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Regulations need retrospective review

There’s an old adage that says, “You can’t know where you’re going unless you know where you’ve been.” Everyone from teachers to businesses routinely evaluate the results of their efforts to see if they’re paying off, so it seems natural that we would expect the federal government to do the same for its regulations. However, that’s rarely the case: While recent efforts have drawn more attention to “retrospective review” of rules, new research shows agencies still have a long way to go.

Every year, federal agencies issue thousands of new regulations that they estimate will result in billions of dollars in both benefits and costs for Americans. Despite this proliferation of regulatory activity, regulators seldom look back at existing rules to see whether they are, in fact, working as intended. That may be because, as our latest research finds, agencies don’t write their rules to enable measurement of results, and public policy and accountability suffer as a result.

{mosads}Because federal regulation is intended to accomplish such big goals—sometimes at a very high cost—it’s important to review the rules on the books to see if they achieve the objectives that agencies claim. But it’s hard to review the effects of regulation if agencies don’t write their rules to facilitate retrospective review. Recognizing this need, Sens. Heidi Heitkamp (D-N.D.) and James Lankford (R-Okla.) have proposed the Smarter Regs Act (S. 1817), which would require agencies to draft their rules in a way to enable better review after the fact.

A rule that is designed to be measured after implementation identifies the public problem that it is supposed to address, finds ways to measure progress toward that goal, and gathers the right data to measure success. Unfortunately, our latest research finds that agencies have a long way to go before this goal is reality.

Our new paper examines 22 high priority rules proposed by federal agencies in 2014, and finds that only 36% of them included any quantifiable metrics to measure whether the rule was actually working. Among independent agencies, such as the Consumer Financial Protection Bureau and the National Labor Relations Board, the number was 0%.

According to our research, agencies also struggled to identify data that could be used to measure whether the goals of their rules were being accomplished, with more than three quarters of assessed rules falling short of this criterion. Even worse, none of the rules were written to establish causal linkages between the standards being proposed and the outcomes of interest.

This is no surprise: establishing linkages between regulations and their intended outcomes is a lofty goal. Yet, agencies often predict that lofty health and safety outcomes will result from their standards. Given the enormous benefits—and, sometimes, enormous costs—that are on the line, agencies should prioritize establishing strong linkages between the rules they issue and the benefits that are meant to result. Without learning from past experiences, agencies are limiting their ability to improve future regulations designed to benefit the American public.

Retrospective review is an important piece of good regulatory policy. That’s why President Obama has issued a series of executive orders encouraging federal regulatory agencies to review existing regulations and to “modify, streamline, expand, or repeal them in accordance with what has been learned.” The government has also issued guidelines recommending that agencies write their rules in advance so that they’re easier to measure down the road.

It’s hard to measure whether a government regulation has had an effect: that’s why federal agencies should write their rules to better facilitate retrospective review. Ex post measurement encourages transparency, accountability, and good public policy, all admirable goals. Unfortunately, agencies have a long way to go before this goal becomes reality. Without evaluating where we’ve been, how can we know where our regulatory policy is going?

Miller is a senior policy analyst at the George Washington University Regulatory Studies Center, and is editor of the Regulation Digest.

Tags Heidi Heitkamp

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