Better Regulatory Review and Public Participation.

• Author: Bird, Ronald
• Position: SPECIAL SECTION

The Office of Information and Regulatory Affairs (OIRA) recently published for public comment a draft proposal for revision of Circular A-4, which provides agencies with guidance regarding how to conduct regulatory analyses required by statutes and executive orders.

The revision is well-intentioned in its attempts to provide agencies' access to important research advances in economic cost-benefit analysis and public policy decision-making tools over the past 20 years. However, it gives inadequate attention to public input as vital to the rulemaking process, and implementation of OIRA's A-4 revisions by agencies subject to politically determined rulemaking schedules may lead to obfuscation, reduced transparency, and discouragement of public input.

An improved A-4 would do the following:

* Encourage agencies to conduct systematic evaluations of costs, benefits, and compliance of regulations already in place before undertaking rulemakings to revise them and ensure that the interested public has input into the process.

* Encourage agencies to expand use of advance notices of proposed rulemakings to promote public input for selection of regulatory alternatives to be examined and for development of data sources and analysis methods by which the costs, benefits, and other economic and societal effects of regulatory alternatives will be compared before an agency identifies its preferred approach.

* Ensure that agencies provide ample time for public comment at each stage of the process.

Each of these has already been practiced by some agencies in some contexts, and no new authority would be needed to encourage or require agencies to adopt these practices, especially for economically significant rulemakings. Together, these practices could do more to improve the quality of public participation and agencies' decisions than any of the items proposed for the revision of A-4.

Evaluation before regulation/ Current A-4 guidance and the proposed revision implicitly assume that an agency's regulatory action is in response to a newly discovered market failure. In reality, most rulemakings today are revisions to existing regulations. While the need for any regulation of markets requires grounding in evidence of market failure, revisions to existing regulations should also consider the question of regulatory failure. Is revision of the regulation needed because the underlying market failure or other salient conditions have changed, because flaws in the design...