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James Broughel

James Broughel



Articles by James Broughel

Recommendations for Improving Department of Energy Regulatory Impact Analysis for Energy Conservation Standards

22 days ago

The US Department of Energy (DOE) is proposing supplemental amendments to its decision-making process for selecting energy conservation standards. Specifically, the DOE is proposing changes that would require the agency to conduct an analysis of the costs and benefits of various alternative levels of an energy conservation standard in order to gauge whether a chosen standard is economically justified. This comment seeks to provide some broad guidance to the DOE on how costs and benefits of energy conservation standards should be evaluated.
My recommendations include (1) better specifying what model of consumer behavior the DOE is relying on, (2) distinguishing between individual and social discount rates in analysis, (3) better accounting for the opportunity cost of capital, (4)

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Cost-Benefit Analysis as a Failure to Learn from the Past

March 6, 2020

This short note argues that cost-benefit analysis (CBA), a tool employed by professional economists to evaluate the welfare consequences of public policies, embodies a variety of failures to heed the warnings of famous classical liberal economists. CBA attributes characteristics of individuals to society, fails to adequately account for the “unseen” consequences of policy, wipes out the future with a social discount rate as if “in the long run we are all dead,” and is an example of how the pursuit of mathematical logic can lead to failures of common sense. As a result of these problems, CBA offers a useful teaching device for students, demonstrating how even modern-day economists at the top of their profession continue to make basic errors pointed out by economists generations ago. CBA in

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The Mighty Waves of Regulatory Reform: Regulatory Budgets and the Future of Cost-Benefit Analysis

March 6, 2020

In the past 70 or 80 years, there have been three “waves” of reforms to the process of creating and managing U.S. federal and state regulations. The first wave began in 1946 with the passage of the federal Administrative Procedure Act, after which states went on to pass and formalize their own administrative procedures. The second wave began decades later in the mid-1970s, ushering in the era of cost-benefit analysis reforms for regulations. This article focuses on the third wave of regulatory reforms that appears to be sweeping the nation and includes a prediction that the next wave may include a return to some unsettled issues from the past.

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Accounting for the Opportunity Cost of Capital in Cost-Benefit Analysis

February 21, 2020

This comment presents a framework for how the Office of Management and Budget (OMB) should be thinking about the opportunity cost of capital in cost-benefit analysis (CBA). The comment begins by explaining why improvements in CBA are needed at federal agencies. Next, it discusses how to account for displaced investment in CBA using the shadow price of capital (SPC) method, which is technically the appropriate way to account for the opportunity cost of capital in CBA. It then explains why the Executive Order (EO) 13771 accounting statements, where only financial impacts are considered, are a potential improvement over analysis generally produced under EO 12866. Finally, it make several recommendations for improving the EO 13771 accounting statements.
The Shadow Price of Investment
A common

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Prompting a Regulatory Reset in Arizona

February 10, 2020

Chair Farnsworth, Vice Chairman Borrelli, and members of the committee:
Thank you for the opportunity to submit this testimony. My name is James Broughel, and I am a senior research fellow at the Mercatus Center at George Mason University and an adjunct professor at the Antonin Scalia Law School. My research focuses on state regulatory institutions, economic growth, and the economic analysis of regulations.
My testimony today centers around Senate Bill 1211 (SB1211), which is currently being considered by this committee. Specifically, I have three main points to convey:
The accumulation of unnecessary regulations can slow down economic growth and can weaken the effectiveness of regulations that are justified to protect health, safety, and the environment.
Despite real progress in recent

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Nebraska Could Be a Leader in Regulatory Reporting

January 31, 2020

Chairman Brewer and members of the committee:
Thank you for the opportunity to submit this written testimony. My name is James Broughel, and I am a senior research fellow at the Mercatus Center at George Mason University and an adjunct professor at the Antonin Scalia Law School. My research focuses on state regulatory institutions, economic growth, and the economic analysis of regulations.
My testimony today centers around Legislative Bill 857 (LB857), which is currently being considered by this committee. Specifically, I have two main points to convey:
Nebraska is taking important steps toward ensuring regular review of regulations, but further reforms will be needed in order to guarantee that reviews are substantive.
Moving timelines up, extending reviews to all existing regulations, and

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The DOE Should Clarify Model Uncertainty and Strengthen Cost and Benefit Comparisons in Its Analyses

