This week, the
Mercatus Center at George Mason University published a new paper by Jerry
Ellig, the chief economist at the FCC. The paper is titled “Why
and How Independent Agencies Should Conduct Regulatory Impact Analysis.” Earlier
this year, the FCC, an independent agency, established
the Office of Economics and Analytics, which is a step in the right direction
towards improving its economic analysis of proposed rules.
Here are some of
the steps Jerry Ellig recommends for regulators:
- Avoid “ready-fire-aim” rulemakings, in which decisions are made first, and then economists are expected to produce a cost-benefit analysis that supports those decisions.
- Ensure the independence of economists (and other analysts) and give them incentives to conduct objective analysis. For example, have economists work in a separate office or bureau, and make sure they are not supervised by the policy staff who write the regulations that the economists will evaluate.
- Establish agency-wide standards for regulatory impact analysis that outline the topics that the analysis must cover and establish expectations for quality.
- Explain how the economic analysis affected decisions about the regulation.
- Invite the Office of Information and Regulatory Affairs (OIRA) to review the regulations and the accompanying analysis, just as it does for executive branch regulations.
Improving the
quality of economic analysis at the FCC will be an important topic of
conversation at the Free State Foundation’s March 27 Telecom Policy Conference
titled “Connecting All of America: Advancing the Gigabit and 5G Future.” Neomi
Rao, Administrator at OIRA, will be giving a keynote address and likely will discuss
how regulatory impact analyses help create effective policies.
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