Outdated U.S. Regulatory System Needs Overhaul, According to New CFR Report

The number of U.S. regulations—which affect nearly every aspect of Americans’ lives, from the food and medicine they consume to the quality of the air they breathe and how they save for retirement—has consistently been on the rise. As a result, U.S. businesses are increasingly burdened, but not competitively disadvantaged, because their peers in other advanced countries tend to face even more regulations, according to a new progress report and scorecard from the Council on Foreign Relations’ Renewing America initiative.

March 4, 2015

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The number of U.S. regulations—which affect nearly every aspect of Americans’ lives, from the food and medicine they consume to the quality of the air they breathe and how they save for retirement—has consistently been on the rise. As a result, U.S. businesses are increasingly burdened, but not competitively disadvantaged, because their peers in other advanced countries tend to face even more regulations, according to a new progress report and scorecard from the Council on Foreign Relations’ Renewing America initiative.

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The World Bank consistently ranks the United States as the easiest place to do business among large developed countries. However, the U.S. government could reduce its regulatory burden even further and help its businesses by regularly reviewing and eliminating outdated or ineffective regulations.

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"The system has changed little since the early 1980s and focuses almost exclusively on cost-benefit analysis before regulations are put into place, instead of in hindsight when it is clearer whether a regulation is working," Renewing America Associate Director Rebecca Strauss writes in the report. "As a result, the stock of older regulations accumulates without a good institutionalized process for determining which regulations should be repealed or changed."

In the 1980s, the rest of the world looked to the United States for cutting-edge policies in regulatory management. But since then, others, including Australia, Canada, and the United Kingdom, have taken the lead, implementing systems with regulatory budgets, automatic reviews, and an improved filter for new regulations in order to better manage existing rules. The United Kingdom, for example, uses a regulatory budget or ’one-in, two-out’ policy, in which two regulations must be eliminated when a new one is added.

Read the Renewing America report and scorecard at cfr.org/qualitycontrol. Read more about U.S. regulatory policy in Strauss’s op-ed on Quartz.

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This is the seventh progress report and scorecard from CFR’s Renewing America initiative. Previous reports and scorecards have evaluated federal worker retraining policy, U.S. debt, transportation infrastructure, federal education policy, trade, and corporate tax.

This scorecard is part of CFR’s Renewing America initiative, which generates innovative policy recommendations on revitalizing the U.S. economy and replenishing the sources of American power abroad. Scorecards provide analysis and infographics assessing policy developments and U.S. performance in such areas as infrastructure, education, international trade, and government deficits. The initiative is supported in part by a generous grant from the Bernard and Irene Schwartz Foundation.

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