Missing The Boat On Regulatory Reform

by Stuart Shapiro

Last week, President Obama issued an executive order that, among other things, asked federal agencies to update regulations that were “outmoded, ineffective, insufficient, or excessively burdensome.” The New York Times quotes critics on both sides of the aisle.

“The history of these kinds of efforts is that they don’t matter very much,” said Peter Van Doren, editor of Regulation magazine, a publication of the libertarian Cato Institute, which generally advocates for less regulation.

Gary Bass, executive director of OMB Watch, a nonprofit that generally advocates for more regulation, said the cost of the search was likely to outstrip the benefits.

“If saccharin is the most serious example the administration can come up with, then it does not justify doing these lookbacks,” he said.

This misses the point entirely.  The Code of Federal Regulations is riddled with provisions that do little to improve public welfare (the Times article itself has numerous examples such as regulators on dry cleaners that are severely out of date).  Just as there are examples of areas that need regulation that are all but ignored (such as antibiotic use in animal feed which increases resistance to antibiotics in humans).

Those who argue that government programs work perfectly are almost as far off as those who argue that the free market maximizes social welfare.  Both groups stand in the way of initiatives like the one announced last week.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.