For regulators, it’s not easy looking back

“Don’t look back. Something might be gaining on you.” — Leroy “Satchel” Paige, Hall of Fame baseball pitcher.

Despite the warning by Paige, President Obama issued Executive Order 13563 in 2011, directing regulatory agencies to engage in “retrospective review,” an assessment of old regulations to see if they were still working and whether they could be improved. Just this week, Speaker Paul Ryan (R-Wis.) made retrospective review a significant part of his regulatory agenda. The impulse behind retrospective review is a sound one. With businesses complaining about large regulatory burdens, and new issues such as climate change demanding policy solutions, trying to figure out if we can get rid of older rules that aren’t working is the right course of action.

{mosads}But moving from theory to practice is tricky. On the positive side, agencies are now issuing regular reports on their retrospective reviews and there have been some success stories of burdens reduced and regulations modified. But there have also been significant challenges. One study that looked at the cost reductions associated with retrospective review found that costs associated with reviewed regulations have actually gone up. I’ve done work on retrospective reviews at the state level and found that the impact of the reviews have been minimal.

Why doesn’t retrospective review work as intended? In part, it may not be fair to ask this question as the requirement at the federal level is relatively new and Obama’s attempts at getting agencies to look back has been more successful than any of his predecessors. But the failures of previous presidents and the limitations to Obama’s efforts are not random. There are three categories of problems for retrospective review: psychological obstacles, practical obstacles and political obstacles.

How many times do you go back and revisit your decisions from five or 10 years ago? And if you do, how often do you decide that you made a big mistake and take efforts to rectify it? Agencies are made up of human beings and we in general are not very good at self-examination. If an agency looks back and decides that a regulation is not working, it is just as likely to think that this is due to external factors rather than the regulation itself. Just like the rest of us would.

Second, doing a retrospective review right is hard. It involves getting the best answers to numerous difficult questions, which may mean a time-consuming process of information collection. For instance, in evaluating an air pollution regulation, the Environmental Protection Agency (EPA) would have to determine whether pollution decreased because of the regulation or for some other reason (a decrease in economic production, for example). Meanwhile, the agency would also need to determine if the regulation led companies to lose money or whether the broader economy (globalization for example) was at fault. These are not trivial questions. Assuming an agency concludes that repeal of a regulation is wise, it must then initiate a process that is likely to take at least a year.

Agencies can be forced to do difficult things that they are not normally inclined to do. But this requires political will. And the political support for retrospective review from interest groups and the public is very limited. Groups favoring regulation are concerned that retrospective review will lead to the erosion of public health protections. Industries have largely learned to live with regulations and see the prevention of new regulations as a higher priority than the repeal of old ones (and they may see old regulations as a helpful barrier to new competition).

With all this against it, the emphasis of the Obama administration on looking back at old regulations is admirable, and its limited success is not too surprising. We should hope that the next administration will build on the infrastructure for retrospective review established by President Obama and find new ways to ensure its more effective implementation.

Shapiro is an associate professor and director of the Public Policy Program at Rutgers University and a member of the Scholars Strategy Network.