses. An agency could take a far more productive approach by first identifying the questions on which it seeks input and indicating the type of input it seeks. Regulatory decisions also often involve weighing societal costs against societal benefits. Economic analysis helps agencies make these determinations, but the question of how to weigh the various tradeoffs often comes down to a value judgment. For example, is it more important to preserve an endangered species or to save small farms from insolvency? For these types of questions, an agency should consider polling a representative group of citizens or, better still, creating a citizen jury to offer an opinion after studying the problem. These actions would give the agency a far more accurate picture of public opinion than merely soliciting public comments. Involving the public in regulatory policymaking in the ways contemplated above would pose a whole litany of challenges. Would Congress set out the technical and policy questions to be addressed when delegating rulemaking power, or would it task agencies with doing so? If the agency formulates the questions, is there a risk of its biasing the outcome based on how it frames the problem and conducts the outreach? Would the agency ever be required to honor the public’s policy preferences, which would almost certainly require statutory reform, or would public input always be treated as merely advisory? Given this uncertainty, it would be premature for Congress or even an individual agency to modify its overall public input process along these lines. Yet Congress might consider moving in this direction by supplementing or even replacing notice-and-comment requirements in specific regulatory regimes with other methods that could obtain more useful public input. Agencies could also voluntarily supplement notice and comment in appropriate cases, as a recent Administrative Conference of the United States recommendation suggests. Admittedly, this approach could impose significant costs in terms of protracting the rulemaking process. It is much easier to pose a general question and sort through the comments received. A new or modified process, however, could save time and money down the road by increasing the likelihood that the information the agency receives is useful and relevant. More significantly, overhauling the notice-and-comment process in this way would bring regulatory policymaking more into line with what the American public appears to expect from the system and would ensure that unelected decision-makers claiming to act in the public interest have some sense of what the public actually wants. At the end of the day, agency officials or, better still, members of Congress must decide the contents of the law. A more citizen-focused approach to public participation would serve to democratize and demystify the regulatory process. Ideally, it would yield policies that benefit the broader citizenry, rather than just a small coterie of well-connected players involved in rulemaking

Managing Mass Comment “Supply” by Reducing “Demand”

When the U.S. Congress enacted the Administrative Procedure Act (APA) in 1946 one of its most innovative aspects was the notice and comment process. Informal rulemaking itself was a novel approach to policymaking at the time, as many agencies previously had produced policy iteratively through decisions issued in individual cases. And the idea of allowing interested stakeholders to offer input to the agency that it was legally obligated to consider was perhaps the most unique feature of this new approach. But the framers of the APA do not appear to have given extensive thought to the precise purposes the comment process would serve. On the one hand, based on a review of the legislative history, it appears that the drafters intended the comment process to provide useful technical input to the agency. On the other hand, the drafters may have also intended it to provide a sort of democratic legitimacy by allowing the public to weigh in on an agency’s proposed actions. After all, the New Deal vastly expanded the federal regulatory state and vested extraordinary lawmaking powers in unelected agency officials, so notice and comment might have been one possible corrective that restored at least some of the policymaking power to the people. But the APA is ultimately unclear on what role, if any, public opinion is to play in the rulemaking process. This fundamental tension between the technical and democratic aspects of rulemaking has remained at the heart of the notice and comment process throughout its history. Are public comments intended to lead to more technically sophisticated rules, to give the general public an opportunity to influence the agency’s decision, or both? This tension lay dormant for many decades because notice and comment was, and largely remains, an esoteric exercise that is known mainly to a handful of Washington insiders. Virtually all of the comments came from law firms, trade groups, corporations, and NGOs, especially environmental organizations. As a result, the technical versus democratic distinction was largely an academic one, as the only comments that really mattered were those that offered useful information for the agency to consider. In recent years, however, this dynamic has begun to shift. As a result of technological developments, the notice and comment process has become better known, and e-rulemaking has made filing a comment easier. Of course, most rules still draw very limited participation. But a handful of high-profile rules, most notably the recent series of net neutrality Federal Communications Commission (FCC) rules, have drawn a massive public response involving millions of comments. In examining these high-profile rules, a clear split between agencies’ and the general public’s perspectives on the notice and comment process is apparent. In a recent report for the Administrative Conference of the United States (ACUS), for which I served as a coauthor, interviews with agency officials made it unmistakably clear that agencies