Regulation

Research

The Unintended Consequences of Safety Regulation Sherzod Abdukadirov \| Jun 03, 2013 This study examines how risk trade-offs undermine safety regulations. Safety regulations often come with unintended consequences in that regulations attempting to reduce risk in one area may increase risks elsewhere.	Evaluating OSHA's Effectiveness and Suggestions for Reform John Leeth, Nathan Hale \| Apr 23, 2013 Congress passed the Occupational Safety and Health Act of 1970 (OSH Act) to create a safer working environment. The Act created two federal agencies: the Occupational Safety and Health Administration (OSHA), which establishes and enforces workplace safety and health standards, and the National Institute for Occupational Safety and Health (NIOSH), which researches the causes and remedies of occupational injuries and illnesses. OSHA is the fourth pillar of the US safety policy system, the others being the legal system, state workers’ compensation insurance programs, and the labor market.
Evaluating the Centralized-Layers Approach to U.S. Federal Financial Regulation David VanHoose \| Apr 02, 2013 This paper draws on the literature that applies economic analysis of regulation to evaluate Dodd-Frank’s centralized-layers financial regulatory structure, which continues a shift toward greater horizontal consolidation of regulation at the federal level but now also vertically integrates US financial regulation within the FSOC.	The Employment Costs of Regulation Keith Hall \| Mar 19, 2013 Concern over the impact of regulations on jobs and job growth is not new, but the efforts of federal agencies to forecast the likely impact of regulatory changes have never focused effectively on labor market impacts.
The Economic Situation, March 2013 Bruce Yandle \| Mar 01, 2013 There was only one lane open as I made my trip to Atlanta; the other three were blocked with those unhappy yellow and black make-believe barrels used by the highway folks. Traffic flow was constrained by efforts to repair potholes and broken pavement. We in the slow lane had little choice in the matter. Instead of 70, we were slowed to 20 miles per hour. We had to accept our fate, or find another route at the next exit.	The Failure of Risk-Based Capital Regulation Thomas L. Hogan, Neil Meredith, Xuhao Pan \| Jan 31, 2013 In this policy brief, the authors explain the fundamentals of risk-based capital (RBC) regulation and discuss some potential shortcomings of this system. We propose that the Fed end its use of RBC regulation and return to the use of simple capital ratios as measures of bank risk.

