Can executive review help prevent capture?

Preventing Regulatory Capture: Special Interest Influence and How to Limit it

Volumn , Issue , 2013, Pages 420-450

  Livermore, Michael A ^a   Revesz, Richard L ^b,c  

^a NEW YORK UNIVERSITY SCHOOL OF LAW   (United States)

^b NATIONAL ACADEMY OF SCIENCES   (United States)

^c AMERICAN ACADEMY OF ARTS AND SCIENCES   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84928087365     PISSN: None     EISSN: None     Source Type: Book    
DOI: 10.1017/CBO9781139565875.021     Document Type: Chapter

References (105)

1. This chapter is adapted from Michael A. Livermore and Richard L. Revesz, “Regulatory Review, Capture, and Agency Inaction,” Georgetown Law Journal 101 (2013): 1337.
2. OMB Watch, “The Obama Approach to Public Protection: The Regulatory Process” (Report, 2011)
3. Amy Sinden, Rena Steinzor, Shana Jones, and James Goodwin, “Obama’s Regulators: A First-Year Report Card 28-30” (Center for Progressive ReformWhite Paper No. 1001, January 2010). President Nixon initiated a “Quality of Life Review,” which required the Environmental Protection Agency and the Occupational Health and Safety Agency to engage in an interagency consultation process and provide an estimate of the costs of proposed regulation along with a set of alternatives.
4. Thomas O. McGarity, Reinventing Rationality: The Role of Regulatory Analysis in the Federal Bureaucracy (New York: Cambridge University Press, 1991), 18.
5. Curtis W. Copeland, “The Role of the Office of Information and Regulatory Affairs in Federal Rulemaking,” Fordham Urban Law Journal 33 (2006): 1257, 1264.
6. Exec. Order No. 12,044, 3 C.F.R. 152 (1979).
7. Exec. Order No. 12,044, 3 C.F.R. 152 §3.
8. Exec. Order No. 12,291, 3 C.F.R. 127 (1981)
9. reprinted in 5 U.S.C. § 601 (1988)
10. revoked by Exec. Order No. 12,866, 3 C.F.R. 638 (1993)
11. reprinted in 5 U.S.C. §601 (2000).
12. Exec. Order No. 12,291, 3 C.F.R. 127 § 3(f)(1).
13. RichardH. Pildes and Cass R. Sunstein, “Reinventing the Regulatory State,” TheUniversity of Chicago Law Review 62 (1995): 1, 5-6.
14. Exec. Order No. 12,866, 3 C.F.R. 638 (1994)
15. reprinted in 5 U.S.C. § 601 (2000).
16. Exec. Order No. 12,866 §§ 1(a), 1(b)(5), 6(b)(4).
17. Michael A. Livermore and Richard L. Revesz, “Retaking Rationality Two Years Later,” Houston Law Review 48 (2011): 1, 12-19.
18. “Memorandum on Regulatory Review,” Daily Compilation of Presidential Documents (January 30, 2009): 287.
19. Exec. Order No. 13,563, § 1(a), 76 Fed. Reg. 3821, 3821 (January 21, 2011).
20. Michael A. Livermore, “A Brief Comment on Humanizing Cost-Benefit Analysis,” Euro- pean Journal of Risk Regulation 2 (2011): 13.
21. Sidney A. Shapiro and Ronald F. Wright, “The Future of the Administrative Presidency: Turning Administrative Law Inside-Out,” University ofMiami Law Review 65 (2011): 577, 613.
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24. SeeMark Seidenfeld, “A Big Picture Approach to Presidential Influence on Agency Policy- Making,” Iowa Law Review 80 (1994): 1.
25. See generally Center for Progressive Reform, “A Return to Common Sense: Protecting Health, Safety, and the Environment through ‘Pragmatic Regulatory Impact Analysis’” (2009).
26. George J Stigler, “The Theory of Economic Regulation,” Bell Journal of Economics 2 (1971): 3.
27. Richard A. Posner, “Theories of Economic Regulation,” Bell Journal of Economics 5 (1974): 335.
28. Sam Peltzman, “Toward a More General Theory of Regulation,” Journal of Law and Economics 19 (1976): 211.
