Forty Years on the Regulatory Commons

President Obama’s Executive Order 13563 is the latest presidential effort to exert control over the federal government’s regulatory Leviathan. The new order contains some noteworthy innovations, but at heart it is little different from President Richard Nixon’s October 1971 order that established in the Office of Management and Budget a Quality of Life review, nor does it differ much from the many “regulatory reform” orders that have been issued since then. In spite of the complex administrative machinery described in the Obama order, it does not address the perverse incentives for regulators and the regulated that have emerged over the past four decades of regulatory capitalism. For both parties, there is now much to gain through the regulatory process - and those gains are often easier to achieve than gains from market competition.