Right-Sizing Regulation

There’s a good article by academics Jerry Ellig and Rosemary Fike on regulatory reform at RealClearPolicy:

Regulatory rollbacks are all the rage in Washington, from President Trump’s executive orders on regulatory reform to congressional resolutions disapproving major regulations issued by the Obama administration. But whether you think we have too much or too little regulation, reasonable people ought to be able to agree that we should have the right kind.

Unfortunately, it’s not at all clear that we do. One of us (Ellig) authored a study in 2016 revealing that less than half of the major non-budget executive branch regulations proposed between 2008 and 2013 were accompanied by evidence showing that the regulations addressed significant problems. And for about one-third of those regulations, regulators failed to consider the benefits or cost-effectiveness of alternative approaches.

I think that the policy that President Trump has announced, removing two regulations for every one introduced, while probably being well-intentioned is a brute force solution to a genuine problem. I prefer Canada’s rule in the Red Tape Reduction Act that requires that for every new regulation introduced by the Canadian federal government, one of equal burden must be removed from the books. The focus there is right. It’s on the burden imposed by regulation rather than on their number.

Not that number isn’t a problem. The present Code of Federal Regulations weighs in at more than 180,000 pages, seven times as long as it was in 1960.

I believe that the underlying problem is that there are just too many career bureaucrats in Washington who see their job in terms of producing new regulations. That’s completely consistent with Jerry Pournelle’s Iron Law of Bureaucracy:

Pournelle’s Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people”:

First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.

Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers union officials, much of the NASA headquarters staff, etc.

The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.

In addition regulatory capture practically guarantees that some of level of federal regulation is less directed at providing for the health, safety, or welfare of the American people and much more targeted at helping certain preferred companies or individuals.

Note that I’m not claiming that regulation is unnecessary or that in some cases it doesn’t make us better off. I’m merely pointing out what is obvious to just about anyone who deals much with the federal goverment: a lot of what the federal government requires can’t stand up to a cost-benefit analysis.