Performance Standards vs. Design Standards: Facilitating a Shift toward Best Practices

37 Pages Posted: 16 Jul 2019

See all articles by Laura Montgomery

Laura Montgomery

Catholic University of America (CUA) - Columbus School of Law

Patrick A. McLaughlin

Mercatus Center at George Mason University

Tyler Richards

George Mason University - Mercatus Center

Mark Febrizio

George Washington University - GW Regulatory Studies Center

Date Written: June 26, 2019

Abstract

Performance standards are typically viewed as a preferable regulatory approach to design standards. Presidential administrations and offices have consistently instructed regulatory agencies to favor performance standards when feasible. Nevertheless, research shows that in many instances, agencies opt for design standards even when performance standards would likely lead to better outcomes. Following a discussion of the benefits and drawbacks of performance standards, we lay out some general principles for agencies when considering alternative regulatory approaches. These principles are intended to help agencies determine whether performance standards are preferable to design standards given the particular aspects of any regulatory issue, and to help agencies avoid potential pitfalls when crafting performance standards. We then present two case studies of recent actions by regulatory agencies — the Federal Railroad Administration and the Federal Aviation Administration — that demonstrate how to shift from design standards to performance standards.

Keywords: regulation, regulatory process, administrative procedure, administrative law, regulatory design, performance standards, design standards, regulatory impact analysis, benefit-cost analysis, regulatory reform

JEL Classification: D73, K2

Suggested Citation

Montgomery, Laura and McLaughlin, Patrick A. and Richards, Tyler and Febrizio, Mark, Performance Standards vs. Design Standards: Facilitating a Shift toward Best Practices (June 26, 2019). Mercatus Research Paper . Available at SSRN: https://ssrn.com/abstract=3420320 or http://dx.doi.org/10.2139/ssrn.3420320

Laura Montgomery (Contact Author)

Catholic University of America (CUA) - Columbus School of Law ( email )

3600 John McCormack Rd., NE
Washington, DC 20064
United States

Patrick A. McLaughlin

Mercatus Center at George Mason University ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States
(703) 993-9670 (Phone)

HOME PAGE: http://www.patrickamclaughlin.com

Tyler Richards

George Mason University - Mercatus Center ( email )

Mark Febrizio

George Washington University - GW Regulatory Studies Center ( email )

Washington, DC
United States

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