Regulatory Exit

41 Pages Posted: 20 Aug 2014 Last revised: 2 Dec 2015

See all articles by J. B. Ruhl

J. B. Ruhl

Vanderbilt University - Law School

James E. Salzman

University of California, Santa Barbara (UCSB) - Donald Bren School of Environmental Science & Management; University of California, Los Angeles (UCLA) - School of Law

Date Written: September 16, 2014


Exit is a ubiquitous feature of life, whether breaking up in a marriage, dropping a college course, or pulling out of a venture capital investment. In fact, our exit options often determine whether and how we enter in the first place. While legal scholarship is replete with studies of exit strategies for businesses and individuals, the topic of exit has barely been touched in administrative law scholarship. Yet exit plays just as central a role in the regulatory state as elsewhere – welfare support ends; government steps out of rate-setting. In this article, we argue that exit is a fundamental feature of regulatory design and should be explicitly considered at the time of program creation.

Part I starts from first principles and sets out the basic features of regulatory exit. It addresses the design challenges of exit strategies and how to measure success of exit. With these descriptive and normative foundations in place, Part II develops a framework that explains the four basic types of regulatory exit strategies, exploring the political economy that determines each strategy and explaining when policy makers are most likely to adopt them. To demonstrate its usefulness in practice, the framework is applied as a case study in Part III to the emerging challenge of fracking. We conclude by describing a new exit strategy model for regulatory design, a hybrid approach of “Lookback Exit.”

Exit is a vast, central, yet largely unexplored aspect of administrative governance. By providing a fuller account, we demonstrate why exit warrants focused research and theoretical development in its own right, create a framework for the analysis of exit issues, and identify the key questions for future research. Doing so provides important insights not only to understand the practice we see around us today but also for the design of programs to manage emerging issues.

Keywords: exit strategies, fracking, hydraulic fracturing, regulatory design

Suggested Citation

Ruhl, J. B. and Salzman, James E., Regulatory Exit (September 16, 2014). Vanderbilt Law Review, Forthcoming, Duke Law School Public Law & Legal Theory Series, Vanderbilt Public Law Research Paper No. 14-31, Available at SSRN: or

J. B. Ruhl

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States

James E. Salzman (Contact Author)

University of California, Santa Barbara (UCSB) - Donald Bren School of Environmental Science & Management ( email )

4670 Physical Sciences North
Santa Barbara, CA 93106-5131
United States

University of California, Los Angeles (UCLA) - School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

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