Regulatory Policy: The Real-World Impact of a Long-Term Research Effort

Rather than focusing on immediate policy problems, the Tobin Project aims to generate cutting-edge research that will expand available knowledge for tackling major challenges both now and in years to come. In 2007, at a time when economic regulation was not a focus of public debate, the Tobin Project launched a research effort to better understand how regulation might serve the public good. Critical policy decisions, especially following the financial crisis of 2007-2009, have been informed by this work. In 2010, Tobin-seeded research contributed to key elements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and in 2011, Tobin Project research helped shape both the Obama Administration’s approach to regulatory review and its response to the oil spill crisis, detailed below.


February 2008: Professors Michael Greenstone (MIT, Economics) and Ed Balleisen (Duke University, History) write academic papers for the Tobin Project’s 2008 Government & Markets conference, offering ways to improve regulation.

Professor Greenstone argues that even popular regulatory policies must be tested retrospectively to ensure that the benefits outweigh the costs. Professor Balleisen draws lessons from history to examine how co-regulation involving both industry and government oversight can be effective. The Tobin Project encourages revision and editing for publication in an edited academic volume: Government & Markets: Toward a New Theory of Regulation (Cambridge University Press, 2010).

December 2008: The Tobin Project convenes a group of leading scholars, including Professors Greenstone and Balleisen, to contribute to a compendium for policymakers, New Perspectives on Regulation (Tobin Project, 2009).

Tobin encourages the authors to think in new ways about how to make their scholarship accessible to policymakers and the public. Professor Greenstone contributes a chapter that extends his paper from Government & Markets and offers a more concrete policy solution, arguing that a “look back” requirement for regulations is necessary to identify those that perform well and remove or reform those that do not.  Professor Balleisen co-authors a chapter with Marc Eisner (Wesleyan University, Government), offering a framework for co-regulation where industry self-regulation can be productive with vigorous public oversight.

“Without the Tobin Project, I probably never would have [thought] about ways to improve the regulatory process. The Tobin Project was very successful at pushing me to think about how to take my academic ideas and translate them to a form that could be potentially useful in Washington."
- Michael Greenstone

Summer/Fall 2009: The Tobin Project publishes New Perspectives on Regulation, circulating the volume in both academic and policy communities, including members of Congress and an expansive on-line audience. 

After publication, the Tobin Project arranges a dinner in Washington, D.C. for select authors from the volume to discuss their research with several dozen members of Congress. Both Professors Greenstone and Balleisen present their work. In its first four months of distribution, the volume is distributed to over 2,000 readers. 

Spring 2009-Winter 2010: As Chief Economist to the Council of Economic Advisors, Michael Greenstone emphasizes the conclusion of his research, included in New Perspectives on Regulation

During his tenure as Chief Economist, Michael Greenstone emphasizes the conclusion of his research from New Perspectives on Regulation: “Our goal should be to rigorously evaluate every regulation in order to expand upon the ones that work and weed out the ones that fail to improve our well-being (or worse, harm it).”

November 2010: The Tobin Project shares Professor Balleisen’s research with the President’s National Commission on the BP Deepwater Horizon Oil Spill.

In addition, Tobin arranges conversations to discuss how strategies of industry self-governance might be part of a comprehensive regulatory response. “Structured properly and complemented by the right kind of public oversight,” Balleisen observes, “such initiatives can help to redirect social norms within an industry, improving regulatory outcomes.” 

January 2011: The Commission issues its “Report to the President,” citing Professor Balleisen and Eisner’s research.

The Report both directly cites their research and more broadly adopts significant elements of the framework they presented in New Perspectives on Regulation for linking public and private regulatory efforts.

“Working with the Tobin Project encouraged me to move beyond the confines of my own discipline … help[ing] me to develop a perspective that has now informed policy recommendations about how to respond to America’s most damaging oil spill.”
- Ed Balleisen

January 2011: President Obama signs Executive Order 13563: Improving Regulation and Regulatory Review, drawing on Professor Greenstone’s research. 

The Executive Order requires all executive agencies to “promote retrospective analysis of rules” and to “modify, streamline, expand, or repeal them in accordance with what has been learned.” 

April and June 2011: Cass Sunstein, Administrator of the Office of Information and Regulatory Affairs (OIRA), sends out two memoranda for the heads of executive departments and agencies, citing Professor Greenstone’s New Perspectives on Regulation chapter. 

The memoranda offer guidance on how to implement the President’s Executive Order, which calls for retrospective analysis of existing significant regulations.

August 2011: The White House releases final regulatory reform plans, created by agencies in response to Executive Order 13563. As a result of the retrospective analysis of rules, agencies are able to reduce costs and improve the efficiency of their systems.

In response to President Obama’s Executive Order, agencies and departments review their systems, identifying areas for improvement and submitting final regulatory reform plans to the White House. The reforms explicitly incorporate plans to repeat the process of regulatory lookback in the future. Of the review process, President Obama says: “[The Government-wide review of rules now on the books] was recently completed, producing reform plans from 26 agencies. A mere fraction of the initiatives described in the plans will save more than $10 billion over the next 5 years; as progress continues, we expect to be able to deliver savings far in excess of that figure.”

Late 2013: Significant progress is made toward streamlining, simplifying, and testing regulations in the three years following the executive order. 

The “regulatory lookback” inspired in part by Professor Greenstone’s research makes significant progress over the course of 2012 and 2013. Numerous regulatory reforms from the agencies’ 2011 plans are put into place, including:

  • EPA regulations had classified milk as an “oil,” requiring expensive storage systems that were necessary for substances like gasoline, but not for milk. Removing this requirement is projected to save $700 million over five years.
  • The Department of Labor simplified and improved hazard warning requirements for workers, which should save $2.5 billion over the next five years and enhance worker safety.
  • The Department of Health and Human Services cut back on unnecessary red tape and reporting requirements for hospitals and other healthcare providers, which is expected to save $5 billion and many hours of work.

While work remains on institutionalizing retrospective regulatory assessments, these and other reforms over the last two years indicate that our government is learning and incorporating lessons from New Perspectives on Regulation.