An Analysis of the Third Government Report on the Benefits and Costs of Federal Regulations

Robert Hahn and
Robert Hahn
Robert Hahn Director of Economics - Smith School of Enterprise and the Environment at the University of Oxford, Former Brookings Expert
Robert E. Litan

February 15, 2000

Executive Summary

This paper critically reviews the draft of the Office of Management and Budget’s third report on the benefits and costs of federal regulation. The purpose of this analysis is to offer constructive recommendations for improving that report.

We conclude that that report represents a small improvement over the second report. There is, however, room for even more progress. We suggest that OMB make greater use of its in-house expertise to refine estimates of benefits and costs and that it place greater emphasis on those regulations that do not pass a benefit-cost test based on numbers provided by agencies themselves. Using agency numbers reported by OMB, we calculate that about ten recent regulations would not pass a strict benefit-cost test. The OMB should either suggest eliminating or reforming these regulations or explain why they should be kept in place.

We also believe that OMB should assemble a scorecard that would assess and compare the quality of regulations and provide guidance on standardizing the content and summary of regulatory analyses. Such changes in presentation would make it easier for interested parties to understand the impacts of regulations and to determine agency compliance with legislation, executive orders, and OMB guidelines.