Regulatory Budget

What is a Regulatory Budget?

A regulatory budget is a reference to policies that restrict the amount of spending that a federal administrative agency can impose through regulation. In our studies, we take a look at understanding how regulatory budgeting affects the economy as a whole.

The first publication below, Legislative Impact Accounting: Incorporating Prospective and Retrospective Review into a Regulatory Budget, proposes using a better method for Congress to overcome information scarcity. This is in regard to how regulation has an economic impact on taxes and spending. The findings show a reason why tracking is essential to the budgetary process. This method referred to as legislative impact accounting (LIA), builds on the concept of regulatory budgeting. The paper goes on to discuss how LIA can provide Congress with enough actionable information to help improve the regulatory and budgeting process with the help of RegData.

The second publication examines the government of British Columbia and its attempt at reducing its regulatory burden by about one-third through the use of a regulatory budget. Three years after this plan was enacted British Colombia saw major success and managed to reduce its regulatory burden by 36 percent. This paper delves into this success and gives a closer examination of how much the regulatory reform attributed to the economic turnaround that they achieved.

Take a look at these publications to better understand how using RegData can help you better understand the effects of regulatory budgeting on the economy and business.

+ Legislative Impact Accounting: Incorporating Prospective and Retrospective Review into a Regulatory Budget

BY: Jason J. Fichtner, Patrick A. McLaughlin, Adam N. Michel
DATE: December, 2017

Abstract: Congressional decision-making suffers from scarce information about the scope and economic consequences of legislative actions. This paper proposes a better method to overcome congressional information scarcity. Our proposal relies on the premise that regulations have similar economic effects as taxes and spending, and therefore should be scored and tracked as part of the budget process. Our proposed system of legislative impact accounting (LIA) builds on the concept of a regulatory budget by developing a system for both prospective and retrospective review to create an effective feedback loop to better communicate information about economic effects of regulations to Congress
+ Regulation and Economic Growth: Evidence from British Columbia’s Experiment in Regulatory Budgeting

BY: Bentley Coffey & Patrick McLaughlin
DATE: June 1,2021

Abstract: We exploit a quasi-natural experiment to identify the effect of regulatory accumulation on economic growth. Following a decade of poor economic growth, the Canadian province of British Columbia implemented a regulatory budget in 2001. We use a difference-in-differences strategy to estimate the effect of this policy intervention, finding that British Columbia’s growth rate increased by about 25 percent relative to other provinces. We also present a set of regressions that, using data from the RegData project, directly account for changes to the stock of regulations as a possible determinant of economic growth. We find that regulatory budgeting, as implemented in British Columbia, is associated with much-improved economic performance. A 1 percent increase in the stock of regulations is associated with a 0.028 percent decrease in year-to-year economic growth. This finding implies that British Columbia’s regulatory budget experiment, through reducing the quantity of regulations by about 36 percent, positively affected year-to-year growth by approximately 1 percentage point.