Arnold Kling links to an article on regulation by Bruce Yandle.
Yandle’s general concern is well-founded – it is a problem that the unaccountable regulatory agencies are turning out massive quantities of regulations.
Yandle has no idea how to solve this problem.
Solutions from the few people that are trying to address the problem of unaccountable regulatory agencies fall into two categories.
1) Kling suggests "radical Federalism or competitive government." The good news is that this proposal would actually solve the problem. The bad news is that it’s impossible. The problem that we’re trying to solve is that unaccountable regulatory agencies have taken control of the government of the US. Achieving Kling’s proposal would require these disparate agencies to band together to radically reduce or destroy their own power and existence. Nothing could be more unlikely (they’ll never band together, for one).
2) Yandle’s solution, which is basically for Congress to reassert its own power over these executive agencies, suffers from the inverse of the problem with Kling’s solution. It is theoretically possible for Congress to reassert control over the legislative function, however the result would not be better government. You may not like unaccountable regulators making decisions, but you really wouldn’t like Congress making decisions.
Part of the problem is that people don’t understand regulators. If you talk to a reasonably successful one, you’ll be surprised about how much they know about the industry they regulate (it’s not clear to me that the average regulator is less knowledgeable about the industry he regulates than the average private sector worker in that industry). You’ll also be surprised about how aware he is about the problems of over-regulation. Regulators don’t sit in rooms randomly thinking of ways to undermine competitiveness in the US economy. Yandle seems to oscillate between assuming that regulators are promulgating random regulations on subjects which they don’t really understand to assuming that they’re all-knowing.
For example, his suggestions to fix the problem of too much regulation include:
- Agencies should be required to conduct potential cartel analysis for every major industry rule. They should also identify industry winners and losers under proposed rules, account for the gains and losses that may result in a rule-induced regulatory cartel, and estimate deadweight losses imposed on consumers.
- The Antitrust Division of the Department of Justice and the Federal Trade Commission should be required to review major rules in cooperation with the White House’s Office of Information and Regulatory Affairs, and should intervene as appropriate in regulatory proceedings that may have inefficient outcomes.
- In conjunction with the required retrospective assessments and industry reviews, Congress should hold annual hearings to review those reports, with an eye toward improving the competitiveness of the U.S. economy and identifying the economic gains obtained through regulatory review by OIRA
I think these reforms would end up giving regulators more power. They assume that regulators are omniscient. Why give them an opportunity to increase their power by performing these rampantly-speculative analyses? What do Justice and the FTC know about inefficiencies in regulations in FAA regs, for example? What does Congress know?
If you want to solve the problem, you’ve got to figure out how to get someone to be held responsible (Justice and FTC and Congress don’t count). It has to be a person and this person has to get in trouble if regulations fail. Real serious trouble.