A Solution to the Midnight Regulation Outburst

A Solution to the Midnight Regulation Outburst

Summary

At the end of each administration-and especially between administrations of opposite parties-there is a dramatic spike in regulatory activity. This "midnight regu­lation" phenomenon is well documented. Its causes include the desire of the outgoing administra­tion to extend its influence into the future as well as the opportunity to impose costs on the incoming administra­tion. In fact, the high political costs a new administration faces in order to overturn last-minute rules makes it an effective strategy for the outgoing administration to project its influence beyond its term.

By the Numbers

  • During the midnight periods of the Bush I and Clinton presidencies, when the transition was to a president of the opposite party, the number of economi­cally significant regulations that OIRA was asked to review more than doubled from the same period in the immediately preceding years. However, there was no concurrent increase in the resources available to OIRA.
  • Relative to the mean review time between 1994 and 2007, the Clinton mid­night period witnessed a decrease in mean review time of about twenty-seven days—a drop of over 50 percent from an average of fifty-three days per regulation.

Recommendations

Our solution tries to mitigate the negative effects of mid­night regulations by changing the incentives of the outgoing administration. We suggest limiting the number of economi­cally significant rules OIRA can be expected to review during a given period, dependent on the resources available to OIRA. This preserves the quality of OIRA’s review while allowing for greater numbers of rules to be considered when OIRA is granted sufficient resources to review them.

 

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