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In 2021, the Occupational Safety and Health Administration (OSHA) issued two emergency temporary standard regulations related to COVID-19 hazards in US workplaces. One regulation covered healthcare sector workers, while the second regulation would have covered workers at firms with 100 or more employees. This paper conducts an original mortality risk analysis for these regulations. Mortality risk analysis evaluates the increase or decrease in expected mortality associated with a new policy, such as a rule or regulation, taking into account economic factors like lost income due to regulatory costs. If we accept OSHA’s cost and health benefit estimates at face value, we find that the first regulation related to COVID-19 hazards in the healthcare sector reduces risk initially but increases risk over a longer time horizon. We find that the second regulation would reduce risk according to OSHA’s main estimates but may not reduce risk after including some ancillary costs and adjusting the agency’s prevented hospitalizations estimate based on more reasonable assumptions. Moreover, OSHA’s economic analysis for the two regulations in question does not purport to comprehensively evaluate costs; ergo, our mortality risk estimates probably underestimate countervailing mortality risks stemming from these regulations. We review some of OSHA’s underlying assumptions that could change the outcomes of our mortality analysis. These estimates demonstrate that OSHA would benefit from more comprehensive consideration of costs in its economic analysis.

Sovereign wealth funds have gained popularity amongst both national and subnational governments. These funds have a useful role even in those countries lacking abundant natural resources, as they can address several significant failures of both private markets and governments. First, well‐structured funds may be able to address chronic under‐saving in the marketplace. Second, they can overcome certain imperfect knowledge and incentive problems found in government. The current record of accomplishment of sovereign wealth funds shows that they are capable of producing strong returns, comparable to those in the private sector. However, these funds pose potential problems that should be analysed and considered.

The U.S. has entered a new age of supply chain challenges, and while many of these challenges were unpredictable consequences of the COVID-19 pandemic, there are also some predictable shortages, including those that arise in the modern prescription drug market. In an effort to combat these foreseeable events, compounding pharmacies, or compounders, have the wherewithal to step in and address drug shortages when they occur. Whether they are able to assist, however, ultimately hinges not on their capabilities, but on whether they are allowed to assist under federal law.

This paper updates the mortality cost of expenditures, which has relevance to a broad range of policies, including regulations, wars, and COVID-19 restrictions. Because changes in income lead to changes in mortality risk, health investments costing more per life saved than a threshold cost-per-life-saved cutoff level are expected to increase mortality risk. This article discusses the mechanisms driving this relationship and provides recent empirical support. The 2019 cost-per-life-saved cutoff level at which expenditures increase mortality risk has a lower bound of $83.1 million and an upper bound of $133.8 million, with a midpoint of $108.5 million. (JEL D61, I18, J17, K32).

The conventional wisdom has it that US Democrats and those on the American left support incremental steps in the direction of socialism, if not an all-out endorsement of the concept. However, in at least one area—regulation—Republicans and the American political right have also, albeit unwittingly, spread the seeds of socialism not just in Washington, DC, but all across the world. This article reviews the history of federal regulation in the United States, and in particular the arcane, technical history of cost-benefit analysis (CBA), a tool that has become increasingly central in battles over regulation between the Left and the Right. Although right-wing political operatives latched on to CBA in the late 1970s and early 1980s, the tool has a long, complicated history, aspects of which could even be called socialist in nature.

Previous research speculates that some regulations are counterproductive in the sense that they increase (rather than decrease) mortality risk. However, few empirical studies have measured the extent to which this phenomenon holds across the regulatory system as a whole. Using a novel U.S. state panel data set spanning the period 2000-2014, we estimate the effect of U.S. federal regulation on state-level mortality. We find that a 1% increase in federal regulation of state economies is associated with an increase in an index of state mortality of between 0.53% and 1.35%. These findings are robust to the form of mortality measure, choice of covariates, and the inclusion/exclusion of various regions, states, and industries. We also provide an update of the "cost-per-life saved cutoff," which is the counterproductive risk threshold for expenditures. We find that expenditures in excess of $38.6 million (2019 dollars) per life saved can be expected to increase mortality risk. This article fills an important gap in the empirical literature and boosts the credibility of mortality risk analysis, whereby public policymakers weigh both the expected lives saved and lost due to a proposed regulation or other policy.

