Coproduction of regulations under the administrative procedure act

How close is the US to a classical Liberal regulatory system?

Originally published in The Review of Austrian Economics

Aligica et al. (2019) posit that a form of public administration founded in the classical liberal tradition should recognize value heterogeneity, which would create a need for coproduction of rules and polycentricity in the production of rules. Utilizing a dataset of 130 economically significant executive branch regulations proposed between 2008 and 2013, this paper assesses whether US regulators act in a manner consistent with the predictions of their theory. US federal agencies use several methods that could facilitate coproduction of rules by stakeholders. Statistical analysis finds that agencies are more likely to employ some stakeholder participation strategies for the types of regulations that may involve more heterogeneous values. However, there is scant evidence that the stakeholder participation strategies that agencies employ more extensively when values are more heterogeneous are associated with consideration of a wider variety of alternatives. There is no evidence that agencies consider a wider scope of alternatives for regulations that may involve more heterogeneous values. Therefore, value heterogeneity and stakeholder participation have not by themselves been sufficient to move the US toward a polycentric regulatory system.

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