March 21, 2019

Efficiency Analysis Would Aid Regulatory Policymaking in South Carolina

Testimony before the South Carolina General Government Legislative Subcommittee

Dear Chairwoman Cobb-Hunter and members of the General Government Legislative Subcommittee:

My name is James Broughel, and I am a senior research fellow at the Mercatus Center at George Mason University and an adjunct professor of economics and law at George Mason University. In my capacity as a researcher, I have recently produced a report analyzing the regulatory environment in South Carolina.

Based on textual analysis of the South Carolina Code of State Regulations (SCCSR), my research has demonstrated that the SCCSR contained 4.7 million words as of February 2019. It would take an individual about 263 hours—or about six and a half weeks—to read the entire SCCSR. That’s assuming the reader spends 40 hours per week reading and reads at a rate of 300 words per minute. Of those 4.7 million words, 78,676 are restrictive terms, by which I mean the words and phrases shall, must, may not, prohibited, and required—terms that can signify legal constraints and obligations placed upon citizens.

With so much regulation on the books, it is important that legislators ensure these mandates and prohibitions are solving real problems and doing so at a reasonable cost. One way to help guarantee that rules are fact-based, efficient, and supported by the latest scientific and technical evidence is through the use of analytical tools such as cost-benefit analysis.

There is a long bipartisan history of support for cost-benefit analysis for federal regulations in Washington, DC. For example, Gerald Ford was the first president to issue an executive order requiring economic analysis for major federal regulations. Since then, presidents of both parties, including Presidents Carter, Reagan, Clinton, and Obama have reaffirmed the importance of subjecting regulations to the scrutiny of economic analysis. Most US states are much further behind in this regard, but legislation like House Bill 3113 that is currently before this subcommittee would advance the use of evidence-based policy in South Carolina, making South Carolina a model for other states.

I submit the attached research as part of my written testimony. I thank you for your time and consideration and am happy to answer any questions you may have.