State Regulators Get a D+, on Average, Says New Report

Released today by the Institute for Policy Integrity at New York University, this new report says that not only aren’t we getting what we want from state level regulation, we don’t really know what we’re getting. The result is very costly in terms of unintended impacts on our economy. The full release, with a link to the report:

Nearly twenty percent of the American economy is regulated by state governments. But an in-depth study, released by Policy Integrity last week, raises major concerns about how regulatory decisions are made in capital cities around the nation, finding that billions of dollars and public protections are at risk. In fact, state regulatory review systems earned an average grade of a “D+” with the lowest possible grade being a “D-.”

After more than a year of research, surveys, and analysis, Policy Integrity is the first to compile the regulatory practices of all fifty states (plus DC and Puerto Rico) in one document. Comparing each set of laws and guidelines on paper to direct feedback from leaders on the ground, the report, 52 Experiments with Regulatory Review assigns states a grade based on the quality of their review process.

The report looks at fifteen points of evaluation for an ideal regulatory process. Among them: regulatory review that properly calibrates rules; review that is consistent and buffered from political influence; and review that provides a balanced treatment of costs and benefits.

Among the findings is the fact that many states are largely flying blind when it comes to evaluating their regulations. In most cases they are working with scant resources and murky guidelines. Over time, these under-analyzed rules accumulate economic and social effects and end up having a profound impact that costs the American public pounds of net benefits.

Click here to read the full report.

Maybe we would save taxpayer dollars and get better results if – gasp! – we let the feds handle regulations? But the role of the states as the laboratories of innovation has a long and noble tradition, and let’s face it, people in different parts of the country like to do things differently and have different needs. It does make sense that where federal resources or activities with interstate impacts are involved, the feds should play the central role, but taking regulatory power away from the states at this point in U.S. political history will be a hard, hard sell.

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