Presentation by Russell Pittman, Antitrust Division, U.S. Department of Justice, at a RIA workshop for the transport infrastructure regulator of Peru (OSITRAN) which took place in Lima 20-22 February 2017. Further information is available at www.oecd.org/gov/regulatory-policy/

1. Russell Pittman
Antitrust Division, U.S. Department of Justice
Training Workshop on Regulatory Impact
Assessments
OECD and OSITRAN
Lima, Perú
20-22 February, 2017
The views expressed are not purported to reflect the views of the U.S.
Department of Justice.
Session 4: Definition of the
problem and public policy objective

2. Important to define the problem
or objective, clearly and carefully
 In US, OMB (White House Office of Management
and Budget, Office of Information and Regulatory
Affairs), “Regulatory Impact Analysis: A Primer”
 An RIA “should include ... a statement of the need
for regulatory action.”
 Is this a “natural monopoly” sector?
 Is this a sector with significant “externalities”,
positive or negative?
 Are there policy goals that an unregulated market is
not meeting?
 For example, “improving government processes, protecting
privacy, or combating discrimination”
2 Pittman on Compliance Strategies

3. Important to evaluate proposed government
“answer” to problem, including possible
alternative answers
An RIA “should include ... a clear identification of a range of
regulatory approaches” – that is, what are alternative strategies?
 State/local regulation
 Antitrust enforcement
 Other litigation, for example privately brought product liability
claims
 Voluntary actions by private sector, perhaps supported by
information-disclosure requirements (e.g. auto fuel efficiency
standards, appliance efficiency standards)
An RIA “should include ... an estimate of the benefits and costs –
both quantitative and qualitative – of the proposed regulatory
action and its alternatives”
 Quantification and/or monetization where possible
 But non-quantifiable goals may be included: The analysis of
these alternatives may also consider, where relevant and
appropriate, values such as equity, human dignity, fairness,
potential distributive impacts, provacy, and personal freedom.”
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4. Some broader issues to keep in
mind
 Most fundamentally, are Regulatory Impact
Analysis and Cost/Benefit Analysis:
 a) a tool for objective policy analysis and evaluation,
useful for the public and their representatives to rein
in over-zealous regulators?, or
 b) a tool for corporate and monied interests to delay
and block important regulatory restraints that they
dislike?
 Answer: YES.
Pittman on Compliance Strategies4

5. A (brief) case example from the US
Pittman on Compliance Strategies5
 “Positive train control” mandated by Congress in
2008 in response to fatal train accidents
 Rail industry fought unsuccessfully, though
succeeded in delaying deadline
 Industry:

6. Recommended Reading
Pittman on Compliance Strategies6
 OMB Circular A-4
 https://www.transportation.gov/regulations/omb-circular-no-4
 “Regulatory Impact Analysis: A Primer”
 https://obamawhitehouse.archives.gov/sites/default/files/omb/i
nforeg/regpol/circular-a-4_regulatory-impact-analysis-a-
primer.pdf
 Art Fraas and Randall Lutter, “The Challenges of
Improving the Economic Analysis of Pending Regulations”,
Annual Review of Resource Economics 3 (2011), 71-85
 http://www.annualreviews.org/doi/abs/10.1146/annurev-
resource-083110-120042 (published version, paid access)
 http://www.rff.org/research/publications/challenges-improving-
economic-analysis-pending-regulations (working paper
version, free)