Deskbook on Regulatory Design

2. Develop a Deskbook on Regulatory Design. (1)

The Chair of the Regulatory Coordinating Group (RCG) should oversee the
development of a "Deskbook on Regulatory Design" for legislative and
regulatory staffs, which should be completed in less than one year. The
"Deskbook" would improve understanding of the full range of alternative
approaches by providing both policymakers and staff with ready
information about the range of regulatory approaches. It would also
identify resource people within agencies who could assist others in
development of innovative approaches. Project staff should work closely
with congressional regulatory specialists in developing the Deskbook.

The Deskbook should describe in detail the conditions under which each
approach should be considered.  Possible combinations of approaches
should also be discussed. In this context, the Deskbook should highlight
the strengths, weaknesses, and limitations of each approach.
Market-oriented approaches, though they may be more economically
efficient, can be difficult to design and are not appropriate in all
circumstances.[Endnote 23] In drafting the "Deskbook", the RCG should
consult on existing sources, such as the handbooks prepared by the
Regulatory Council in the 1970s and the experience of Germany and other
European countries.[Endnote 24]

The Deskbook should also provide an in-depth survey of how innovative
approaches have been used in both federal and state governments. Case
studies should be used for each approach. Case studies should look at
not only the design of the regulation, but also the effectiveness of
implementation.[Endnote 25]

Attention should also be paid to other innovative features, including
tiering, or tailoring regulatory requirements to match circumstances of
the regulated entities. Agencies may, for example, use cut-offs (e.g.,
number of employees) in applying certain regulatory requirements or may
make appropriate provisions for small businesses (e.g., short forms for
reporting requirements).

The Deskbook should be designed in a format to accommodate new
information, so that it can be regularly updated. In addition to printed
versions, the Deskbook should be made available in electronic format to
maximize its usefulness. An electronic format could be updated more
frequently and could provide more extensive information, such as actual
texts of regulations, as well as additional commentary on the
development and monitoring of such regulations.

Endnotes

23. The impact of market-oriented approaches is sometimes more difficult
to predict. For example, nationwide trading systems for pollution can
result in heavier pollution emissions in some locations than would have
occurred under a command-and-control approach. For example, a nationwide
marketable permit system generally would not be appropriate for solving
a local pollution problem.

24. See note 22. Also for foreign experience see Organization for
Economic Co-Operation and Development (OECD), Economic Instruments for
Environmental Protection (Paris, 1989).

25. The effectiveness of traditional command-and- control regulation
depends heavily on enforcement efforts. The Deskbook should examine
effectiveness of regulation not only from the perspective of regulatory
design, but also from the enforcement perspective. It should discuss
innovative approaches to enforcement, including the use of private
audits.