by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor | John Locke Foundation
This morning the General Assembly’s Joint Legislative Administrative Procedure Oversight Committee, where my colleague Becki Gray and I spoke about a state REINS Act, also heard a report on the progress of the periodic review and examination of existing rules from Molly Masich and Abigail Hammond at the Office of Administrative Hearings.
The update was very encouraging. Here are some numbers:
This reform, hailing from the Regulatory Reform Act of 2013, is one of particular interest to me and my colleagues at the John Locke Foundation. While the reform was still under debate, I wrote about it in my newsletter and followed with a Spotlight report. I pointed out academic research that sunset provisions with periodic review tended to reduce the overall level of red tape, freeing up citizens and industry to be more productive, which would boost the state’s economy.
In August 2013 I wrote of the importance of North Carolina’s regulatory reforms, including the new sunset with periodic review, in the Washington Examiner in a piece entitled “Insuring regular regulatory relief is as vital to economic growth as tax cuts.” A snippet:
This was another example of applying sound empirical research to the legislative process. In 2012, the Mercatus Center at George Mason University published a study of state regulatory policies. The only rules-review process shown to have a “robustly statistically significant” effect in reducing a state’s regulatory burden was periodic review and sunset of existing regulations. The effect was large enough that states could expect economic benefits from adopting it.
Both in state capitals and in Washington, the topic of regulatory reform isn’t as politically sexy as tax reform. But it is absolutely critical to rejuvenating our stalled economic recovery. It allows businesses and entrepreneurs more time to spend on productive activities, removes impediments to business openings and expansions, and creates a welcoming climate for more jobs and investment.
Nationally, regulations are expanding at an alarming rate. Leaders in Washington would be wise to follow North Carolina’s example in reining in overregulation. Regulatory reform based on sound research is every bit as vital as tax reform to boosting the economy.
Early results from the OAH show that this reform is working. Over one-tenth of the rules reviewed so far are now slated to be removed. Another one-third must return to the rule adoption process as if new. Just over half the rules reviewed so far were retained without change.
This result is important given that the bulk of economic literature has shown regulation’s harmful effects on the economy. Cutting red tape and clearing out overregulation would therefore have beneficial effects for economic growth.