Centralized Regulatory Review in the United States: Past Practice and New Developments

Studies have shown that economies governed by regulation that is clear, consistent, and respectful of property rights are more successful economically than economies that face heavy regulation. Less regulated economies enjoy greater labor productivity and employment, less corruption, and fewer incentives for individuals to operate in an informal or underground economy. To sum up, I would like to offer a number of conclusions. First, the U.S. experience indicates that a firm and enduring commitment from the center of government is a necessary condition for a successful regulatory program. This is particularly true when regulatory reform imposes short term costs before greater long term benefits materialize. Second, an affective regulatory program should ensure that economic analysis is conducted to promote economic efficiency. Economic efficiency implies market-based and pro-competition reforms that are nondiscriminatory. Third, accountability is required because special interests are especially powerful in regulatory matters. Finally, transparency and openness are required to maintain long term support for the program.