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Regulatory Improvement Commission: A Politically-Viable Approach to U.S. Regulatory Reform

  • May 9, 2013
  • Michael Mandel
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The natural accumulation of federal regulations over time imposes an unintended but significant cost to businesses and to economic growth. However, no effective process currently exists for retrospectively improving or removing regulations. This paper first puts forward three explanations for how regulatory accumulation itself imposes an economic burden, and how this burden has historically been addressed with little result. We then propose the creation of an independent Regulatory Improvement Commission (RIC) to reduce regulatory accumulation. We conclude by explaining why the RIC is the most effective and politically-viable approach.

A well-functioning regulatory system is an essential part of a high-growth economy. Regulations drive business decisions, such as where to locate production and where to invest in the local workforce. They provide guidelines that keep the air clean, protect consumers, and ensure worker safety. Smart regulations enable the capital markets to function properly, financing the trades, contracts, and insurance that allows businesses to survive and grow.

A successful high-growth strategy requires a regulatory system that balances innovation and growth with consumer well-being. A regulatory structure that is too prescriptive could restrict investment in job-creating innovation if companies are overwhelmed by costly rules, hampering potential economic growth. On the other hand, a regulatory structure that is too relaxed may threaten the environment or unnecessarily place consumers at risk.

A regulatory system that achieves this balance must include a mechanism for addressing regulatory accumulation—what we define as the natural buildup of regulations over time.

Regulatory accumulation is both a process and an outcome of our reactive regulatory structure. Over time regulations naturally accumulate and layer on top of existing rules, resulting in a maze of duplicative and outdated rules companies must comply with.

However, our current regulatory system has no effective process for addressing regulatory accumulation. Every president since Jimmy Carter has mandated self-evaluation by regulatory agencies, but for various reasons this approach has been met with limited success.

In this paper we propose the creation of an independent Regulatory Improvement Commission (RIC), to be authorized by Congress on an ongoing basis. The RIC will review regulations as submitted by the public and present a recommendation to Congress for an up or down vote. It will have a simple, streamlined process and be completely transparent. Most importantly, it will review regulations en masse in a way that is politically viable.

Download “205.2013-Mandel-Carew_Regulatory-Improvement-Commission_A-Politically-Viable-Approach-to-US-Regulatory-Reform”

Photo credit: Shutterstock

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