Counting Regulatory Benefits and Costs: Lessons for the U.S. and Europe

We offer six recommendations for improving the quality and transparency of regulatory oversight and analysis: three recommendations for the United States and three for Europe. For the U.S., we suggest that: 1. The Office of Management and Budget (OMB) apply its in-house expertise to evaluate the costs and benefits of regulations; 2. Congress pass a law requiring that all federal regulatory agencies submit annual cost and benefit estimates of major regulations to OMB; and 3. OMB issue a scorecard assessing the overall quality of regulation and ask the agencies to complete a scorecard for each major regulation.

For Europe, we suggest that: 1. The European Union (EU) pass a directive specifying that the primary objective of regulation is to maximize net benefits; 2. The EU create a strong centralized regulatory oversight unit to help evaluate regulatory proposals; and 3. The EU, as well as each member state, create a structure that is balanced, which promotes efficient regulation and discourages inefficient or ineffective regulation.