ACUS, the Administrative Conference of the United States, is strongly committed to boost and improve Agencies’ use of regulatory etrospective review. On November 17th 2014, it published a report, by Joseph E. Aldy from Kennedy School of Government, Harvard University, entitled “Learning from Experience: An Assessment of the Retrospective Reviews of Agency Rules and the Evidence for Improving the Design and Implementation of Regulatory Policy”, which takes stock of the situation about retrospective review since its adoption.
ACUS acknowledges, indeed, that, despite a long track record of prospective analysis of proposed regulations, there exists a mixed track record on retrospective review of existing rules, although every administration, dating back to the Carter Administration (in 1978) has implemented some form of regulatory ex-post evaluation. Ever since, a valuable number of acts and executive orders have further detailed retrospective review.
Nonetheless, heterogeneity in approaches and quality still feature these activities. This is why ACUS has requested an assessment of the practice of the Obama Administration’s retrospective review, that has been placed in the context of the academic literature and previous efforts on retrospective review by public organizations.
The report highlights that, although the Obama Administration has focused on the importance of developing a culture of retrospective review, no more than about 10 percent of new regulations are the result of retrospective review of existing rules, and none include plans for conducting a future retrospective analysis. Moreover, retrospective reviews seem to have been focused on minimizing net costs rather than maximizing net benefits, and, more generally, they appear to have overlooked benefits’ appraisals, being mostly focused on costs.
Based on the retrospective review programmes under the Obama Administration and previous administrations, Aldy recommends the following steps in order to improve and institutionalize retrospective review of Agency rules:
- adoption of Retrospective Review Guidelines, developed by the OMB, Office of Management and Budget, in collaboration with the regulatory agencies;
- integrating Retrospective Review into New Regulations: namely, agencies should present in the rule’s preamble a framework for reassessing the regulation at a later date;
- agencies should consider assigning the responsibility for conducting retrospective review to a set of independent officials;
- more regulatory coordination between the OMB and the regulatory agencies, which would also reduce overlaps among different regulatory programmes;
- Aldy also encourages the OMB to take action together with the Council of Economic Advisers to coordinate an interagency process for the assessment of the cumulative regulatory burden across regulatory programmes.
- Agencies should keep on paying high attention to stakeholders’ engagement and public consultations on retrospective review;
- Focus on resources: enhancing and institutionalizing retrospective review will require additional resources, and the Administration and Congress should explore ways to provide resources for doing so.
Following the detailed report, and drawing from its main insights, on December 4th 2014, ACUS formally adopted Recommendation 2014-5, “Retrospective Review of Agency Rules”, reportedly intended to provide a framework for cultivating a “culture of retrospective review” within regulatory agencies.
Agencies are thus encouraged to make a plan for reassessing existing regulations and to design new ones in a way that will make later retrospective review easier and more effective.
A noticeable keypoint that ACUS means to maintain, and that also Aldy’s report remarked at times, is the need for Agencies to tailor their own lookback regulatory procedures, though relying on a common understanding and based on common principles.
In short, ACUS affirms, retrospective review is not a “one size fits all” enterprise, and it needs to move away from an episodic model, quite aside from the regulatory process, to one where agencies internalize a “culture of retrospective review, acknowledging its benefits on final regulatory outputs.
Photo credits: Helena Eriksson