Just Regulation: Improving Distributional Analysis in Agency Rulemaking
28 Pages Posted: 30 Dec 2022 Last revised: 4 May 2023
Date Written: December 27, 2022
Taking account of the impacts of government action on historically marginalized and overburdened communities is a core policy goal of the Biden-Harris Administration. With respect to regulatory action, the Memorandum on Modernizing Regulatory Review, which President Biden issued on his first day in office, directed the Office of Management and Budget to take steps “to ensure that regulatory initiatives appropriately benefit and do not inappropriately burden disadvantaged, vulnerable, or marginalized communities” While the efforts in this regard have gone beyond those of the Clinton and Obama Administrations, federal regulations still pay limited attention to regulatory consequences on disadvantaged communities.
In this Article, we seek to understand the shortcomings of current agency practice and outline what agencies can do better. To do so, we examine fifteen significant proposed or final agency rules promulgated during the Biden-Harris Administration’s first eighteen months. This empirical analysis reveals four categories of limitations. First, agencies often pursue inconsistent goals across different regulatory initiatives. Second, they do not grapple with the core issue that distributional analysis should raise: the extent to which the better distributional consequences of one alternative should trump the higher net benefits of another alternative. Third, agencies do not apply a consistent approach to defining disadvantaged groups, which makes the analysis inconsistent and unpredictable. Fourth, the distributional analysis relies on a truncated set of costs and benefits, and thus presents an incomplete picture of the consequences of regulation on disadvantaged communities. One of the fifteen analyses, however, suggests an attractive path to fulfilling the promise of distributional analysis, though significant work remains to be done.
Keywords: Regulatory Affairs, Administrative Law, Cost-Benefit Analysis
JEL Classification: I18, K20, K23, K32
Suggested Citation: Suggested Citation