view the comment process exclusively or almost exclusively through a technical lens. Our interviewees unanimously said that notice and comment is not a vote and that, to be useful, comments should contain actionable information and not mere expressions of opinion. If one considers the public perception surrounding the net neutrality rulemakings, by contrast, it is clear that the general public reaches the opposite conclusion. So where does this leave the notice and comment process? Will one perspective or the other win out? Or will government agencies just continue to muddle through, with all sides increasingly dissatisfied? If agency policymakers take a step back, they may come to see this challenge as an opportunity to use technological developments to their advantage. On the technical front, notice and comment represents a legalized version of a suggestion box, which is often the ideal mechanism for gathering dispersed information. On the policy front, it is hard to imagine a worse approach to ascertaining public opinion. No public relations firm, for instance, would design an opinion poll for which most of the intended recipients do not know it exists and participation is entirely on an opt-in basis. At least for purposes of determining public opinion, the notice and comment process is tailor-made to ensure that the most extreme, unrepresentative views are the only ones that register. The APA framers did not, however, make a mistake in adopting notice and comment. It was the best conceivable approach at the time. And even now, in the vast majority of rules, it will represent the optimal approach in light of limited resources that can be dedicated to the problem. But for certain rules, it may make sense to supplement notice and comment. Agencies already have a wide array of supplementary outreach tools at their disposal. These include advance notices of proposed rulemaking, federal advisory committees, stakeholder workshops, direct contact with affected groups, social media outreach, negotiated rulemaking (often known as “reg neg”), “reg neg lite,” and many other options. International practice also offers useful precedent. The European Commission, for instance, undertakes a process similar to reg neg lite when it is considering a new piece of legislation: it invites the key stakeholders into the room, promotes a conversation, and then takes this input into account when drafting the law. China has, in certain cases, convened a citizens’ council to hear input from affected citizens when proposing new regulations. Most of these options will be inappropriate to use in most rulemaking. In deciding what supplemental outreach, if any, it should undertake, the agency must be attentive to what it is attempting to accomplish with the rule and which “public” it seeks to engage. If the rule is highly technical, undertaking expanded outreach to the general public is likely to be superfluous or worse, counterproductive, especially if it creates unrealistic expectations on the part of the public participants. Simple notice and comment might be ideal for these types of rules. In other cases, the agency may want to expand its outreach to technical experts. For instance, if there is a debate among experts, the agency may wish to assemble an advisory committee. At the very least, it might consider reaching out to leading experts to obtain informal input prior to crafting a rule. New technologies such as video conferencing platforms make this sort of outreach far easier and cheaper than it was in the past. If, by contrast, a proposed rule is likely to garner widespread public interest, the agency may consider undertaking some form of outreach that will provide an accurate picture of public opinion. To do this, the agency must be creative and careful. Tweeting about its proposed policy and seeing how the Twitterverse reacts, for example, is likely to be as unenlightening as counting comments. A more productive approach might involve a crowdsourcing program such as IdeaScale, which allows users to engage with each other in online deliberation and provides a means for users to prioritize different options that emerge. Convening a citizen advisory group, as I have proposed elsewhere, would be more useful still, as it would give the agency a sense of what well-informed citizens think. Any advisory group would be subject to the Federal Advisory Committee Act (FACA) and create costs for the agency, but videoconferencing software promises to decrease these costs. Alternatively, the agency might use a form of reg neg lite in which it identifies the segments of the public most likely to be affected and then obtains their informal input, which avoids triggering FACA. By pursuing these forms of targeted supplemental outreach, the agency would garner more useful feedback and alleviate some of the pressure on the notice and comment process. Because commenting is the primary mechanism for influencing agencies during the rulemaking process, participants have an incentive to maximize their influence, which has resulted in a system that is optimal for neither stakeholders nor agencies. Stakeholders are frustrated by their lack of influence in what they see as a democratic process. Agencies are frustrated by the high volume of input they receive that often offers little value in a process they see as essentially technocratic. By pursuing reforms along the lines of those outlined above, agencies may be able to obtain more useful feedback from the public while simultaneously ensuring that individual members of the public have a meaningful opportunity to participate and be heard. And ideally, these reforms will also help the agency reduce the number of comments filed merely to attempt to register a vote

Managing Mass Comment “Supply” by Reducing “Demand”

