A Closer Look at Changing Arkansas's Regulatory Culture
I recently spoke with Peter Van Doren of the Cato Institute about how cost-benefit analysis of regulation might work. As I mentioned yesterday, gubernatorial candidate Asa Hutchinson has expressed support for reviewing regulations in this manner.
Van Doren told me that the journal he edits, Regulation, has published several articles about cost-benefit analysis at the federal level. Robert Hahn, who was then an economist at the American Enterprise Institute, proposed a new congressional office to analyze regulation; it would be something like a competitor to the executive branch’s Office of Management and Budget. The difficulty with OMB, Hahn argued, is that it is hamstrung by its “intensely political environment.”
Bill Niskanen, who at that time chaired the Cato Institute, responded in another article that “if lawmakers want more or better regulatory analysis, then a congressional office would be valuable and the competition would probably also improve the quality of regulatory analysis in the administration. But it is not at all evident that Congress wants better regulatory analysis.” Niskanen’s article suggests that lawmakers would rather complain about the problem of out-of-control regulators than provide a solution that implies congressional responsibility.
Van Doren also pointed to a different article published in Regulation in 2011 by law professor Jonathan Adler. Adler called for regulatory reform that would require congressional approval of any regulation with a large economic impact. This measure, popularly known as the REINS Act, was born in the federal House of Representatives with over 100 cosponsors; unfortunately, it will likely die there.
As Van Doren told me, “Cost-benefit analysis would be an essential component of this reform and likely have more impact because the legislature could no longer criticize excessive regulation as if they had nothing to do with its enactment.”
It looks like we’re already doing better than Congress in this area. Notably, Senator Jonathan Dismang set into motion the best constitutional amendment proposal of the session: SJR 7, which would require the Arkansas legislature to approve new regulations from state administrative agencies. This addresses half the problem — future regulatory mistakes. If Arkansas can create a process that examines past regulatory mistakes as well (I discussed one possibility, occupational freedom legislation, yesterday), it looks like a future Hutchinson gubernatorial administration would be able to make great progress in this area without lifting a finger.
