The Consequences of Regulatory Accumulation and a Proposed Solution

Abstract

The American regulatory system has no working, systematic process for reviewing regulations for obsolescence or poor performance. Over time, this has facilitated the accumulation a vast stock of regulations. Regulatory accumulation can negatively affect GDP growth, labor productivity, innovation, and safety — perhaps explaining why every president since Jimmy Carter has recognized it as a problem. We examine previous, presidentially led efforts to initiate a review of existing regulations in the United States, and show that these efforts have not materially altered the stock of regulations. In contrast, we examine other, successful government reform efforts in order to identify their characteristics. After outlining the obstacles to regulatory cleanup that previous efforts in the United States failed to address, we suggest a process that could be adopted in order to eliminate or modify obsolete or otherwise undesirable regulations. Finally, we evaluate our proposal alongside other recent proposals with regard to how well they overcome the previously identified obstacles to regulatory review and cleanup.

Keywords: regulation, regulatory accumulation, regulatory cleanup, retrospective review, retrospective analysis, consequences of regulation, unintended consequences, economic growth, regulatory improvement commission, regulatory review commission, BRAC for regulations, regulation and safety, nonfunctional

JEL Classification: H1, H23, K23, L51, J810