When the U.S. Congress enacted the Administrative Procedure Act (APA) in 1946 one of its most innovative aspects was the notice and comment process. Informal rulemaking itself was a novel approach to policymaking at the time, as many agencies previously had produced policy iteratively through decisions issued in individual cases. And the idea of allowing interested stakeholders to offer input to the agency that it was legally obligated to consider was perhaps the most unique feature of this new approach. But the framers of the APA do not appear to have given extensive thought to the precise purposes the comment process would serve. On the one hand, based on a review of the legislative history, it appears that the drafters intended the comment process to provide useful technical input to the agency. On the other hand, the drafters may have also intended it to provide a sort of democratic legitimacy by allowing the public to weigh in on an agency’s proposed actions. After all, the New Deal vastly expanded the federal regulatory state and vested extraordinary lawmaking powers in unelected agency officials, so notice and comment might have been one possible corrective that restored at least some of the policymaking power to the people. But the APA is ultimately unclear on what role, if any, public opinion is to play in the rulemaking process. This fundamental tension between the technical and democratic aspects of rulemaking has remained at the heart of the notice and comment process throughout its history. Are public comments intended to lead to more technically sophisticated rules, to give the general public an opportunity to influence the agency’s decision, or both? This tension lay dormant for many decades because notice and comment was, and largely remains, an esoteric exercise that is known mainly to a handful of Washington insiders. Virtually all of the comments came from law firms, trade groups, corporations, and NGOs, especially environmental organizations. As a result, the technical versus democratic distinction was largely an academic one, as the only comments that really mattered were those that offered useful information for the agency to consider. In recent years, however, this dynamic has begun to shift. As a result of technological developments, the notice and comment process has become better known, and e-rulemaking has made filing a comment easier. Of course, most rules still draw very limited participation. But a handful of high-profile rules, most notably the recent series of net neutrality Federal Communications Commission (FCC) rules, have drawn a massive public response involving millions of comments. In examining these high-profile rules, a clear split between agencies’ and the general public’s perspectives on the notice and comment process is apparent. In a recent report for the Administrative Conference of the United States (ACUS), for which I served as a coauthor, interviews with agency officials made it unmistakably clear that agencies view the comment process exclusively or almost exclusively through a technical lens. Our interviewees unanimously said that notice and comment is not a vote and that, to be useful, comments should contain actionable information and not mere expressions of opinion. If one considers the public perception surrounding the net neutrality rulemakings, by contrast, it is clear that the general public reaches the opposite conclusion. So where does this leave the notice and comment process? Will one perspective or the other win out? Or will government agencies just continue to muddle through, with all sides increasingly dissatisfied? If agency policymakers take a step back, they may come to see this challenge as an opportunity to use technological developments to their advantage. On the technical front, notice and comment represents a legalized version of a suggestion box, which is often the ideal mechanism for gathering dispersed information. On the policy front, it is hard to imagine a worse approach to ascertaining public opinion. No public relations firm, for instance, would design an opinion poll for which most of the intended recipients do not know it exists and participation is entirely on an opt-in basis. At least for purposes of determining public opinion, the notice and comment process is tailor-made to ensure that the most extreme, unrepresentative views are the only ones that register. The APA framers did not, however, make a mistake in adopting notice and comment. It was the best conceivable approach at the time. And even now, in the vast majority of rules, it will represent the optimal approach in light of limited resources that can be dedicated to the problem. But for certain rules, it may make sense to supplement notice and comment. Agencies already have a wide array of supplementary outreach tools at their disposal. These include advance notices of proposed rulemaking, federal advisory committees, stakeholder workshops, direct contact with affected groups, social media outreach, negotiated rulemaking (often known as “reg neg”), “reg neg lite,” and many other options. International practice also offers useful precedent. The European Commission, for instance, undertakes a process similar to reg neg lite when it is considering a new piece of legislation: it invites the key stakeholders into the room, promotes a conversation, and then takes this input into account when drafting the law. China has, in certain cases, convened a citizens’ council to hear input from affected citizens when proposing new regulations. Most of these options will be inappropriate to use in most rulemaking. In deciding what supplemental outreach, if any, it should undertake, the agency must be attentive to what it is attempting to accomplish with the rule and which “public” it seeks to engage. If the rule is highly technical, undertaking expanded outreach to the general public is likely to be superfluous or worse, counterproductive, especially if it creates unrealistic expectations on the part of the public participants. Simple notice and comment might be ideal for these types of rules. In other cases, the agency may want to expand its outreach to technical experts. For instance, if there is a debate among experts, the agency may wish to assemble an advisory committee. At the very least, it might consider