What is innovation in government? It’s not just about transparency or finding cheaper ways to deliver existing services. Instead, innovation in government is about changing the rules and dynamics to achieve our social goals without intervening in the private sector more than is absolutely necessary.
In particular, I’ve grown increasingly concerned about the accretion of regulations as a barrier to businesses bringing beneficial new technologies to market. The problem is that we don’t have a good mechanism for identifying and modifying regulations that are obsolete and burdensome.
So, here’s a new paper I wrote for PPI entitled Reviving Jobs and Innovation: A Progressive Approach to Improving Regulation.
Today, the U.S. is suffering from a regulatory paradox: Too few and too many regulations at the same time. On the one hand, financial services were clearly under-regulated during the 2000s, making financial reform essential. Similarly, President Obama’s healthcare reform bill was a key first step to reining in medical costs.
But in other areas we see an accumulation of rules and regulations over the past decade. The trend started with the vast expansion of homeland security regulation under the Bush administration and continued through the first two years of the Obama administration.
That’s why President Obama should be applauded for issuing his executive order “Improving Regulation and Regulatory Review” on January 18. The order asked agencies to pay more attention to promoting innovation as part of the regulatory process. In addition, agencies were directed to come up with a plan for reviewing their existing significant regulations.
However, the president’s executive order did not go far enough. A regulatory ‘self-review’ process has been tried repeatedly in the past, and it’s always fallen far short of expectations. Regulators have a tough time trimming their own regulations, given internal bureaucratic pressures. But don’t blame the agencies—neither Congress nor the executive branch has a good way of reviewing and reforming existing regulations, even when they have become outdated or burdensome.
The regulatory system needs a mechanism to address this need for periodic review. We propose a Regulatory Improvement Commission (RIC), an independent body analogous to the BRAC Commissions for evaluating military base closures. This is designed to build on the president’s executive order, and in the process improve its effectiveness. The RIC will take a principled approach to evaluating and pruning existing regulations, gather input from all stakeholders (not just business or just agencies), and do so in a manner that ensures we protect public health, safety, and the environment.
Read the rest.