Abstract
Aligica et al. 2019) posit that a form of public administration founded in the classical liberal tradition should recognize value heterogeneity, which would create a need for coproduction of rules and polycentricity in the production of rules. Utilizing a dataset of 130 economically significant executive branch regulations proposed between 2008 and 2013, this paper assesses whether US regulators act in a manner consistent with the predictions of their theory. US federal agencies use several methods that could facilitate coproduction of rules by stakeholders. Statistical analysis finds that agencies are more likely to employ some stakeholder participation strategies for the types of regulations that may involve more heterogeneous values. However, there is scant evidence that the stakeholder participation strategies that agencies employ more extensively when values are more heterogeneous are associated with consideration of a wider variety of alternatives. There is no evidence that agencies consider a wider scope of alternatives for regulations that may involve more heterogeneous values. Therefore, value heterogeneity and stakeholder participation have not by themselves been sufficient to move the US toward a polycentric regulatory system.
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Notes
“Economically significant” regulations have benefits, costs, or other economic impacts of $100 million or more annually, or satisfy certain other requirements articulated in Executive Order 12866 (1993), which governs regulatory analysis and review in the executive branch. “Prescriptive” regulations are regulations that primarily contain mandates or prohibitions. The sample thus excludes budget or “transfer” regulations, which outline rules governing federal expenditure or revenue collection programs.
Healthcare regulation in the US, for example, is largely economic regulation applied to the healthcare industry. Distributional concerns are a significant source of contention, but most outputs are sold in the market at some price (albeit heavily distorted), and issues like effects on future generations and existence value are not as prominent as with environmental regulation. Workplace and product safety regulation involve effects that largely fall on business firms and employees or customers, rather than diffuse groups of stakeholders. Security regulation involves tradeoffs between a clear public good – defense against terrorists and other aggressors – and costs largely borne directly by stakeholders – such as expenditures, invasion of privacy, and reduced personal liberty. Civil rights regulations involve fundamental human rights, creating a potential for conflicts of values; fortunately, there is now probably greater consensus about the values protected by civil rights regulations than existed in bygone eras.
The only seemingly counterintuitive result is that safety regulations are less likely to be preceded by a preproposal notice. However, safety regulations are also more likely to be developed in consultation with industry. Perhaps the safety regulators see industry consultation as a more productive means of getting industry input than offering preproposal opportunities for public comment.
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The author would like to thank Mark Adams, Nicholas Krosse, and Jesse Martinez for research assistance.
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Ellig, J. Coproduction of regulations under the administrative procedure act: How close is the US to a classical Liberal regulatory system?. Rev Austrian Econ 34, 373–391 (2021). https://doi.org/10.1007/s11138-019-00486-5
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DOI: https://doi.org/10.1007/s11138-019-00486-5
Keywords
- Regulation
- Regulatory process
- Administrative procedure act
- Coproduction
- Polycentricity
- Classical liberal
- Value heterogeneity
- Ostrom