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Three Misconceptions about Federal Regulation

Published online by Cambridge University Press:  04 October 2022

Patrick A. McLaughlin Open the ORCID record for Patrick A. McLaughlin [Opens in a new window]  and
Casey B. Mulligan Open the ORCID record for Casey B. Mulligan [Opens in a new window]
Patrick A. McLaughlin*
Affiliation:
Mercatus Center at George Mason University, Arlington, VA, USA
Casey B. Mulligan
Affiliation:
Kenneth C. Griffin Department of Economics, University of Chicago, Chicago, IL, USA
*
*Corresponding author: e-mail: pmclaughlin@mercatus.gmu.edu
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Abstract

Three common misconceptions persist about federal regulations. The first misconception is that most new regulations concern the environment, but in fact, only a small minority of regulatory flows are environmental. The second misconception is that regulators offer reasonable justifications and quantitative evidence for the majority of regulations. However, quantitative estimates rarely appear in published rules, negating the impression given by executive orders and Office of Management and Budget guidance, which require cost-benefit analysis (CBA) and clearly articulate sound economic principles for conducting CBA. Environmental rules have relatively higher-quality CBAs, at least by the standards of other federal rules. The third misconception, which is particularly relevant to the historic regulations promulgated during the COVID-19 pandemic, is that regulatory costs are primarily clerical, rather than opportunity or resource costs.

Keywords

regulationRegDataCOVID-19paperwork costsenvironmental economics

JEL classification

Q58: Government Policy L51: Economics of Regulation K23: Regulated Industries and Administrative Law
Type
Article
Information
Journal of Benefit-Cost Analysis , Volume 13 , Issue 3 , Fall 2022 , pp. 287 - 309
Copyright
© The Author(s), 2022. Published by Cambridge University Press on behalf of the Society for Benefit-Cost Analysis

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