The COVID-19 pandemic has drawn attention to the regulatory framework that governs the US healthcare system, and in particular to regulations affecting healthcare workers. This paper focuses on one type of occupational regulation imposed in the pharmacy setting, known as ratio requirements. Many states limit the number of pharmacy technicians permitted to work under the supervision of a licensed pharmacist. The paper provides a background on pharmacy technicians, who assist pharmacists in a variety of roles, and also reviews the current landscape of ratio regulations that exists across the various states. A number of states have changed ratio requirements in recent years, including during the COVID-19 pandemic, and some of these cases are discussed. The paper concludes that the current trend seems to be toward relaxing ratio requirements on pharmacy technicians. All told, the evidence seems to suggest that pharmacists and pharmacy technicians are both capable of performing more tasks, and that increasing their responsibilities could be an important way to advance public health in the years ahead.

This paper estimates the benefits and costs of state suppression policies to “bend the curve” during the initial outbreak of COVID-19 in the United States. We employ an approach that values benefits and costs in terms of additions or subtractions to total production. Relative to a baseline in which only the infected and at-risk populations mitigate the spread of coronavirus, we estimate that total benefits of suppression policies to economic output are between $632.5 billion and $765.0 billion from early March 2020 to August 1, 2020. Relative to private mitigation, output lost due to suppression policies is estimated to be between $214.2 billion and $331.5 billion. The cost estimate is based on the duration of nonessential business closures and stay-at-home orders, which were enforced between 42 and 65 days. Our results indicate that the net benefits of suppression policies to slow the spread of COVID-19 are positive and may be substantial. We discuss uncertainty surrounding several parameters and employ alternative methods for valuing mortality benefits, which also suggest that suppression measures had positive net benefits.

Mulligan and Shleifer (2005) put forward a theory of regulation in which a fixed cost of regulating leads larger polities to regulate more. This follows a prediction made in Demsetz (1967) that because institutions have fixed costs associated with their establishment, introducing an institution only becomes efficient once the scale of the activity it supports is significant enough to cover the costs of creating it. Beyond these studies and a few follow-ups, very few have advanced scholars’ understanding of the relationship between regulation and population. This working paper is intended to help fill this gap in the literature. We aim to test whether this population-regulation connection holds using more recent, more refined, and more comprehensive measures of regulation. Using a variety of novel data sources from the RegData project, we show that population levels and the amount of regulation are highly correlated across countries and time, and that more populated US states, Australian states, and Canadian provinces tend to be more heavily regulated than less-populated states and provinces. A doubling of population size is associated with a 22 to 33 percent increase in regulation. This provides support for the theory that the fixed costs associated with regulating partly determine where and when regulations occur.

This paper explores the relevance of Bastiat’s famous distinction between the seen and the unseen consequences of actions to modern debates about cost-benefit analysis. In cost-benefit analysis, the opportunity cost of capital describes the unseen future returns a capital asset generates. However, there is no consensus among economists as to how to account for these returns, as disagreements are wrapped up in a broader controversy surrounding the correct social discount rate. The paper provides background on these debates and explains how adherents of the two mainstream discounting approaches both fail to live up to Bastiat’s standard of a “good economist.”

Owing to a series of incremental legislative and regulatory changes in recent years, the practice of pharmacy in Idaho, particularly with respect to pharmacists’ prescribing authority, has expanded far beyond what is permitted in any other state. This paper reviews the recent history of Idaho’s reforms, surveys academic literature looking at similar reforms that have occurred in other jurisdictions, and addresses concerns raised by some opponents of Idaho’s reforms. All told, the results of liberalization have been almost entirely positive in Idaho, as demonstrated by a clear increase in access for patients, a lack of any obvious increases in risk, and an improved business climate. Consequently, Idaho’s reforms offer a roadmap for states interested in pursuing a model of “permissionless innovation” for pharmacists.

To rein in fiscal deficits, policymakers traditionally raise taxes or cut public spending. However, many economists worry that those policies can slow down the economy. By contrast, faster economic growth — without changing taxes or spending — reduces the deficit on two fronts, by raising revenue and by reducing demand for safety-net public spending. In this policy brief, we argue that boosting economic activity by reducing the regulatory burden works indirectly as a deficit-reducing policy. This brief offers a pragmatic road-map for reducing the budget deficit through cutting red tape. First, we highlight how boosting productivity performance is critical to achieving faster economic growth. Second, we discuss how economic growth impacts the deficit. We conclude by offering evidence that regulation tends to worsen productivity, especially in product and labor markets, and that regulatory reform that results in productivity-enhancing growth could be a powerful way to improve the dire budget outlook for the United States.