reaching out to leading experts to obtain informal input prior to crafting a rule. New technologies such as video conferencing platforms make this sort of outreach far easier and cheaper than it was in the past. If, by contrast, a proposed rule is likely to garner widespread public interest, the agency may consider undertaking some form of outreach that will provide an accurate picture of public opinion. To do this, the agency must be creative and careful. Tweeting about its proposed policy and seeing how the Twitterverse reacts, for example, is likely to be as unenlightening as counting comments. A more productive approach might involve a crowdsourcing program such as IdeaScale, which allows users to engage with each other in online deliberation and provides a means for users to prioritize different options that emerge. Convening a citizen advisory group, as I have proposed elsewhere, would be more useful still, as it would give the agency a sense of what well-informed citizens think. Any advisory group would be subject to the Federal Advisory Committee Act (FACA) and create costs for the agency, but videoconferencing software promises to decrease these costs. Alternatively, the agency might use a form of reg neg lite in which it identifies the segments of the public most likely to be affected and then obtains their informal input, which avoids triggering FACA. By pursuing these forms of targeted supplemental outreach, the agency would garner more useful feedback and alleviate some of the pressure on the notice and comment process. Because commenting is the primary mechanism for influencing agencies during the rulemaking process, participants have an incentive to maximize their influence, which has resulted in a system that is optimal for neither stakeholders nor agencies. Stakeholders are frustrated by their lack of influence in what they see as a democratic process. Agencies are frustrated by the high volume of input they receive that often offers little value in a process they see as essentially technocratic. By pursuing reforms along the lines of those outlined above, agencies may be able to obtain more useful feedback from the public while simultaneously ensuring that individual members of the public have a meaningful opportunity to participate and be heard. And ideally, these reforms will also help the agency reduce the number of comments filed merely to attempt to register a vote

Uber and the Future of Regulation

In the late 1930s, New York Mayor Fiorello LaGuardia signed a law requiring all city taxicab operators to hold an officially-issued medallion. In recent years, the efforts of New York and other major cities to continue regulating the taxicab market have become highly controversial. Uber, Lyft, and other ridesharing companies have managed to work around this outdated system, arousing the ire of cab drivers. At first glance, the old medallion laws appear to be nothing more than a naked restraint of commerce, privileging incumbent firms at the expense of innovative new entrants. And indeed, artificially limiting supply and thereby inflating prices almost certainly was and continues to be one of the primary motivations for erecting and maintaining this system. Nevertheless, defenders of the status quo have also pointed to a more benign motivation for regulation: prospective riders may not be able to judge the quality or safety of potential drivers, a problem that standardization helps remedy. To put it in economic terms, this is an instance of information asymmetry, one of the classic market failures calling for government intervention. Had market forces not evolved since the late 1930s, this argument would likely carry some weight. Yet, as anyone who has ever used Uber or Lyft is aware, the sophisticated user-feedback mechanisms these apps offer have substantially mitigated, if not completely eliminated, the information asymmetry problem. One seldom encounters disgruntled Uber riders wishing they had taken a cab instead. This simple example illustrates a fairly profound problem in regulatory policymaking: market failures are often temporary, and regulations that once made eminent sense can become anachronistic as technology evolves. The traditional assumption has been that more regulation is needed as the economy grows more complex. Although that is likely true in certain contexts—for example, the U.S. Securities and Exchange Commission must update its regulations as complex new financial instruments emerge—the opposite trend also exists, because shifting market forces have the potential to remedy erstwhile market failures. In this sense, it is worthwhile to sort regulatory interventions into two major categories. Some permanent interventions may be necessary to remedy inherent market flaws and channel economic activity in a productive direction. For instance, few would question the constant need for some system of governmentally-created intellectual property rights (even though, of course, reasonable minds might differ as to how long and protective those rights need to be to support innovation). Other regulatory interventions, however, might be more temporary, perhaps even analogized to a catalyst in a chemical reaction which is needed in order to kick off a process that leads to a desired outcome but becomes unnecessary or even detrimental once the intended reaction has occurred. Regulations of this latter type can become outmoded and counterproductive as market conditions or technologies evolve. The challenge, of course, lies in distinguishing the two types of interventions. A robust benefit-cost analysis will help regulators determine whether they should act now, but it tells them little to nothing about what to expect in the future. The obvious solution is to implement some system of retrospective review: regulatory agencies should periodically revisit their existing rules to determine if they still make sense, and Congress should do the same for its statutes. Sadly, this is much easier said than done. Regulators have very little incentive to upset their own