November 20, 2019

The National Academies of Sciences, Engineering, and Medicine have organized a committee to peer-review the analytical methods used by the US Department of Energy (DOE) in setting “standards regulations” for the performance of buildings and associated equipment and products. This short comment makes recommendations to the committee about ways in which DOE technical support documents (TSDs) can be improved.
By way of background, I am a senior research fellow at the Mercatus Center at George Mason University, as well as an adjunct professor at Antonin Scalia Law School. Relevant to this committee, I am also a special government employee serving on the Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC) for the DOE, and I recently served as the consumer representative on a

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Cutting Red Tape in Nebraska

October 25, 2019

Chairman Brewer and members of the committee:
Good morning. Thank you for granting me the opportunity to speak today. My name is James Broughel, and I am a senior research fellow at the Mercatus Center at George Mason University in Arlington, Virginia, and an adjunct professor at the Antonin Scalia Law School at George Mason University. My research focuses on state regulatory institutions, economic growth, and the economic analysis of regulations.
I will be touching on three topics today:
Regulation is necessary in some cases. It can be justified to protect health, safety, and the environment. The accumulation of regulation, however, has a real cost, which needs to be kept in mind.
How much regulation is there? The Mercatus Center is involved in an effort to quantify regulation across the

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States’ Use of Data Shines a Light on the Administrative State

October 23, 2019

This week, the White House announced a new Governors’ Initiative on Regulatory Innovation. Led by Vice President Mike Pence, the aim of the initiative is to work with state, local, and tribal leaders to advance regulatory reform, and in particular occupational licensing reform, in the states and around the country.
For three years, the Mercatus Center has been compiling data on state-level regulation. This effort has culminated in the release of a new dataset, called State RegData, which quantifies regulation across the US states. Until recently, economists have not had good ways to assess how much regulation states have, either on their own or relative to one another. By extension, policymakers have not had a clear idea how much regulation their states have or how burdensome their

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Fuel Efficiency Chaos Highlights Importance of Checks and Balances

August 30, 2019

It’s been one crazy summer for fuel efficiency. As the Trump administration has moved to finalize its new fuel economy standards—rules that roll back those set by the Obama administration—several key automakers have responded by cutting a deal with the state of California to reduce emissions beyond what the new federal regulations would require.
This maneuver could effectively circumvent whatever new rules come from Washington, setting the stage for an epic battle between the White House and California. More importantly, the episode demonstrates how the checks and balances built into our regulatory system are quietly eroding at every turn.
Over the last seventy years or so, two major checks have been added to the federal regulatory system to protect Americans from overzealous regulators.

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OIRA Should Stop Calling a Tail a Leg

August 26, 2019

I recently came across this amusing tweet from a Thomas Sowell fan account. I will quote it here in full:
"Abraham Lincoln once asked an audience how many legs a dog has if you count the tail as a leg. When they answered ‘five,’ Lincoln told them that the answer was four. The fact that you called the tail a leg did not make it a leg."
It sounds funny, but this pithy aphorism perfectly captures a common problem associated with regulatory analysis: namely, that it overlooks the opportunity cost of capital.
How can this obscure policy issue possibly be related to Lincoln’s insight?
If you ask federal regulators, they will probably tell you that their economic analysis does account for the opportunity cost of capital—or how invested resources would evolve through time with or without a

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Government Regulation on Autopilot

July 17, 2019

Chairman Paul, Ranking Member Hassan, and members of the committee:
Thank you for allowing me to offer testimony this afternoon on the cost of federal regulations as it pertains to the federal government and to taxpayers. My name is James Broughel, and I am a senior research fellow at the Mercatus Center at George Mason University, as well as an adjunct professor of law and economics at George Mason University. My research focuses on state and federal regulatory institutions, economic growth, and the economic analysis of regulations.
My message today is simple:
Much of what constitutes federal policy is on autopilot. By this I mean, many government programs, including the amount of money spent on them, operate largely outside the annual appropriations process and by extension the active

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A Snapshot of Georgia Regulation in 2019

