Editor’s Note: Professors Glaeser and Sunstein state that “the modern era of regulatory review began in 1981 when President Reagan issued Executive Order 12291….” However, as OMB explains on their website following a discussion of White House review of agency regulations in the Nixon and Ford Administrations,
“After President Carter came to office in 1977, the regulating agencies argued that the Executive Office of the President should not have a role in reviewing their regulations. On the other hand, the President’s chief economic advisers argued that a centralized review program based on careful economic analysis was necessary to assure that regulatory burdens on the economy were properly considered and that the regulations that were issued were cost effective. Rapidly escalating inflation in 1978 convinced President Carter of the need to act. In March of 1978, he issued Executive Order 12044, ‘Improving Government Regulations.’ It established general principles for agencies to follow when regulating and required regulatory analysis to be done for rules that ‘may have major economic consequences for the general economy, for individual industries, geographical regions or levels of government.'”
From: National Affairs
EDWARD GLAESER and CASS R. SUNSTEIN
Dudley Square is Boston’s busiest bus stop, with 30,000 passengers passing through daily. Eighty thousand people live within a mile of the stop. Yet the area is an entertainment vacuum, with almost no restaurants, clubs, or coffee houses. The lack of local businesses is not just an inconvenience to local residents; it represents a dearth of service-sector jobs that are badly needed in the neighborhood.
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REGULATING REGULATIONS
For the federal government, the modern era of regulatory review began in 1981 when President Reagan issued Executive Order 12291, imposing two sets of requirements, both effectively binding on the executive branch. The first was procedural; the second was substantive.
Reagan’s procedural requirement directed agencies to submit their regulations to the Office of Management and Budget for approval. Created by the 1980 Paperwork Reduction Act and operating within OMB, the Office of Information and Regulatory Affairs (OIRA) gained a great deal of authority over the regulatory process. Subject ultimately to the power of the president himself, OIRA could effectively decline to authorize agencies to impose regulations on the public. It was understood that OIRA would not be acting on its own; its decisions would be reached in close concert with others in the executive branch, including technical specialists of various kinds — an important point to which we will return.
