Regulatory Budgeting as a Solution to the Accumulation of Regulatory Errors
While the efforts of presidents past and present implicitly recognized that an ever-growing volume of regulations is undesirable, recent theoretical and empirical advances offer more specific evidence as to why. Regulatory accumulation—that is, the buildup of rules over time—has been demonstrated to distort business investment choices, deter innovation, hinder productivity growth, and slow economic growth. The degree to which regulatory accumulation can directly harm the most vulnerable—including low-income households and would-be entrepreneurs with few resources—is even more troubling.
Regulatory budgeting would lead to the creation of better information about the effects of regulations. Simultaneously, it would create incentives for regulators to act upon that information, promulgating those regulations that offer the greatest benefit relative to costs and eliminating regulations that impose an undue burden on the American people.