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Testimony & Comments

Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption Michael L. Marlow \| May 21, 2013 There is insufficient effort to establish the current state of food safety practices and little to no connection is made between those practices and public health. The FDA has not even presented a careful economic modeling of what an optimal set of rules for food safety practices would look like. Rather, the FDA wants to impose a “shotgun” approach on all covered foods rather than one that focuses on those foods or farms that pose the greatest risks. The FDA has acknowledged that it is required by law, by the Food Safety Modernization Act, to pass these standards. However, it is also required by OMB guidelines to analyze options that are not currently legal so as to inform the President and Congress when there are more efficient ways of solving a particular social problem than Congress had envisioned. The FDA should rethink its proposed regulation since there is little to suggest that it is the most efficient or effective option to improve public health.	Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Human Food Michael L. Marlow \| May 21, 2013 The FDA has failed to conduct a thorough and quantitative analysis. The FDA admits it is unable to quantify health benefits derived from this rule. Instead, the FDA has developed a qualitative assessment that describes how implementing this rule would likely reduce the level of foodborne illness. The FDA estimates the “breakeven illness percentage” for each of three closely related regulatory options that are not developed within a model of optimal food safety. The FDA thus does not conduct an in-depth benefit-cost analysis of this major revision of our nation’s food safety regulations.
Financial Market Utilities Hester Peirce \| May 06, 2013 The proposed rules would implement sections 806(a) and (c) of Dodd-Frank, which allow the Board to authorize Reserve Banks to establish and maintain accounts for, provide certain services to,[1] and pay interest on balances maintained by or on behalf of financial market utilities (FMUs) that are designated by the Financial Stability Oversight Council (FSOC) as systemically important or likely to become systemically important.	Long-Term Unemployment Keith Hall \| Apr 24, 2013 Two significant problems have become evident through this lengthy period of slow job growth. First, there has been an unprecedented disengagement from the labor force with current participation at its lowest level in almost 35 years. This means there are currently 102 million jobless people in the United States, but less than 12 million are still actively looking for work and therefore counted as unemployed. Second, the number of long-term unemployed is at a record high. They currently represent over 4.6 million people, and the long-term unemployment rate (the share of the labor force unemployed for over six months) remains well above historical levels at 3.0 percent.
National Highway Traffic Safety Administration Federal Motor Vehicle Safety Standards Jerry Ellig \| Feb 27, 2013 Even if NHTSA does not develop a more cost-effective alternative, Congress and the public deserve an accurate assessment of the likely benefits and costs of the proposed rule. An accurate assessment of benefits would(1) acknowledge that benefits to blind and vision-impaired individuals are just a fraction of the figure in the preliminary RIA, (2) recognize that there are no benefits to pedalcyclists at the speeds covered by the regulation, and (3) base any benefit estimates for people with normal vision on research that identifies the causes of hybrid vehicle collisions with such individuals.	Federal Motor Vehicle Safety Standards; Electronic Stability Control Systems for Heavy Vehicles Antony Dnes \| Aug 20, 2012 NHTSA seeks to establish a new Federal Motor Vehicle Safety Standard (No. 136) that would require electronic stability control (ESC) systems to be fitted as standard on truck tractors and certain passenger buses with a gross vehicle weight rating of greater than 26,000 pounds (vehicles not using air brakes are excluded from the NPRM). ESC systems work by automatically applying computer-controlled braking selectively at separate wheels and inducing lower engine torque output to reduce rollovers and mitigate severe under-steer or over-steer conditions that lead to loss of control in a vehicle.

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Research Summaries & Toolkits

Helping the Poor Without Hurting the Recovery Mark Adams \| Mar 04, 2013 The president’s recent proposal to increase the minimum wage to $9.00 is not the way to help low-income households. Raising the minimum wage is more likely to increase unemployment for some of the least skilled American workers and further impede a historically slow recovery. Research from the Mercatus Center shows that regulatory reform would help low-income families without causing more unemployment or slowing the recovery.	The Regressive Effects of Regulation: Who Bears the Cost? Diana Thomas \| Feb 22, 2013 In a market economy, regulations are often thought of as a useful tool in correcting the imbalance of power between large, entrenched interests and consumers. Federal agencies are supposed to create universal rules of the road that protect the health, safety, and welfare of customers and employees, secondary considerations for companies focused on profits. Recent Mercatus Center research casts doubt on whether the regulatory process actually achieves these goals.
A Process for Cleaning Up Federal Regulations Joshua C. Hall, Michael Williams \| Feb 05, 2013 The concern that American businesses are overly burdened by regulations has legitimate grounds. In 2011, American companies had to comply with over 1 million federal regulatory restrictions, compared with about 860,000 a decade earlier.[1] However, to truly address concerns about overregulation, policy makers cannot focus exclusively on the growth of new regulations. Attention must also be paid to the lack of an efficient and effective regulatory review process for preexisting rules.	Overriding Consumer Preferences With Energy Regulation W. Kip Viscusi, Ted Gayer \| Aug 06, 2012 In the recent Mercatus Center study, “Overriding Consumer Preferences with Energy Regulation,” Ted Gayer, co-director of the Economic Studies program at the Brookings Institution, and W. Kip Viscusi, University Distin- guished Professor of Law, Economics, and Management at Vanderbilt, examined the economic justification for recent U.S. energy regulations proposed by the U.S. Department of Energy, the U.S. Department of Transportation, and the U.S. Environmental Protection Agency (EPA). The study found that the energy-efficiency standards have a relatively minor effect on greenhouse-gas emissions, and—per the regulating agencies’ own estimates—cannot pass cost-benefit analyses based on their environmental benefits alone. To justify these regulations, the agencies relied on estimated benefits derived from correcting consumer “irrationality.”…
Mercatus Center Policy Guide \| Aug 03, 2012 The Mercatus Center at George Mason University is pleased to provide you with our new policy guide. The guide is designed to provide easily accessible economic information that might prove useful in pre- paring for hearings or town hall meetings, drafting speeches or policy papers, and generally educating the public regarding spending, taxes, regulation, financial markets, and technology policy.	Energy Regulations: Protecting "Irrational" Consumers From Themselves? Ted Gayer, W. Kip Viscusi \| Aug 01, 2012 In recent years, federal agencies have issued energy-efficiency standards for everything from cars to light bulbs. These regulations are commonly billed as important efforts to reduce greenhouse gases. But, according to a new study published by the Mercatus Center at George Mason University, the standards have a negligible effect on emissions.

