Does White House Regulatory Review Produce a Chilling Effect and “OIRA Avoidance” in the Agencies?

Abstract

What effect does regulatory auditing by the Office of Information and Regulatory Affairs (OIRA) have on the production of regulations in the agencies? In particular, does targeting an agency for heavy regulatory auditing inhibit its production of regulations, a “chilling” effect? Does heavy auditing encourage it to substitute multiple small regulations in place of single large one, “OIRA avoidance”? We present an early empirical analysis of these questions by estimating regulation production functions for federal agencies, using data from the Unified Agenda from 1995 to 2010. We attempt to distinguish the differential effects of regulatory auditing from appointments into the agencies, leveraging off exogenous variation created by independent regulatory commissions. Our data uncover no evidence of a chilling effect in the production of economically significant regulations due to the Bush administration's regulatory auditing, relative to the Clinton or early Obama administrations. Nor do we find any evidence of OIRA avoidance. We do find some evidence that the Bush administration reduced the production of noneconomically significant regulations overall. However, the effect appears to be due to appointments in the agencies. Overall, the results raise questions about the efficacy of presidential efforts to control the regulatory state and how best to evaluate those efforts.