29. Gary S. Becker, “A Theory ofCompetition among PressureGroups for Political Influence,” Quarterly Journal of Economics 98 (1983): 371.
30. Lawrence G. Baxter, “‘Capture’” in Financial Regulation: Can We Channel It Toward the Common Good?” Cornell Journal of Law & Public Policy 21 (2011): 175, 178.
31. Nicholas Bagley, “Agency Hygiene,” Texas Law Review See Also 89 (2010): 1, 2. See Rachel E. Barkow, “Insulating Agencies: Avoiding Capture through Institutional Design,” Texas Law Review89 (2010): 15.
32. See, for example, Murray L.Weidenbaum, “The High Cost of Governmental Regulation,” Challenge (November-December 1979): 32-39.
33. Bruce Yandle, “Bootleggers and Baptists-The Education of a Regulatory Economist,” Regulation (May/June 1983): 12
34. Bruce Yandle, “Bootleggers and Baptists in Retrospect: The Marriage of High-Flown Values and Narrow Interests Continues to Thrive,” Regulation 22 (3) (Fall 1999): 5.
35. Lloyd N. Cutler and David R. Johnson, “Regulation and the Political Process,” Yale Law Journal 84 (1975): 1395, 1396.
36. William A. Niskanen, Bureaucracy and Representative Government (Chicago: Aldine, Atherton, 1971), 38.
37. David B. Spence, “Administrative Law and Agency Policy-Making: Rethinking the Positive Theory of Political Control,” Yale Journal on Regulation 14 (1997): 407, 424.
38. E. Donald Elliott, “TQM-ing OMB: Or Why Regulatory Review under Executive Order 12,291Works Poorly andWhat President Clinton Should Do about It,” Law and Contem- porary Problems 57 (1994): 167, 176.
39. Bruce Ackerman, “The New Separation of Powers,” Harvard Law Review 113 (2000): 633, 698.
40. Christopher C. DeMuth and Douglas H. Ginsburg, “White House Review of Agency Rulemaking,” Harvard Law Review 99 (1986): 1075, 1082.
41. Elena Kagan, “Presidential Administration,” Harvard Law Review 114 (2001): 2245, 2336.
42. Christopher C.DeMuth and DouglasH. Ginsburg, “Rationalism in Regulation,” Michigan Law Review 108 (2010): 877, 904.
43. Christopher C.DeMuth and DouglasH. Ginsburg, “Rationalism in Regulation,” Michigan Law Review 108 (2010): 903.
44. Christopher C.DeMuth and DouglasH. Ginsburg, “Rationalism in Regulation,” Michigan Law Review 108 (2010): 904.
45. Christopher C.DeMuth and DouglasH. Ginsburg, “Rationalism in Regulation,” Michigan Law Review 108 (2010): 905.
46. Christopher C.DeMuth and DouglasH. Ginsburg, “Rationalism in Regulation,” Michigan Law Review 108 (2010): 904.
47. Christopher C.DeMuth and DouglasH. Ginsburg, “Rationalism in Regulation,” Michigan Law Review 108 (2010): 906.
48. See Federal Election Commission, “2000 Presidential Popular Vote Summary” (January 2001).
49. Wilson (1912, 1916), Truman (1948), Kennedy (1960), Nixon (1968), Clinton (1992, 1996).
50. See generally Daniel Hays Lowenstein, “On Campaign Finance Reform: The Root of All Evil Is Deeply Rooted,” Hofstra Law Review 18 (1989): 301.
51. See generally Anthony Busch and William G. Mayer, The Front-Loading Problem in Presi- dential Nominations (Washington, D.C.: Brookings Institution, 2004).
52. Cf. D. Sunshine Hillygus and Todd G. Shields, The Persuadable Voter: Wedge Issues in Presidential Campaigns (Princeton: Princeton University Press, 2008), 13-14.
53. OksanaMalanchuk, Arthur H.Miller, andMartin P.Wattenberg, “Schematic Assessments of Presidential Candidates,” American Political Science Review 80 (1986): 521.
54. Michael S. Lewis-Beck, William G. Jacoby, Helmut Norpoth, and Herbert F.Weisberg, The American Voter Revisited (Ann Arbor, MI: The University of Michigan Press, 2008), 365-93.
