Bespoke Regulatory Review

Abstract

An agency that fails to adequately consider the costs and benefits of its proposed regulatory changes increasingly places its rules at risk upon judicial review.

Over the last couple of decades, courts have begun to expect agencies to use regulatory analysis techniques like cost-benefit analysis to justify their regulatory choices. This poses acute risks for the independent regulatory agencies, whose draft regulations are not reviewed by the Office of Information and Regulatory Affairs (OIRA), the White House experts on cost-benefit analysis. Independent regulatory agencies have not fully opted in to OIRA’s regulatory review, likely because they expect that OIRA review portends the end of their ability to make independent decisions.

But what if it didn’t? This article draws upon the author's 10+ years at OIRA to offer a new way forward: bespoke regulatory review. That is, bilateral negotiations resulting in agreements between independent regulatory agencies and OIRA, custom fit to each agency’s unique features.

Keywords: regulation, regulatory, independent agencies, independent regulatory agency, EO 12866, OIRA, cost-benefit analysis, benefit-cost analysis, regulatory impact analysis

JEL Classification: K2