A common way of imposing fiscal discipline in private companies, as well as in some governments, is a practice called zero-based budgeting (ZBB). The idea behind ZBB is simple: require that all expenditures be justified anew each period. There is no assumption that spending set at a particular level in a previous year means the same level of spending or more spending will be authorized the next period. Instead, a zero-base is the relevant baseline from which spending levels are set during the budgeting process. This chapter discusses a counterpart to ZBB in the regulatory sphere, namely zero-based regulation (ZBR). The idea behind ZBR is that regulations must periodically be justified anew, just as spending authorizations are periodically reevaluated under ZBB. A ZBR system will have two central pillars: sunset provisions and regulatory impact analysis requirements. Sunset provisions are automatic expiration dates built into regulations. These trigger reevaluation of rules and ensure the default is that rules go away, i.e., return to zero. Regulatory impact analysis requirements, meanwhile, are a form of economic analysis, which can be used as a means to rank and prioritize regulations according to their effectiveness. Taken together, these reforms have the potential to reduce costs substantially while also improving regulatory efficiency.

This paper estimates the benefits and costs of state suppression policies to “bend the curve” during the initial outbreak of COVID-19 in the United States. Relative to a baseline in which only the infected and at-risk populations mitigate the spread of coronavirus, we estimate that total benefits of suppression policies are between $440 billion and $1,049 billion up to August 4, 2020. We employ a value-of-production approach that values the benefits of each prevented COVID-19 death as avoided losses to total production. The production value of life differs significantly from the value of a statistical life (VSL) commonly employed in cost-benefit analysis, and we identify several problems with using the VSL. Relative to private mitigation, the costs of suppression policies are estimated to be between $255 billion and $464 billion. The cost estimate is based on suppression policies being enforced in the United States for between 50 and 91 days, which reflects that many states lifted stay-at-home orders and nonessential business closures in May 2020. Our results indicate that the net benefits of suppression policies to slow the spread of COVID-19 are likely positive and may be substantial, but given significant uncertainty, net benefits may be close to zero.

One of the most urgent challenges facing policymakers managing the current COVID-19 public health crisis is how to ramp up diagnostic testing on a mass scale. Companies such as Walgreens, CVS, and Target have already started working with the federal government, as their locations are well-suited to become testing sites. As a result, pharmacies and pharmacists themselves are likely to become instrumental in testing for COVID-19 in the coming weeks and months. However, certain regulatory restrictions on pharmacists should be relaxed so that they can practice to the full extent of their training and abilities.

Technological innovation is a fundamental driver of economic growth and human progress. Yet some critics want to deny the vast benefits that innovation has bestowed and continues to bestow on mankind. To inform policy discussions and address the technology critics’ concerns, this paper summarizes relevant literature documenting the impact of technological innovation on economic growth and, more broadly, on living standards and human well-being. The historical record is unambiguous regarding how ongoing innovation has improved the way we live; however, the short-term disruptive aspects of technological change are real and deserve attention as well. The paper concludes with an extended discussion about the relevance of these findings for shaping cultural attitudes toward technology and the role that public policy can play in fostering innovation, growth, and ongoing improvements in the quality of life of citizens.

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 this context is best thought of as a failure to learn from the past.

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.

In 2017, President Trump signed Executive Order 13771, which required that two regulations be identified for elimination each time a new federal rule is proposed. The order also created, for the first time, a system of annual regulatory budget allocations for federal agencies. On the surface, the policy seems promising, as it resembles a similar program established in the Canadian province of British Columbia in the first decade of the 21st century. That program has widely been viewed as a success and inspired reforms elsewhere in Canada as well as in the United States. This paper compares the regulatory reform efforts in the United States with those in British Columbia as a means to predict whether the US effort is likely to be successful and to identify ways in which the US program might be improved. The article finds that the way in which the US regulatory reform is being implemented is limiting its scope to a degree that will likely undermine its effectiveness. For example, the number of rules that qualify as EO 13771 regulatory actions is narrowed to the extent that vast amounts of new regulations and most policy documents are exempted from the offset requirement. Furthermore, the complicated nature of the two-for-one requirement, whereby different sets of rules are counted as “ins” versus “outs,” is making reporting difficult, if not misleading. The authors recommend improving reporting and transparency by creating a system for tracking government-wide regulatory requirements or restrictions over time, as well as changing the two-for-one requirement so that the same sets of rules count as regulatory and deregulatory actions. Although the current reforms are clearly having some immediate impact, expanding the scope of what the reforms cover, adopting a simpler measure, and improving reporting in order to create more transparency would make the reforms more consistent with the reforms in British Columbia, which have a track record of success. This would not be difficult to accomplish, and the article recommends some practical changes that build on the current reforms in the United States.

This paper reviews complications associated with the two most popular discounting frameworks for benefit-cost analysis, and presents an alternative approach based on a social discount rate of zero. The first method, known as the social opportunity cost of capital approach, is problematic in that it assumes all benefits are just like cash, thereby giving too much weight to consumption relative to investment. The second method, the social rate of time preference approach, applies distributive weights to benefits and costs in a manner inconsistent with economic efficiency, and it assumes a social welfare function that is unlikely to correspond with society’s actual preferences. This paper suggests modifying the social rate of time preference approach so that it relies on a social welfare function consistent with efficiency. This would seem to be equitable as well as wealth maximizing. But even if the approach recommended here is not preferred by economists, a reexamination of the standard approaches is long overdue.