55. Cynthia R. Farina, “Faith, Hope, and Rationality or Public Choice and the Perils of Occam’s Razor,” Florida State University Law Review 28 (2000): 109, 128-29
56. Jide Nzelibe, “The Fable of the Nationalist President and the Parochial Congress,” UCLA Law Review 53 (2006): 1217, 1231-42.
57. Nolan M. McCarty, “Presidential Pork: Executive Veto Power and Distributive Politics,” American Political Science Review 94 (2000): 117, 118.
58. Cf. Steven D. Levitt and James M. Snyder, Jr., “Political Parties and the Distribution of Federal Outlays,” American Journal of Political Science 39 (1995): 958.
59. Nicholas Bagley and Richard L. Revesz, “Centralized Oversight of the Regulatory State,” Columbia Law Review 106 (2006): 1260.
60. E. Donald Elliott, “TQM-ing OMB,” 176.
61. Steven P. Croley, “Public Interested Regulation,” Florida State University Law Review 28 (2000): 7, 33-49.
62. Croley, “Public Interested Regulation,” 36.
63. See Richard L. Revesz, “Specialized Courts and the Administrative Lawmaking System,” University of Pennsylvania Law Review 138 (1990): 1111, 1150
64. Michael E. Levine and Jennifer L. Forrence, “Capture, Public Interest, and the PublicAgenda:Toward a Synthesis,” The Journal of Law, Economics, & Organization 6 (1990): 167, 184.
65. See Jonathan R. Macey, “Organizational Design and Political Control of Administrative Agencies,” Journal of Law, Economics, & Organization 8 (1992): 93, 99. It is worth noting that there is some specialization even within OIRA, so that a desk officer will deal with only a handful of agencies. Nevertheless, capture of even the more specialized personnel in OIRA is relatively more costly, and the benefits of generalization are evenmore clear for the OIRA Administrator.
66. Mancur Olson, The Logic of Collective Action, rev. ed. (Cambridge, MA:HarvardUniversity Press, 1971), 2, 48, 53.
67. Richard L. Revesz, “Federalism and Environmental Regulation: A Public Choice Analysis,” Harvard Law Review 115 (2001): 533, 561.
68. James Madison, The Federalist, no. 10, ed. Clinton Rossiter (New York: New American Library, 1961), 82-84.
69. Eric Biber, “Too Many Things to Do: How to Deal with the Dysfunctions of Multiple-Goal Agencies,” Harvard Environmental Law Review 33 (2009): 1
70. J.R. DeShazo and Jody Freeman, “PublicAgencies as Lobbyists,”Columbia LawReview105 (2005): 2217, 2220.
71. Bagley, “Agency Hygiene,” 10.
72. Under Executive Order 12,866, OIRA is generally required to complete its review within 90 days after an agency formally submits a draft regulation. See Exec. Order No. 12,866, 3 C.F.R. 638 (1994), reprinted in 5 U.S.C. § 601 (2000).
73. Jody Freeman and Jim Rossi, “Agency Coordination in Shared Regulatory Space,”Harvard Law Review 25 (2012): 1131, 1180.
74. Peter L. Strauss and Cass R. Sunstein, “The Role of the President in Informal Rulemaking,” Administrative Law Review 38 (1986): 181, 189-90.
75. DeShazo and Freeman, “Public Agencies as Lobbyists,” 2299.
76. Bagley and Revesz, “Centralized Oversight of the Regulatory State,” 1264-65.
77. Letter from Michael A. Livermore et al., Institute for Policy Integrity, New York University School of Law, to Cass Sunstein, Administrator, Office of Information and Regulatory Affairs (May 11, 2012), in the author’s possession.
78. Robert W. Hahn and Cass R. Sunstein, “A New Executive Order for Improving Federal Regulation? Deeper and Wider Cost-Benefit Analysis,” University of Pennsylvania Law Review 150 (2002): 1489, 1498-99.
79. U.S. Environmental Protection Agency, “Guidelines for Preparing Economic Analyses” (2010).
80. Exec. Order 13,132, 64 Fed. Reg. 43,255 (August 10, 1999).
