Reforming government regulations: Stephen Breyer’s technocratic solutions

Please note that this post is from 2012. Evaluate with care and in light of later events.

In Breaking the Vicious Circle, Justice Stephen Breyer tackles the problem of regulation and risk in the American context:

Justice Breyer identifies several systemic problems that plague the regulatory process in the United States. He discusses how public (mis)perceptions, congressional (over)reaction, and technical (un)certainty create a “vicious circle” that increasingly undermines the legitimacy of the regulatory process.  —  Eric J. Gouvin, A Square Peg In A Vicious Circle: Stephen Breyer’s Optimistic Prescription For The Regulatory Mess

Breyer complains that the current approach to risk regulation is irrational. Because the perception of risk drives voters, and therefore public officials, to focus on specific potential harms, there is little appropriate “risk-benefit” assessment employed.

For example, regulators may seek to clean up every aspect of a potential agent — like asbestos — while neglecting to consider whether the benefit of complete cleanup is worth the risk, either monetary or physical:

For example, “cleaning up” asbestos in public buildings causes asbestos fibers that would have remained harmlessly in place to become airborne, increasing significantly the chance of those fibers lodging in workers’ lungs and creating medical problems. (Gouvin, n. 11, 475)

Breyer puts together a table showing that some regulations with costs of $10 million to $5.7 trillion per life saved. In short, the “marginal cost of extra health may daunt all but the most zealous” (Stephen F. Williams, “Risk Regulations and its Hazards,” 1499).

1995′s approach is also uncoordinated. Breyer points out that regulations on space heaters cost $100,000 per life saved, while bans on DES in cattle feed cost roughly $125 million “per statistical life” (22). Stephen Williams explains that Breyer sees this as a “wasteful allocation of resources” that over invests in certain areas and neglects others (1498). In other words, with limited resources available, such uncoordinated and disconnected spending fails to save the maximum number of possible lives per available dollar — and little has changed in 2012.

Regulations also overlap in unanticipated (but likely not unanticipatable) ways:

Proposed rules concerning disposal of sewer sludge, designed to save one statistical life every five years, would encourage waste incineration likely to cause two statistical deaths annually (22).

In other words, disparate agencies assessing and regulating risk tend to focus on their own peculiar zones of risk, and fail to appreciate the big picture of interacting regulations.

In summary, Breyer categorizes the various regulatory failures like those described above as (1) tunnel vision, (2) random agenda selection, and (3) inconsistency.

The Source of the Problem

Irrational regulations emerge from a triumvirate of sources: (1) inaccurate public perceptions; (2) congressional action and reaction, instead of planning; and (3) uncertainties in the regulatory process.

First, even if lay people do think rationally about possible risks — and Breyer thinks they tend to — they “are unlikely to acquire a full grasp of the relevant facts” (Williams, 1500). The lay public typically gets its information from press sources, and the press focuses on the dramatic. A focus on toxic-waste dumps, for example, along with a presentation of higher-than-average cancer rates in nearby areas, may conflate causation with correlation and lead to an irrational (if viewed from a societal perspective, anyway) demand to regulate toxic-waste dumps to reduce the incidence of cancer.

Second, Congress tends to be reactive to what they perceive as voter’s current demands — since these demands are what get them re-elected. (The House, which its short, 2-year election cycle, is even more prone to this than the Senate, which grants 6 years between elections). And with changing Congressional representation, agencies may receive vastly different, and potentially incompatible, regulatory missions.

Third, the regulatory process itself is uncertain, because the science of risk is uncertain. It is essentially impossible to set up a double-blind, controlled study of the effects of small amounts of benzene on humans over a 60-year period. Instead, researchers use short-term, high-dose animal studies and then extrapolate to the long-term effects on humans.

But rats are not humans, and high-doses of chemicals do not necessarily cause the same effects as low-doses. As Breyer observes, there is “no consistent scientific rational for assuming a linear relation between dose and response” (44).

Statistical and epidemiological studies can get around these particular problems, but introduce their own potential issues — especially around the problems of distinguishing between causation and correlation. Also — impossible to isolate all variable. Variables are never truly independent. Best to look for lots of study — meta-studies — an rather inductive science.

Breyer’s Solution

Breyer has no real solution to the technical problems of the science, other than to let technically trained people — those who understand the problems with the science — make the decisions. He does have many suggestions about how to structure a bureaucracy/technocracy that can better weigh, assess, and decide on policies based on the data that can be generated with today’s science.

