Regulatory Breakdown: The Crisis of Confidence in U.S. Regulation

Regulatory Breakdown: The Crisis of Confidence in U.S. Regulation

Regulatory Breakdown: The Crisis of Confidence in U.S. Regulation

Regulatory Breakdown: The Crisis of Confidence in U.S. Regulation

Synopsis

Regulatory Breakdown: The Crisis of Confidence in U.S. Regulation brings fresh insight and analytic rigor to what has become one of the most contested domains of American domestic politics. Critics from the left blame lax regulation for the housing meltdown and financial crisis--not to mention major public health disasters ranging from the Gulf Coast oil spill to the Upper Big Branch Mine explosion. At the same time, critics on the right disparage an excessively strict and costly regulatory system for hampering economic recovery. With such polarized accounts of regulation and its performance, the nation needs now more than ever the kind of dispassionate, rigorous scholarship found in this book.

With chapters written by some of the nation's foremost economists, political scientists, and legal scholars, Regulatory Breakdown brings clarity to the heated debate over regulation by dissecting the disparate causes of the current crisis as well as analyzing promising solutions to what ails the U.S. regulatory system. This volume shows policymakers, researchers, and the public why they need to question conventional wisdom about regulation--whether from the left or the right--and demonstrates the value of undertaking systematic analysis before adopting policy reforms in the wake of disaster.

Excerpt

Has the United States suffered a regulatory breakdown? The answer to this question would appear to be an obvious “yes.” Times have been especially tough over the past several years, and virtually every account of the nation’s woes places considerable blame on regulation. One might even say that criticism of regulation has become one of the rare commonalities between Democrats and Republicans—although their respective critiques differ profoundly. For those on the left, the United States never would have suffered calamities such as the financial crisis or the Gulf Coast oil spill had regulatory standards been more stringent or had regulators kept from falling asleep at the switch. For those on the political right, the country never would have suffered such deep and sustained economic problems had burdensome regulations—in particular, uncertainty over new regulations—not stifled the business risktaking needed to jumpstart economic growth. Whichever account is correct—and perhaps both have merit—U. S. regulation clearly suffers a deep crisis of confidence. Government has become less trusted and politics more polarized, with debates over regulatory policy readily devolving into highly charged ideological disputes.

In such a heated political climate, academic research on regulation can make a valuable contribution. If policymakers hope to fix what ails the U.S. system of regulation, they need to do more than just act on hunches or respond to hasty conclusions. They need to understand problems as fully as possible and discover the causes that underlie those problems. Regulatory failures, after all, can arise for a variety of reasons, with triggering factors occurring at one or more stages of the regulatory process. Failures may occur because problematic activities or behaviors have remained unregulated when they should have been regulated. Or they may occur because relevant activity was regulated but with the wrong kind of rules. The process of creating the rules might well have broken down through ignorance, ideology, delay, or corruption. Another possibility is that the rules and the processes that generated . . .

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