Why and How Independent Agencies Should Conduct Regulatory Impact Analysis

Abstract

Independent regulatory agencies face increasing pressure to conduct high-quality economic analysis of regulations, similar to the regulatory impact analysis conducted by executive branch agencies. Such analysis could be required by evolving judicial doctrines, regulatory reform statutes, or executive order. This article explains how regulatory impact analysis can contribute to smarter regulation, documents the current low quality of such analysis at many independent regulatory agencies, and offers a blueprint that independent agencies can use to build their capacity to conduct objective, high-quality analysis.

Keywords: administrative procedure, independent agencies, regulation, regulatory reform, regulatory process, benefit-cost analysis, cost-benefit, regulatory impact analysis, regulatory review

JEL Classification: D61, D73, D78, H11, H83, K23, L51, P16