His overall solution is quintessentially technocratic, and very much reminiscent of a more European model of regulatory authority. He wants, in the words of Todd Zubler, “an elite and insulated cadre of civil servants” (244) — experts in both science and government — to “unite[] political power with wisdom.” (Breyer, x) This Socratic unity, as opposed to the voting booth, is what creates trust; it “must be central in any effort to create the politics of trust” (81).

More specifically, Zubler says,

Breyer wants to establish a new and prestigious career path by which civil servants could develop regulatory expertise across a number of different governmental agencies. These experienced bureaucrats could then form a small, centralized administrative group that could coordinate and rationalize the nation’s regulatory agenda. Such an organization, according to Breyer, would combine the expertise, broad vision, political insulation, and interagency jurisdiction which are all so lacking in the current system. (244)

Issues

Zubler worries that Breyer’s new centralized bureaucracy goes too far. Other forces can also protect people from risk, including the market and the judicial system:

But … regulation is only needed when market and common law mechanisms fail. To push bureaucratic regulation beyond those situations threatens individual liberty and freedom. (247)

Put differently, Breyer’s European-style, top-down, technocratic system brings efficiency and rationality to bear of the problem of risk. But — interestingly for a lawyer and judge — it neglects the bottom-up tools that are core to the American approach, such as tort law and free-market competition. He proposes a grand, top-down restructuring that does nothing to adjust and improve an individual’s ability to assess and manage risk, such as improved labeling and consumer information and better access to the courts.

The Judiciary

What would be the role of the judiciary in an America where technocratic elites are making regulatory decisions?

Medical device manufacturers have already argued — and won — the case that FDA-approval of medical devices preempts tort lawsuits (Riegel v. Medtronic, 552 U.S. 312 (2008)). On the other hand, drug manufacturers lost their bid for preemption in Wyeth v. Levine, 555 U.S. 555 (2009).

Would — or should — Breyer’s approach preempt lawsuits? For maximum efficiency, it should — but the American system is not about efficiency at all. It’s about checking the power of any one part of government. The judiciary’s role since Marbury v. Madison, at least, is to check the rest of government. But while eliminating this check would fundamentally alter the balance of power, not doing so would severely undermine many gains in efficiency.

Interestingly, Breyer’s unelected, technocratic elite are reminiscent of the federal judiciary itself. It too consists of specialists (in law) who are unelected (they appointed by the President) and unaccountable (except via impeachment, federal judges serve for life). But the judiciary is considered the third branch of American government, and these special attributes serve as its means of checking and balancing the executive and legislative branches. Extending these attributes to Breyer’s new cadre might well create the equivalent of a fourth branch — and would anything less prove effective enough to be worth the effort?

Liberal or Conservative?

Finally, I wonder how to characterize Breyer’s proposal: is it liberal, conservative, or something else? In many respects, his solution is extremely conservative: it presumes a distrust of the public that is reminiscent of conservative distrust of poor voters, for example. But it invokes a liberal (in the modern sense), governmental solution to the problem, one that is opposed to contemporary Republican views that government is the problem, not the solution. On the other hand, a more efficient regulatory system could eliminate government waste, reform tort law, and free business from burdensome, pointless regulations. A more efficient government is a cheaper government that would require fewer taxes — a popular conservative goal.

Depending on the details, then, Breyer’s reforms could appeal to both Democrats and Republicans — but certainly not to modern libertarians, or to anyone opposed to government on principle. It is, in a sense, anti-individualist, and deeply dismissive of old liberal notions of market-based corrections and individual responsibility.

Conclusions

Still, gains in efficiency and effectiveness would not require such radical changes. Improved cross-agency coordination and more inclusion of scientific experts — perhaps with a more limited version of Breyer’s technocratic bureau — might provide major gains without requiring fundamental readjustments of the American system.

My short opinion? Breyer effectively identified major systemic problems with the American regulatory system, but his full proposed solution is simply impractical in the United States (perhaps especially in 2012) — but more limited versions would still provide useful reforms. But any of this would require greater trust and respect in science — and a philosophical uniting of virtue and wisdom by scientists is not enough to overcome the current anti-intellectual and anti-science beliefs prevalent today in the American Right:

“The dangers of carbon dioxide? Tell that to a plant, how dangerous carbon dioxide is.”  —  2012 GOP presidential candidate Rick Santorum.