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Speeches & Presentations

The Employment Impact of Regulation Keith Hall \| Jun 14, 2013 Regulation can play an important role in a market economy where there are significant market externalities, incomplete markets, information asymmetries, or public goods. Ideally, regulation identifies and focuses on correcting these market failures with minimal economic cost.	Solving Food Safety Problems Without Antiquated Regulation and Inspection Richard Williams \| Jul 08, 2012 The United States system of ensuring food safety (FS) is more than 100 years old and, until very recently, was the primary system designed to ensure FS. The system assumes that primarily federal regulators have the necessary knowledge to instruct food manufacturers on producing safe food, with both federal and state governments enforcing their respective regulations. While there have been notable successes in the last century — such as mandatory pasteurization for milk and other products, low acid canned food rules, and basic sanitation requirements — much of this progress was achieved in the first half of the 20th century. In the last 30 years, the incidence of foodborne disease has changed very little.
Smart Regulation and Competition Policy in Electric and Telecommunications Markets Jerry Ellig \| Jan 14, 2010 Jerry Ellig participated in panel discussion before Texas policy makers in Austin, Texas at the Texas Public Policy Foundation's Policy Orientation on the future of the Texas Public Utility…	The Future of Federal Regulation Jerry Ellig \| Nov 05, 2009 Jerry Ellig was invited to give a lecture at Pepperdine University about the future of regulations in the federal government.
Regulation and High Reliability Organizations Jerry Ellig \| May 28, 2009 Jerry Ellig presents before the Department of Energy, Office of Health, Safety and Security in the Visiting Speakers Program about regulation in high reliability organizations, such as…	Economics as a Guide to Telecom Reform Jerry Ellig \| Jan 22, 2009 Jerry Ellig presents at a Heartland Institute conference about Ohio telecommunications policy. Dr. Ellig discusses the role of consumer welfare in telecom policy.

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Mercatus Regulatory Studies

Charts

The Phenomenon of Midnight Regulations

Compared with non-election years, the number of economically significant regulations submitted for OIRA review more than doubles during midnight periods when control of the White House switches to a different party. The surge is rarely accompanied by an increase in OIRA’s budget or staff. Thus, OIRA can be overwhelmed during midnight periods, resulting in rushed, flawed oversight.

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Experts

Richard Williams

Richard Williams is the director of policy research at the Mercatus Center at George Mason University. His primary research interests are risk analysis, benefit-cost analysis, regulation, food safety and nutrition, and excise taxes.

Patrick McLaughlin

Patrick A. McLaughlin is a Senior Research Fellow at the Mercatus Center at George Mason University.

Sherzod Abdukadirov

Sherzod Abdukadirov is a research fellow at the Regulatory Studies Program at the Mercatus Center at George Mason University.

Jerry Ellig

Jerry Ellig is a senior research fellow at the Mercatus Center at George Mason University. His primary research interests include the federal regulatory process, economic regulation, and telecommunications regulation.