handiwork, and they may not have a good sense of how their regulations interact with those of other agencies to impose a significant cumulative burden. Congress suffers from this even more, since it does not typically prepare a benefit-cost analysis when adopting new laws, to say nothing of retrospectively reassessing the economic effects of existing statutes. Regulated entities also may have weak incentives to push for any change in the status quo, as they often have incurred the large initial costs to come into compliance with regulations. These existing businesses may dread the prospect of new market entrants not having to make those same investments. How, then, might one design a regulatory regime to ensure that this critical function takes place? One possibility is shifting the underlying incentives to force retrospective review. Two recent executive orders signed by President Donald Trump, Executive Orders 13,771 and 13,777, do just that by effectively imposing a limit on both the numbers and costs of new regulations. These initiatives apply only to regulations and therefore are not responsive to similar problems created by outdated statutes. Also, on the regulatory front, there is always the risk that the wrong regulations will be eliminated. At the very least, the regulatory task forces created by Executive Order 13,777 should seek input from a wide array of stakeholders in determining which rules to revise or eliminate. In so doing, the task forces should especially focus on obtaining input from consumer groups and small businesses, whose input might otherwise be crowded out by beneficiaries of the status quo. Another potential approach is attempting to promote a more experimental model of regulatory policymaking. The gold standard would involve erecting the regulatory equivalent of clinical drug trials, assigning different entities to regulatory “treatments” and assessing the results. As Professor Zachary Gubler has noted in a series of recent articles, this approach is highly attractive in theory, but faces a number of practical roadblocks. Most importantly, it is unclear how a reviewing court would respond to a regulatory model that by its very design suggests that the agency lacks sufficient information to select an optimal intervention. Businesses may also prefer the certainty associated with an agency settling on a definitive position, even if the resulting regulatory burden is somewhat heavier than what would eventually emerge from a regulatory experiment. Agencies can also look for other opportunities to promote regulatory learning. The Administrative Conference of the United States recently encouraged agencies to do precisely that, issuing a recommendation on “Learning from Regulatory Experience.” Among other things, this recommendation encourages agencies to engage in “quasi-experiments,” carefully comparing parties subject to different regulatory treatments to attempt to isolate the effects of regulation. This might entail comparing firms that are slightly above and slightly below a regulatory threshold or analyzing the comparative performance of businesses that have obtained regulatory waivers and those that have not. Although less controversial than a randomized control trial, these approaches might also raise equity concerns, especially if the agency applies differing regulatory treatments merely to compare outcomes. And, as with retrospective review more generally, agencies may lack the incentives and institutional capacities to seek out and act upon such learning. A final approach may entail handing back more regulatory power to the states and localities, creating a natural experiment of the type described by Justice Louis Brandeis in New State Ice Co. v. Liebmann. Interestingly, this is precisely what is happening in the ridesharing context. For instance, Uber and Lyft both temporarily pulled out of the Austin, Texas market in response to efforts of city officials to impose regulations similar to those applicable to cab drivers. When states and localities function as “laboratories of democracy,” both businesses and citizens can “vote with their feet” if they object to the particular regulatory package (or lack thereof) selected by their state and local leaders. Of course, reliance on state and local regulation triggers the classic objection to any decentralized system of policymaking, namely, that it sets off a regulatory “race to the bottom.” Although this is certainly a legitimate concern, a “race to the bottom” may be a good thing if it involves the erosion of an outmoded, inefficient regulatory regime, as is currently playing out in the taxicab market. And just as businesses can move to a state or city that imposes weaker regulatory restrictions, individual citizens can move away from a jurisdiction that does not provide public safety protections they deem adequate. In short, although the costs associated with enhanced federalism in the regulatory space are real, there are also enormous benefits that should not be overlooked. Ultimately, there is no easy way to design a regulatory system that can respond to evolving market forces. Yet any effort to do so is likely to yield enormous dividends, given the current political impasse associated with regulatory policymaking. At present, conservatives (understandably) oppose any new regulatory intervention for fear it will become irreversible. Progressives (also understandably) oppose any deregulatory effort for fear that many good regulations will get swept up with the bad ones. In theory, both sides should support a regulatory system designed to correct legitimate market failures and to readjust the level of intervention as the market evolves. Actually achieving that result, however, is likely to prove enormously complicated and will require policymakers to approach their task with a fresh perspective. Each of the options considered above holds some promise and faces certain drawbacks. Regulators must be willing to consider these and other innovative solutions if they are to construct a more dynamic regulatory system