David versus Godzilla: Bigger Stones

For four decades, U.S. Presidents have issued executive orders requiring agencies to conduct comprehensive regulatory impact analysis (RIA) for significant regulations to ensure that regulatory decisions solve social problems in a cost-beneficial manner. Yet experience demonstrates that agency RIAs often fail to live up to the standards enunciated in executive orders and Office of Management and Budget (OMB) guidance. The Office of Information and Regulatory Affairs (OIRA) oversees agency compliance with the executive orders, but OIRA is about half the size it was when it was established in 1980. Regulatory agency staff outnumber OIRA staff by a ratio of 3600 to 1.

We suggest four managerial changes that could increase OIRA’s leverage: (1) Define what counts as success when an agency adopts a regulation and link this to the agency’s strategic goals, (2) Use budget recommendations to enforce analytical requirements and achievement of agencies’ Government Performance and Results Act (GPRA) objectives, (3) Combine regulatory budgets with agency budgets, and (4) Reward results, not activity.