James Broughel

James Broughel is a program manager of the Regulatory Studies Program at the Mercatus Center. Mr. Broughel is a doctorate student in the economics program at George Mason University. He earned his MA in economics from Hunter College of the City University of New York.

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Videos

Keith Hall discusses the Minimum Wage on Fox 5

Keith Hall | February 13, 2013

Veronique de Rugy Explains France's Spending Crisis on Varney & Company on Fox Business News

Veronique de Rugy | December 18, 2012

Podcasts

Vincent Smith Discusses the Farm Bill with the National Taxpayers Union

Vincent H. Smith | June 17, 2013

In a special extended edition of Speaking of Taxpayers, AEI's Vincent Smith discusses his paper published by the Mercatus Center that thoroughly carves up the hefty Farm Bill that will also be coming up for a vote this coming week.

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Recent Events

Regulation University: The Employment Costs of Regulation

Mercatus scholar Keith Hall will explain what agencies miss in their employment impact analysis for regulation, and what implications that raises for policymakers concerned about the economic impact of regulation over the long-term.

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Books

Freedom in the 50 States, 2013 Edition

William Ruger, Jason Sorens | Mar 28, 2013

Now in its third edition, Freedom in the 50 States presents a completely revised and updated ranking of the American states based on how their policies promote freedom in the fiscal, regulatory, and personal realms.

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The Unintended Consequences of Safety Regulation Sherzod Abdukadirov \| Jun 03, 2013 This study examines how risk trade-offs undermine safety regulations. Safety regulations often come with unintended consequences in that regulations attempting to reduce risk in one area may increase risks elsewhere.	Evaluating OSHA's Effectiveness and Suggestions for Reform John Leeth, Nathan Hale \| Apr 23, 2013 Congress passed the Occupational Safety and Health Act of 1970 (OSH Act) to create a safer working environment. The Act created two federal agencies: the Occupational Safety and Health Administration (OSHA), which establishes and enforces workplace safety and health standards, and the National Institute for Occupational Safety and Health (NIOSH), which researches the causes and remedies of occupational injuries and illnesses. OSHA is the fourth pillar of the US safety policy system, the others being the legal system, state workers’ compensation insurance programs, and the labor market.
Evaluating the Centralized-Layers Approach to U.S. Federal Financial Regulation David VanHoose \| Apr 02, 2013 This paper draws on the literature that applies economic analysis of regulation to evaluate Dodd-Frank’s centralized-layers financial regulatory structure, which continues a shift toward greater horizontal consolidation of regulation at the federal level but now also vertically integrates US financial regulation within the FSOC.	The Employment Costs of Regulation Keith Hall \| Mar 19, 2013 Concern over the impact of regulations on jobs and job growth is not new, but the efforts of federal agencies to forecast the likely impact of regulatory changes have never focused effectively on labor market impacts.
The Economic Situation, March 2013 Bruce Yandle \| Mar 01, 2013 There was only one lane open as I made my trip to Atlanta; the other three were blocked with those unhappy yellow and black make-believe barrels used by the highway folks. Traffic flow was constrained by efforts to repair potholes and broken pavement. We in the slow lane had little choice in the matter. Instead of 70, we were slowed to 20 miles per hour. We had to accept our fate, or find another route at the next exit.	The Failure of Risk-Based Capital Regulation Thomas L. Hogan, Neil Meredith, Xuhao Pan \| Jan 31, 2013 In this policy brief, the authors explain the fundamentals of risk-based capital (RBC) regulation and discuss some potential shortcomings of this system. We propose that the Fed end its use of RBC regulation and return to the use of simple capital ratios as measures of bank risk.

Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption Michael L. Marlow \| May 21, 2013 There is insufficient effort to establish the current state of food safety practices and little to no connection is made between those practices and public health. The FDA has not even presented a careful economic modeling of what an optimal set of rules for food safety practices would look like. Rather, the FDA wants to impose a “shotgun” approach on all covered foods rather than one that focuses on those foods or farms that pose the greatest risks. The FDA has acknowledged that it is required by law, by the Food Safety Modernization Act, to pass these standards. However, it is also required by OMB guidelines to analyze options that are not currently legal so as to inform the President and Congress when there are more efficient ways of solving a particular social problem than Congress had envisioned. The FDA should rethink its proposed regulation since there is little to suggest that it is the most efficient or effective option to improve public health.	Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Human Food Michael L. Marlow \| May 21, 2013 The FDA has failed to conduct a thorough and quantitative analysis. The FDA admits it is unable to quantify health benefits derived from this rule. Instead, the FDA has developed a qualitative assessment that describes how implementing this rule would likely reduce the level of foodborne illness. The FDA estimates the “breakeven illness percentage” for each of three closely related regulatory options that are not developed within a model of optimal food safety. The FDA thus does not conduct an in-depth benefit-cost analysis of this major revision of our nation’s food safety regulations.
Financial Market Utilities Hester Peirce \| May 06, 2013 The proposed rules would implement sections 806(a) and (c) of Dodd-Frank, which allow the Board to authorize Reserve Banks to establish and maintain accounts for, provide certain services to,[1] and pay interest on balances maintained by or on behalf of financial market utilities (FMUs) that are designated by the Financial Stability Oversight Council (FSOC) as systemically important or likely to become systemically important.	Long-Term Unemployment Keith Hall \| Apr 24, 2013 Two significant problems have become evident through this lengthy period of slow job growth. First, there has been an unprecedented disengagement from the labor force with current participation at its lowest level in almost 35 years. This means there are currently 102 million jobless people in the United States, but less than 12 million are still actively looking for work and therefore counted as unemployed. Second, the number of long-term unemployed is at a record high. They currently represent over 4.6 million people, and the long-term unemployment rate (the share of the labor force unemployed for over six months) remains well above historical levels at 3.0 percent.
National Highway Traffic Safety Administration Federal Motor Vehicle Safety Standards Jerry Ellig \| Feb 27, 2013 Even if NHTSA does not develop a more cost-effective alternative, Congress and the public deserve an accurate assessment of the likely benefits and costs of the proposed rule. An accurate assessment of benefits would(1) acknowledge that benefits to blind and vision-impaired individuals are just a fraction of the figure in the preliminary RIA, (2) recognize that there are no benefits to pedalcyclists at the speeds covered by the regulation, and (3) base any benefit estimates for people with normal vision on research that identifies the causes of hybrid vehicle collisions with such individuals.	Federal Motor Vehicle Safety Standards; Electronic Stability Control Systems for Heavy Vehicles Antony Dnes \| Aug 20, 2012 NHTSA seeks to establish a new Federal Motor Vehicle Safety Standard (No. 136) that would require electronic stability control (ESC) systems to be fitted as standard on truck tractors and certain passenger buses with a gross vehicle weight rating of greater than 26,000 pounds (vehicles not using air brakes are excluded from the NPRM). ESC systems work by automatically applying computer-controlled braking selectively at separate wheels and inducing lower engine torque output to reduce rollovers and mitigate severe under-steer or over-steer conditions that lead to loss of control in a vehicle.

