Pigou's Plumber (or Regulation as a Discovery Process)

41 Pages Posted: 15 Mar 2024

See all articles by Justin (Gus) Hurwitz

Justin (Gus) Hurwitz

International Center for Law & Economics (ICLE); University of Pennsylvania Law School

Geoffrey A. Manne

International Center for Law & Economics (ICLE)

Date Written: February 8, 2024

Abstract

Standard accounts of why we have administrative agencies do little to account for those agencies’ ability to generate new information that can inform the regulatory process. Even expertise-based understandings of the administrative state limit the role of agencies to gathering information; and prevailing understandings of the administrative state view agencies as engaged in a policy-development exercise checked by theories of political accountability. This is unfortunate, because, for the same reasons that Congress turns to agencies to regulate in complex policy domains, agencies are typically in the best position to generate and make productive use of information that can inform the regulatory process and help Congress to accomplish its intended legislative goals.

This article offers a new account of how we can—and should—think about agencies’ use of information in the regulatory process: regulation as a discovery process. Drawing from economic understandings of how information is produced and used in both regulation and markets, it argues that using the regulatory process to generate information and ensuring that that information is both captured and productively used to improve regulations should be a priority for administrative law. In so doing, it contributes to a growing literature that argues for more experimentation in regulation and offers an account of the administrative state that is divergent from the interest group and presidential administrative models. Specific applications of these ideas are considered. These include how viewing regulation as a discovery process can resolve tensions in the Major Questions Doctrine and the use of an Executive Order to treat regulations as data-generating natural experiments.

Suggested Citation

Hurwitz, Justin (Gus) and Manne, Geoffrey, Pigou's Plumber (or Regulation as a Discovery Process) (February 8, 2024). Available at SSRN: https://ssrn.com/abstract=4721112 or http://dx.doi.org/10.2139/ssrn.4721112

Justin (Gus) Hurwitz (Contact Author)

International Center for Law & Economics (ICLE) ( email )

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University of Pennsylvania Law School ( email )

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Geoffrey Manne

International Center for Law & Economics (ICLE) ( email )

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