In recent years, numerous states have experimented with red tape reduction efforts with a goal of reducing unnecessary regulatory burdens. Few studies have evaluated the effectiveness of such reforms, however. This paper examines the New Jersey red tape reduction effort, which was implemented under the leadership of Governor Chris Christie, starting in 2010 and ongoing throughout his two terms in office. The reform effort appears to have failed with respect to lowering the overall level of state regulation, though there is evidence that the effort slowed the growth of regulation. Despite this shortcoming, a number of regulations were eliminated as part of the effort, and this paper identifies some best practices, including how regular reporting on the program’s progress provided transparency and appeared to spur legislative action. The paper concludes with a discussion of ways to improve the effectiveness of future state-level reforms aimed at reducing red tape.

This paper updates the cost-per-life-saved cutoff, which is a cost-effectiveness threshold for life- saving regulations, whereby regulations costing more per life saved than this threshold level are expected to increase mortality risk on net. Two competing methods of deriving the cutoff exist: a direct approach based on empirical observation and an indirect approach grounded in economic theory. Both methods build from the assumption that changes in income lead to changes in mortality risk. The likely mechanisms driving this relationship are discussed, with support from recent empirical studies. The indirect approach is preferable in that it avoids the problems of endogeneity of health status and income found with the direct approach. The cost-per-life-saved cutoff value at which regulations increase mortality risk is estimated to have a lower bound value of $75.4 million and an upper bound value of $123.2 million, with a midpoint value of $99.3 million. This cutoff value range is compared with cost-effectiveness estimates for a series of recent policies, including several state expansions of the Medicaid public insurance program in the first few years of the 21st century, an early version of the “travel ban” executive order that restricted refugee admissions into the United States, and nine recent air pollution regulations from the Environmental Protection Agency. The paper concludes that the mortality risk test is an important and underutilized tool in the policy analyst’s toolkit, both as an overall test of regulatory efficacy and as an integral component of calculations of net risk effects of policies.

This paper examines the use of the linear no-threshold (LNT) model in chemical and radiation exposure. The LNT model assumes that exposure to any level of a chemical or radiation is harmful, down to even the last molecule. Used primarily to be “public health protective,” the model has been the backbone of chemical and radiation risk regulation for many decades. Given the current state of science and risk management tools, we challenge the notion that using the LNT as the default model is public health protective. First, more and more research has uncovered dose-response relationships that reveal either a threshold or, more importantly, a hormetic response, where exposure to low doses of a hazard actually yields health benefits. Second, given these more realistic alternative dose-response models, risk management tools including risk-risk analysis and health-health analysis show that regulating down to extremely low levels can have negative health consequences when ancillary risks are considered. Risk-risk analysis focuses on how reductions in target risks can lead to increases in risk from substitute chemicals or activities. Health-health analysis explores how costs of compliance are borne in part by consumers who are forced to reduce their own private risk-mitigating activities. Overestimating risk, a common feature of the LNT model, upsets the careful balancing of risks required of risk managers.

Regulatory impact analysis (RIA) is a tool regulators use to help guide them through the decision-making process when promulgating regulations. When used properly, it has the potential to extend thousands of lives, improve quality of life for citizens, and bestow enormous net benefits on the public. While some difficulties are inherent in the analytical process that produces RIAs, they are not insurmountable. A well-done RIA is a powerful way to gather information for decision-makers, such that regulators are better informed before intervening in markets, and regulations are more likely to achieve objectives.

In May of 2015, the European Commission released a package outlining the vision for its Better Regulation initiative, a program aimed at improving outcomes of European Union (EU) regulation. The move represents a step forward for regulatory reform in the EU, and signals a potential shift in world leadership roles among countries promoting evidence-based policy. The United States (US), once at the forefront of regulatory science and analysis, may now be lagging behind. If Better Regulation is implemented as its ambitious designers envision, this could signal a new role for the EU in advancing 21st century policymaking.Better Regulation seeks to improve the EU regulatory process in several ways. The initiative allows for more meaningful citizen and stakeholder participation at all stages of the policymaking process; it seeks to institutionalize the use of economic analysis throughout the lifecycle of a policy; and it sets up a process for reviewing the existing stock of regulations to ensure old rules do not become excessively burdensome or obsolete. All this is done in a manner intended to inform legislators as they periodically review funding levels for new and existing programs.