July 9, 2019

It would take an ordinary person almost three years to read the entire US Code of Federal Regulations(CFR), which contained nearly 104 million words in 2017. The sheer size of the CFR poses a problem not just for the individuals and businesses that want to stay in compliance with the law but also for anyone interested in understanding the consequences of this massive system of rules. States also have sizable regulatory codes, which add an additional layer to the large body of federal regulation. A prime example is the online version of the 2019 Rules and Regulations of the State of Georgia(RRSG).
Researchers at the Mercatus Center at George Mason University developed State RegData, a platform for analyzing and quantifying state regulatory text. State RegData captures information in minutes

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A Snapshot of California Regulation in 2019

July 3, 2019

It would take an ordinary person almost three years to read the entire US Code of Federal Regulations(CFR), which contained nearly 104 million words in 2017. The sheer size of the CFR poses a problem not just for the individuals and businesses that want to stay in compliance with the law but also for anyone interested in understanding the consequences of this massive system of rules. States also have sizable regulatory codes, which add an additional layer to the large body of federal regulation. A prime example is the online version of the 2019 California Code of Regulations(CCR).
Researchers at the Mercatus Center at George Mason University developed State RegData, a platform for analyzing and quantifying state regulatory text. State RegData captures information in minutes that would take

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The Mighty Waves of Regulatory Reform: Regulatory Budgets and the Future of Cost-Benefit Analysis

July 1, 2019

In the past 70 or 80 years, there have been what might be called three “waves” of reforms to the process of creating and managing US federal regulations. The first wave began in 1946 with the passage of the federal Administrative Procedure Act, after which states went on to pass and formalize their own administrative procedures. The second wave began decades later in the mid-1970s, ushering in the era of cost-benefit analysis (CBA) reforms for regulations. This article focuses on the third wave of regulatory reforms that appears to be sweeping the nation currently and includes a prediction as to what the next wave might look like, which turns out to be a return to some unsettled issues from the past. The current wave consists of efforts to manage regulatory output under budget or inventory

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Restoring Economic Opportunity in Ohio through Meaningful Regulatory Reform

June 27, 2019

As the Ohio General Assembly considers legislation aimed at reducing the growing burden of state regulations, it would do well to consider how regulations contribute to economic disparities in the state. Regulatory reform is a smart way to make Ohio more competitive, boost productivity in the state, and ultimately raise living standards, but it is also likely to reduce economic inequality and raise the incomes of the very poorest state residents. Ohio, like many other states, is struggling with sluggish growth in real income in recent decades; at the same time, inequality has been rising. It seems likely that regulation is contributing to both of these issues, given the empirical connection between regulation, inequality, and productivity, and because Ohio has so much more regulation than

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Tracking the Progress of Kentucky’s Red Tape Reduction Initiative

June 26, 2019

In July of 2016, seven months after taking office, Governor Matt Bevin kicked off the Kentucky Red Tape Reduction Initiative, an effort to reduce the burdens of state regulations.[1]Notably, as part of the effort, Bevin pledged to reduce regulations in the state by 30 percent.[2]Given that the effort has been underway for some time now, it makes sense to take stock of how things have gone. Therefore, this policy brief explores how the regulatory reform effort has fared thus far.
Information about the Kentucky Red Tape Reduction Initiative can be found at redtapereduction.com, which lists regulations repealed or amended by the administration.[3]According to the site, of more than 4,700 Kentucky regulations initially on the books, 617 have been repealed and 661 have been amended as of May

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A Snapshot of Delaware Regulation in 2019

June 25, 2019

It would take an ordinary person almost three years to read the entire US Code of Federal Regulations(CFR), which contained nearly 104 million words in 2017.[1]The sheer size of the CFR poses a problem not just for the individuals and businesses that want to stay in compliance with the law but also for anyone interested in understanding the consequences of this massive system of rules. States also have sizable regulatory codes, which add an additional layer to the large body of federal regulation. A prime example is the online version of the 2019 Delaware Administrative Code(DAC).[2]
Researchers at the Mercatus Center at George Mason University developed State RegData, a platform for analyzing and quantifying state regulatory text.[3]State RegData captures information in minutes that would

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A Snapshot of Alaska Regulation in 2019

June 19, 2019

It would take an ordinary person almost three years to read the entire US Code of Federal Regulations (CFR), which contained nearly 104 million words in 2017. The sheer size of the CFR poses a problem not just for the individuals and businesses that want to stay in compliance with the law but also for anyone interested in understanding the consequences of this massive system of rules. States also have sizable regulatory codes, which add an additional layer to the large body of federal regulation. A prime example is the online version of the 2019 Alaska Administrative Code (AAC).
Researchers at the Mercatus Center at George Mason University developed State RegData, a platform for analyzing and quantifying state regulatory text. State RegData captures information in minutes that would take