81. CatherineM. Sharkey, “FederalismAccountability: ‘Agency-Forcing’Measures,” Duke Law Journal 58 (2009): 2125, 2164, 2177.
82. Michael A. Livermore, “Cost-Benefit Analysis and Agency Independence,” forthcoming.
83. Wendy E. Wagner, “Administrative Law, Filter Failure, and Information Capture,” Duke Law Journal 59 (2010): 1321, 1393.
84. Sidney A. Shapiro and Christopher H. Schroeder, “Beyond Cost-Benefit Analysis: A Pragmatic Reorientation,” Harvard Environmental Law Review 31 (2008): 433, 436.
85. Office of Information and Regulatory Affairs, “Regulatory Impact Analysis: A Primer” (2011).
86. Memorandum from Cass R. Sunstein, Administrator, Office of Information and Regulatory Affairs, for the Heads of Executive Departments and Agencies (June 18, 2010), 3, 6.
87. Memorandum from Sunstein (2010), 3-5.
88. Paperwork Reduction Act of 1980, Pub. L. No. 96-511, 94 Stat. 2812 (December 11, 1980).
89. 76 Fed. Reg. 3,821 (January 21, 2011).
90. Fed. Reg. 3,821 § 6.
91. Memorandum from Cass R. Sunstein, Administrator, Office of Information and Regulatory Affairs, for the Heads of Executive Departments and Agencies (April 25, 2011). The memorandum also encouraged agencies to consider ways to institute empirical testing of the effects of their rules both prospectively and retrospectively.
92. “Regulation Reform,” WhiteHouse.gov, http://www.whitehouse.gov/21stcenturygov/actions/21st-century-regulatory-system.
93. Government Accountability Office, “Reexamining Regulations: Opportunities Exist to Improve Effectiveness and Transparency of Retrospective Reviews” (GAO-07-791, 2007), 17.
94. Government Accountability Office, “Assessing the Impacts of EPA’s Regulations Through Retrospective Studies” (GAO-/RCED-99-250, 1999), 17 (criticizing EPA’s “ad hoc approach” to retrospective review-less than 5 percent of the economically significant rules promulgated over the seven-year study period were reviewed-because it offered “no assurance that economically significant regulations will be subjected to review”).
95. Government Accountability Office, “Reexamining Regulations,” 50-51.
96. Richard L. Revesz and Michael A. Livermore, Retaking Rationality: How Cost-Benefit Analysis Can Better Protect the Environment and Our Health (New York: Oxford University Press, 2008), 155-56 (describing earlier attempts by OIRA to coordinate the review and elimination of inefficient regulations through the use of a “hit list” of regulations that was not publicized or tracked).
97. Michael A. Livermore and Jason A. Schwartz, “Unbalanced Retrospective Regulatory Review,” RegBlog, July 12, 2012, https://www.law.upenn.edu/blogs/regblog/2012/07/12-livermore-schwartz-review.html.
98. Exec. Order 13,610, 77 Fed. Reg. 28,469 § 3 (May 10, 2012).
99. See Daryl J. Levinson, “Empire-Building Government in Constitutional Law,” Harvard Law Review 118 (2005): 915, 932-43.
100. Glen Staszewski, “The Federal Inaction Commission,” Emory Law Journal 59 (2009): 369, 375-82.
101. Michael A. Livermore, “Reviving Environmental Protection: Preference-Directed Regulation and Regulatory Ossification,” Virginia Environmental Law Journal 25 (2007): 311.
102. See Michael A. Livermore, “Cause or Cure? Cost-Benefit Analysis and Regulatory Gridlock,” New York University Environmental Law Journal 17 (2008): 107, 119-20.
103. Bagley and Revesz, “Centralized Oversight of the Regulatory State,” 1277-80.
104. Massachusetts v. EPA, 549 U.S. 497 (2007).
105. See generally Jody Freeman and Adrian Vermeule, “Massachusetts v. EPA: From Politics to Expertise,” Supreme Court Review 2007: 51.