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Friday, August 9, 2013
Ten Principles for Better Regulation
By NCPA @ 2:59 PM :: 4831 Views :: National News, Hawaii State Government

Ten Regulatory Principles the United States Should Follow

NCPA August 9, 2013

For nearly four decades, presidential administrations have required executive branch regulatory agencies to identify the problem they are trying to address and assess its significance, examine a wide range of alternative solutions, estimate the costs and benefits of the alternatives, and regulate only when the benefits justify the costs. In 1993, President Clinton's Executive Order 12866 laid out the fundamental requirements that have governed regulatory analysis and review ever since, says Jerry Ellig, a senior research fellow at the Mercatus Center at George Mason University.

  • Our regulatory system must protect public health, welfare, safety and our environment while promoting economic growth, innovation, competitiveness and job creation.
  • It must be based on the best available science. It must allow for public participation and an open exchange of ideas.
  • It must promote predictability and reduce uncertainty. It must identify and use the best, most innovative and least burdensome tools for achieving regulatory ends.
  • It must take into account benefits and costs, both quantitative and qualitative.

Regulations, regulatory impact analyses and notices of proposed rulemaking that reflect the following 10 principles have the best chance of accomplishing these goals.

  1. Since regulations impose constraints that govern people's behavior, a sensible regulation should solve a real, widespread problem that could reasonably be addressed by altering constraints. It should not just respond to anecdotes of bad behavior by bad actors.
  2. A regulation should be accompanied by proof that it is likely to make life better for citizens in a significant and tangible way.
  3. Regulators should define how they will know the problem is "solved" and no additional regulation is necessary.
  4. Regulators should consider alternatives to regulation and alternative forms of regulation.
  5. The regulatory alternative selected should provide the "biggest bang for the buck."
  6. Regulation should respect consumers' freedom of choice.
  7. Regulation should be technologically neutral.
  8. Regulation should be competitively neutral.
  9. Regulation should be based on the best available evidence, not merely on assumptions, good intentions or wishes.
  10. Regulation should acknowledge uncertainty.

Source: Jerry Ellig, "Ten Principles for Better Regulation," Mercatus Center, July 23, 2013.


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