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Indiana Law Journal

Document Type

Article

Publication Date

Winter 2025

Publication Citation

100 Indiana Law Journal 409

Abstract

Cost-benefit analysis is at the core of regulatory impact analysis for every proposed rule or regulation and is designed to be a structural constraint on the administrative state. The challenge is ex ante cost-benefit analysis necessarily rests on many assumptions, and much more information is available about a regulation’s impact after it has been implemented. But ex post cost-benefit analysis is ad hoc and infrequent in spite of efforts by numerous presidential administrations to promote regulatory lookbacks.

I propose institutionalizing “contingent regulatory sunsets” to ensure that rules and regulations have the positive impact in practice that administrative agencies intended. I show how Congress can consider a spectrum of approaches for independent actors to conduct regulatory lookbacks of economically significant regulations at regular intervals. I explore the merits for centralized legislative branch review (Government Accountability Office), strengthened executive branch review (Office of Information and Regulatory Affairs), agencies themselves, and the creation of a new “Regulatory Lookback” agency to take on this role. While each approach has virtues, I conclude that each agency’s Office of Inspector General (OIG) may be best positioned to build on existing oversight functions to provide periodic review of the impact of regulations.

If the OIG’s cost-benefit analysis shows that the regulation’s real-world impact is actually negative, then the agency that issued the rule would face the burden of rescinding, modifying, or providing updated justifications and cost-benefit analysis. The goal is not to cripple the workings of the vast administrative state, but rather to provide systematic, internal accountability. The hope is that overly optimistic assumptions about costs and benefits will be tempered by routine ex post scrutiny and the sunlight of empirical reality. I then lay out quantitative and qualitative limiting principles to show how periodic cost-benefit review of economically significant regulations could be economically and politically feasible. I conclude by proposing a pilot study to measure the efficacy of OIG ex post review of regulations to provide evidence to justify expanding this initiative on an executive branch-wide basis.

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