I’m taking a class on regulation this fall. I’ve heard from some awesome economists who are trying to reform the regulatory system, from both the inside-out and outside-in. Specifically, they want to beef up the “regulatory impact analyses” (RIAs) agencies are required to submit alongside all proposed rules with an anticipated impact of over $100 million. Think of them as cost-benefit analyses of the proposed regulation.
Believe it or not, RIAs are relatively new—regulatory agencies operated for decades without any consistently robust assessment of their proposed rules’ economic costs and benefits. Only in recent years has much attention been given to RIAs. The very nature of most regulation makes RIAs pretty damning for their accompanying rules. By my read, economists constructing RIAs are often hard-pressed to justify many of the rules that cross their desks. The RIAs are therefore lacking in some big ways. But to their credit, RIA authors at least give the public something to look at when evaluating proposed regulations. This can only help to deter bad rules.
Here’s a “report card” from the Mercatus Center that grades the quality of these analyses. Worth a look.