Three Myths about Federal Regulation

37 Pages Posted: 26 Oct 2021 Last revised: 9 Mar 2022

See all articles by Patrick A. McLaughlin

Patrick A. McLaughlin

Mercatus Center at George Mason University

Casey B. Mulligan

University of Chicago; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: September 30, 2021

Abstract

Despite evidence to the contrary, three common myths persist about federal regulations. The first myth is that most regulations concern the environment, but in fact only a small minority of regulations are environmental. The second myth is that most regulations contain quantitative estimates of costs or benefits, thereby offering reasonable and evidence-based justifications. However, these quantitative estimates appear rarely in published rules, contradicting the impression given by executive orders and Office of Management and Budget guidance, which require cost-benefit analysis (CBA) and clearly articulate sound economic principles for conducting CBA. Environmental rules have relatively higher-quality CBAs, at least by the low standards of other federal rules. The third myth, which is particularly relevant to the historical regulations promulgated during the COVID-19 pandemic, is the misperception that regulatory costs are primarily clerical, rather than opportunity or resource costs. If technocrats have triumphed in the regulatory arena, their victory has not been earned by the merits of their analysis.

JEL Classification: K23,L51,Q58

Suggested Citation

McLaughlin, Patrick A. and Mulligan, Casey B., Three Myths about Federal Regulation (September 30, 2021). Law & Economics Center at George Mason University Scalia Law School Research Paper Series No. 22-001, Available at SSRN: https://ssrn.com/abstract=3944049 or http://dx.doi.org/10.2139/ssrn.3944049

Patrick A. McLaughlin

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Casey B. Mulligan (Contact Author)

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