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A Snapshot of Montana Regulation in 2019

May 2, 2019

It would take an ordinary person almost three years to read the entire US Code of Federal Regulations (CFR), which contained nearly 104 million words in 2017. The sheer size of the CFR poses a problem not just for the individuals and businesses that want to stay in compliance with the law but also for anyone interested in understanding the consequences of this massive system of rules. States also have sizable regulatory codes, which add an additional layer to the large body of federal regulation. A prime example is the online version of the 2019 Administrative Rules of Montana (ARM).
Researchers at the Mercatus Center at George Mason University developed State RegData, a platform for analyzing and quantifying state regulatory text. State RegData captures information in minutes that would

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Cutting Red Tape in Kansas

May 2, 2019

Chairwoman Tyson, Chairman Highland, and members of the committees:
Thank you for allowing me to present this testimony today with regard to the regulatory environment in Kansas. My name is James Broughel, and I am a senior research fellow at the Mercatus Center at George Mason University, as well as an adjunct professor of law and economics at George Mason University. My research focuses on state regulatory institutions, economic growth, and the economic analysis of regulations.
My message today can be summarized in three points:
Kansas has a significant amount of regulation on its books in absolute terms, but has a relatively light regulatory burden when compared to other US states.
Nonetheless, the accumulation of unnecessary regulations can be a drag on economic growth and prosperity

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A Snapshot of Washington State Regulation in 2019

April 30, 2019

It would take an ordinary person more than two and a half years to read the entire US Code of Federal Regulations (CFR), which contained nearly 104 million words in 2017. The sheer size of the CFR poses a problem not just for the individuals and businesses that want to stay in compliance with the law but also for anyone interested in understanding the consequences of this massive system of rules. States also have sizable regulatory codes, which add an additional layer to the large body of federal regulation. A prime example is the online version of the 2019 Washington Administrative Code (WAC).
Researchers at the Mercatus Center at George Mason University developed State RegData, a platform for analyzing and quantifying state regulatory text. State RegData captures information in minutes

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A Snapshot of Alabama Regulation in 2019

April 9, 2019

It would take an ordinary person more than two and a half years to read the entire US Code of Federal Regulations (CFR), which contained nearly 104 million words in 2017. The sheer size of the CFR poses a problem not just for the individuals and businesses that want to stay in compliance with the law but also for anyone interested in understanding the consequences of this massive system of rules. States also have sizable regulatory codes, which add an additional layer to the large body of federal regulation. A prime example is the online version of the 2019 Alabama Administrative Code (AAC).
Researchers at the Mercatus Center at George Mason University developed State RegData, a platform for analyzing and quantifying state regulatory text. State RegData captures information in minutes that

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A Snapshot of Louisiana Regulation in 2019

March 28, 2019

It would take an ordinary person more than two and a half years to read the entire US Code of Federal Regulations (CFR), which contained nearly 104 million words in 2017. The sheer size of the CFR poses a problem not just for the individuals and businesses that want to stay in compliance with the law but also for anyone interested in understanding the consequences of this massive system of rules. States also have sizable regulatory codes, which add an additional layer to the large body of federal regulation. A prime example is the online version of the 2019 Louisiana Administrative Code (LAC).
Researchers at the Mercatus Center at George Mason University developed State RegData, a platform for analyzing and quantifying state regulatory text. State RegData captures information in minutes

Read More »

A Snapshot of Oklahoma Regulation in 2019

March 21, 2019

It would take an ordinary person more than two and a half years to read the entire US Code of Federal Regulations (CFR), which contained nearly 104 million words in 2017. The sheer size of the CFR poses a problem not just for the individuals and businesses that want to stay in compliance with the law but also for anyone interested in understanding the consequences of this massive system of rules. States also have sizable regulatory codes, which add an additional layer to the large body of federal regulation. A prime example is the online version of the 2019 Oklahoma Administrative Code (OAC).
Researchers at the Mercatus Center at George Mason University developed State RegData, a platform for analyzing and quantifying state regulatory text. State RegData captures information in minutes

Read More »