The Grand Experiment in Regulatory Reporting

Abstract

This paper evaluates a grand regulatory experiment, the first of its kind in the world, aimed at providing an objective and comprehensive characterization of the costs and benefits of U.S. federal regulation as well as identifying opportunities for reform. This experiment, if successful, could have important implications for reviewing the impact of regulation across the world. Five government reports on the costs and benefits of regulation are now complete. We offer a critical evaluation of these reports, using an approach that scores the reports on various dimensions. By and large, the reports represent a significant step forward in providing insights into the regulatory process and in providing information on the costs and benefits of regulation. But they also illustrate the shortcomings of having a government agency do the analysis. We recommend that the Office of Management and Budget require agencies to issue a scorecard evaluating each agency regulation; that OMB summarize the strengths and weaknesses of regulations using this scorecard; that OMB include not only executive agencies, but also independent agencies in its analysis; and that Congress create an agency or office outside of the executive branch to perform a regulatory evaluation function similar to that of OMB. While we are highly critical of some aspects of these important reports, we are guardedly optimistic about their potential to improve regulation and the regulatory process.