Helping the Poor Without Hurting the Recovery Mark Adams \| Mar 04, 2013 The president’s recent proposal to increase the minimum wage to $9.00 is not the way to help low-income households. Raising the minimum wage is more likely to increase unemployment for some of the least skilled American workers and further impede a historically slow recovery. Research from the Mercatus Center shows that regulatory reform would help low-income families without causing more unemployment or slowing the recovery.	The Regressive Effects of Regulation: Who Bears the Cost? Diana Thomas \| Feb 22, 2013 In a market economy, regulations are often thought of as a useful tool in correcting the imbalance of power between large, entrenched interests and consumers. Federal agencies are supposed to create universal rules of the road that protect the health, safety, and welfare of customers and employees, secondary considerations for companies focused on profits. Recent Mercatus Center research casts doubt on whether the regulatory process actually achieves these goals.
A Process for Cleaning Up Federal Regulations Joshua C. Hall, Michael Williams \| Feb 05, 2013 The concern that American businesses are overly burdened by regulations has legitimate grounds. In 2011, American companies had to comply with over 1 million federal regulatory restrictions, compared with about 860,000 a decade earlier.[1] However, to truly address concerns about overregulation, policy makers cannot focus exclusively on the growth of new regulations. Attention must also be paid to the lack of an efficient and effective regulatory review process for preexisting rules.	Overriding Consumer Preferences With Energy Regulation W. Kip Viscusi, Ted Gayer \| Aug 06, 2012 In the recent Mercatus Center study, “Overriding Consumer Preferences with Energy Regulation,” Ted Gayer, co-director of the Economic Studies program at the Brookings Institution, and W. Kip Viscusi, University Distin- guished Professor of Law, Economics, and Management at Vanderbilt, examined the economic justification for recent U.S. energy regulations proposed by the U.S. Department of Energy, the U.S. Department of Transportation, and the U.S. Environmental Protection Agency (EPA). The study found that the energy-efficiency standards have a relatively minor effect on greenhouse-gas emissions, and—per the regulating agencies’ own estimates—cannot pass cost-benefit analyses based on their environmental benefits alone. To justify these regulations, the agencies relied on estimated benefits derived from correcting consumer “irrationality.”…
Mercatus Center Policy Guide \| Aug 03, 2012 The Mercatus Center at George Mason University is pleased to provide you with our new policy guide. The guide is designed to provide easily accessible economic information that might prove useful in pre- paring for hearings or town hall meetings, drafting speeches or policy papers, and generally educating the public regarding spending, taxes, regulation, financial markets, and technology policy.	Energy Regulations: Protecting "Irrational" Consumers From Themselves? Ted Gayer, W. Kip Viscusi \| Aug 01, 2012 In recent years, federal agencies have issued energy-efficiency standards for everything from cars to light bulbs. These regulations are commonly billed as important efforts to reduce greenhouse gases. But, according to a new study published by the Mercatus Center at George Mason University, the standards have a negligible effect on emissions.

The Employment Impact of Regulation Keith Hall \| Jun 14, 2013 Regulation can play an important role in a market economy where there are significant market externalities, incomplete markets, information asymmetries, or public goods. Ideally, regulation identifies and focuses on correcting these market failures with minimal economic cost.	Solving Food Safety Problems Without Antiquated Regulation and Inspection Richard Williams \| Jul 08, 2012 The United States system of ensuring food safety (FS) is more than 100 years old and, until very recently, was the primary system designed to ensure FS. The system assumes that primarily federal regulators have the necessary knowledge to instruct food manufacturers on producing safe food, with both federal and state governments enforcing their respective regulations. While there have been notable successes in the last century — such as mandatory pasteurization for milk and other products, low acid canned food rules, and basic sanitation requirements — much of this progress was achieved in the first half of the 20th century. In the last 30 years, the incidence of foodborne disease has changed very little.
Smart Regulation and Competition Policy in Electric and Telecommunications Markets Jerry Ellig \| Jan 14, 2010 Jerry Ellig participated in panel discussion before Texas policy makers in Austin, Texas at the Texas Public Policy Foundation's Policy Orientation on the future of the Texas Public Utility…	The Future of Federal Regulation Jerry Ellig \| Nov 05, 2009 Jerry Ellig was invited to give a lecture at Pepperdine University about the future of regulations in the federal government.
Regulation and High Reliability Organizations Jerry Ellig \| May 28, 2009 Jerry Ellig presents before the Department of Energy, Office of Health, Safety and Security in the Visiting Speakers Program about regulation in high reliability organizations, such as…	Economics as a Guide to Telecom Reform Jerry Ellig \| Jan 22, 2009 Jerry Ellig presents at a Heartland Institute conference about Ohio telecommunications policy. Dr. Ellig discusses the role of consumer welfare in telecom policy.