Adventures in behavioral economics

Posted on August 4, 2012  /  0 Comments

Universal acclaim rarely comes to a theorist who tries to implement his ideas.

As administrator of the White House Office of Information and Regulatory Affairs, he reviewed the rules implementing President Obama’s health care act and the Dodd-Frank financial regulatory reform law. He backed major environmental initiatives, including higher fuel efficiency standards for cars and trucks and new toxic emissions rules for power plants. He approved the revamping of the decades-old food pyramid (it is now a “plate”), the tightening of salmonella rules for eggs and a crackdown on prison rape. He midwifed a deal between appliance manufacturers and the Department of Energy to make refrigerators more energy efficient.

A close friend of President Obama’s from their days on the University of Chicago Law School faculty, Mr. Sunstein had his choice of high-profile positions in the administration. He opted for the obscure Office of Information and Regulatory Affairs (familiarly known as OIRA, pronounced “oh, Ira”), a unit of the White House Office of Management and Budget that reviews every regulation proposed by an executive branch agency.

Few proposed rules escaped his gaze or his editor’s pen. Of the hundreds of regulations issued by the administration as of late last year, three-quarters were changed at OIRA, often at the urging of corporate interests, according to an analysis from the Center for Progressive Reform, a liberal-leaning group that monitors federal regulation. For rules from the Environmental Protection Agency, the figure was closer to 80 percent, the group found. In virtually every case, the rule was weakened, the group claimed.

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