Regulatory Policy: The real-world impact of a long-term research effort
Rather than focusing on immediate policy problems, the Tobin Project aims to generate cutting-edge research that will expand available knowledge for tackling major challenges both now and in years to come. In 2007, at a time when economic regulation was not a focus of public debate, the Tobin Project launched a research effort to better understand how regulation might serve the public good. Critical policy decisions, especially following the financial crisis of 2007-2009, have been informed by this work. In 2010, Tobin-seeded research contributed to key elements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and in 2011, Tobin Project research helped shape both the Administration’s approach to regulatory review and its response to the oil spill crisis, detailed below.
February 2008: Professors Michael Greenstone (MIT, Economics) and Ed Balleisen (Duke University, History) write academic papers for the Tobin Project’s 2008 Government & Markets conference, offering ways to improve regulation.
Michael Greenstone (MIT, Economics) and Ed Balleisen (Duke University, History) write academic papers for the Tobin Project’s 2008 Government & Markets conference. Professor Greenstone argues that even popular regulatory policies must be tested retrospectively to ensure that the benefits outweigh the costs. Professor Balleisen draws lessons from history to examine how co-regulation involving both industry and government oversight can be effective. The Tobin Project encourages revision and editing for publication in an edited academic volume: Government & Markets: Toward a New Theory of Regulation (Cambridge University Press, 2010).
December 2008: The Tobin Project convenes a group of leading scholars, including Professors Greenstone and Balleisen, to contribute to a compendium for policymakers, New Perspectives on Regulation (Tobin Project, 2009).
The Tobin Project convenes a group of leading scholars, including Professors Greenstone and Balleisen, to contribute to a compendium for policymakers, entitled New Perspectives on Regulation (Tobin Project, 2009). Authors are encouraged to think in new ways about how to make their scholarship accessible to policymakers and the public.
“Without the Tobin Project, I probably never would have [thought] about ways to improve the regulatory process. The Tobin Project was very successful at pushing me to think about how to take my academic ideas and translate them to a form that could be potentially useful in Washington."
- Michael Greenstone
January 2009: Professors Greenstone and Balleisen complete chapters for the New Perspectives on Regulation volume.
Working with the Tobin Project, Professor Greenstone completes his chapter for New Perspectives on Regulation, arguing that a “look back” requirement is essential to ensure that regulatory programs with a net benefit to society are expanded while those without are repealed or reformed. Professor Balleisen co-authors a chapter with Marc Eisner (Wesleyan University, Government), offering a framework for co-regulation where industry self-regulation can be productive with vigorous public oversight.
Summer/Fall 2009: The Tobin Project publishes New Perspectives on Regulation, circulating the volume in both academic and policy communities, including members of Congress and an expansive on-line audience.
The Tobin Project publishes New Perspectives on Regulation, circulating the volume in both academic and policy communities. The Tobin Project arranges a dinner in Washington, D.C. for select authors from the New Perspectives on Regulation volume to discuss their research with several dozen members of Congress. Both Professors Greenstone and Balleisen present their work. In its first four months of distribution, the volume was distributed to over 2,000 readers.
Spring 2009/Winter 2010: As Chief Economist to the Council of Economic Advisors, Michael Greenstone emphasizes the conclusion of his research, included in New Perspectives on Regulation.
As Chief Economist to the Council of Economic Advisors (he returned to academia in February 2010), Michael Greenstone emphasizes the conclusion of his Tobin-supported research: “Our goal should be to rigorously evaluate every regulation in order to expand upon the ones that work and weed out the ones that fail to improve our well-being (or worse, harm it).”
November 2010: The Tobin Project shares Professor Balleisen’s research with the President’s National Commission on the BP Deepwater Horizon Oil Spill.
The Tobin Project shares Professor Balleisen’s research with the National Commission on the BP Deepwater Horizon Oil Spill and arranges conversations to discuss how strategies of industry self-governance might be part of a comprehensive regulatory response. “Structured properly and complemented by the right kind of public oversight,” Balleisen observes, “such initiatives can help to redirect social norms within an industry, improving regulatory outcomes.”
January 2011: The Commission issues its “Report to the President” directly citing Professor Balleisen and Eisner’s research.
The Commission issues its “Report to the President,” directly citing Professors Balleisen and Eisner’s research, and more broadly adopting significant elements of the framework they presented in New Perspectives on Regulation for linking public and private regulatory efforts.
“Working with the Tobin Project encouraged me to move beyond the confines of my own discipline … help[ing] me to develop a perspective that has now informed policy recommendations about how to respond to America’s most damaging oil spill.”
- Ed Balleisen
January 2011: President Obama signs Executive Order 13563: Improving Regulation and Regulatory Review, drawing on Professor Greenstone’s research.
Drawing on Professor Greenstone’s research, President Obama signs an Executive Order requiring all executive agencies to “promote retrospective analysis of rules” and to “modify, streamline, expand, or repeal them in accordance with what has been learned.”
April and June 2011: Cass Sunstein, Administrator of the Office of Information and Regulatory Affairs (OIRA), sends out two memoranda for the heads of executive departments and agencies, directly citing Professor Greenstone’s New Perspectives on Regulation chapter.
Cass Sunstein, Administrator of OIRA, issues two memoranda for the heads of executive departments, directly citing Professor Greenstone’s New Perspectives on Regulation chapter. The memoranda offer guidance on how to implement the President’s Executive Order, which calls for retrospective analysis of existing significant regulations.
August 2011: The White House releases final regulatory reform plans, created by agencies in response to Executive Order 13563. As a result of the retrospective analysis of rules, agencies are able to reduce costs and improve the efficiency of their systems.
In response to President Obama’s Executive Order, agencies and departments review their systems, identifying areas for improvement and submitting final regulatory reform plans to the White House. The reforms explicitly incorporate plans to repeat the process of regulatory lookback in the future. Of the review process, President Obama says: “[The Government-wide review of rules now on the books] was recently completed, producing reform plans from 26 agencies. A mere fraction of the initiatives described in the plans will save more than $10 billion over the next 5 years; as progress continues, we expect to be able to deliver savings far in excess of that figure.”