Three Myths about Federal Regulation

Despite evidence to the contrary, three common myths persist about federal regulations. The first myth is that many regulations concern the environment, but in fact only a small minority of regulations are environmental. By some measures, the flow of new health regulation alone since the year 2000 has far exceeded the flow of environmental regulation. The second myth is that most regulations contain quantitative estimates of costs or benefits. However, these quantitative estimates appear rarely in published rules, contradicting the impression given by executive orders and Office of Management and Budget guidance, which require cost-benefit analysis (CBA) and clearly articulate sound economic principles for conducting CBA. Environmental rules have relatively higher-quality CBAs, at least by the low standards of other federal rules. The third myth is the misperception that regulatory costs are primarily clerical, rather than opportunity or resource costs; this myth has further contributed to the understatement of regulatory costs. If technocrats have triumphed in the regulatory arena, their victory has not been earned by the merits of their analysis.