OIRA’s goal: Regulation for humans, not econs

Type “OIRA dashboard” into Google. The first hit? RegInfo.gov, a new web site that demystifies the opaque subject of rules and regulation in Washington by enabling people to track their progress throughout a review process.

The site’s launch coincides with Nudge co-author Cass Sunstein’s first public remarks since taking over the Office of Information and Regulatory Affairs (OIRA), the office in charge of reviewing, developing, and overseeing regulations across the federal government. Speaking at an American University law school conference, Sunstein emphasized that OIRA’s goal is to create regulatory policy for Humans, not Econs; “homo sapiens rather than homo economicus,” he explained.

As an example, he cited a set of recently released rules intended to discourage airlines from pulling away from the gate and sitting near a runway, essentially trapping people on planes for unknown periods of time.

The basic idea is if you’re flying domestically, and you can’t be kept on the tarmac for more than three hours, and you get food and water and medical care if you need it within two hours. That rule is accompanied by an extremely disciplined analysis of its cost and benefits. If we’re imposing financial burdens on airlines, we want to catalog them as best we can, and make sure the benefits justify the action.

You can listen to Sunstein’s remarks here.

Cass Sunstein goes to Washington

From Chicago to Cambridge and now to D.C.

Cass Sunstein is headed for Washington to lead the White House Office of Information and Regulatory Affairs. A well-deserved congratulations are in order. And now a plea to reporters: Please don’t call him the “regulation czar.”

The OIRA has been around officially since 1980, and unofficially as Presidential regulatory principles and centralized review since the Nixon administration. A trivia question for our readers: Who was the first OIRA administrator? Like Sunstein, this person graduated from Harvard and spent time at Chicago. The answer is here.

There was a lot of chatter in the media and the blogosphere about Sunstein’s appointment (here, here, here, here, here, and here), with frequent references to Nudge – which is great, of course. But it is worth mentioning that Sunstein started writing and thinking about regulation long before he turned to nudges and choice architecture. The behavioral bit may generate the big buzz, but Sunstein’s deep understanding of regulatory issues extends far and wide. At Chicago, Sunstein taught a number of regulatory courses, including Theoretical Foundations of the Regulatory State; Regulation: What Works and What Doesn’t; Employment and Labor Law; Environmental Law; Law, and Behavior and Regulation. And (surprise!) he’s written plenty about these subjects. Interested readers may want to check out some of the highlights below

1) The Cost-Benefit State. (paper)

2) Risk and Reason: Safety, Law, and the Environment. (Amazon link)

3) Beyond the Precautionary Principle (paper) and The Precautionary Principle as a Basis of Decision Making (paper). For a shorter version, see this op-ed in the Boston Globe.

4) Remaking Regulation. (American Prospect article)

5) A New Executive Order for Improving Federal Regulation? (paper)

5) Administrative Law and Regulatory Policy. (Amazon link to law school case study textbook)

6) Worst Case Scenarios. (Amazon link)

Addendum: Thanks to Matt Welch, Reason magazine’s editor in chief, for obliging the Nudge blog’s request, and for having a sense of humor about it.

Cass Sunstein on the financial crisis

Some of the most interesting work in modern economic theory explores a pervasive social phenomenon: the informational cascade. The concept, first elaborated in a brilliant 1992 paper by Sushil Bikhchandani, David Hirshleifer, and Ivo Welch, illuminates countless social and economic surprises. It is impossible to understand the real estate bubble, or the current financial crisis, without exploring the dynamics of informational cascades. Policymakers should consider its implications in seeking ways to respond to today’s economic chaos.

From Wall Street’s Lemmings, in the New Republic:

Cass Sunstein on his prolificacy and Judge Richard Posner’s

Are you and Richard Posner locked in a publications arms race?

Judge Posner and I are good friends. A few years back, Ronald Dworkin wrote an essay attacking the two of us simultaneously and we decide at lunch on Friday that we would co-author a response. I wanted to get the jump on the response, so I worked very hard over the weekend and produced a seventeen-page, single-spaced paper with no footnotes, which I faxed to Judge Posner on Monday morning. That was fast. I got back to my office and on my chair was a fax from Judge Posner which was thirty pages, single-spaced, with complete footnotes. So, publication races he wins.

From Harvard Law Record Q&A

Chaos often breeds life, when order breeds habit*

*Quote from The Education of Henry Adams.

If you’ve read the Freakonomics transcript of Cass Sunstein and Richard Thaler discussing Nudge, you may have noticed the two curiously different author photographs. Thaler’s is a relatively recent, professional, tightly cropped color photo from the neck up. Sunstein’s, meanwhile, is a black-and-white wide-shot of him talking on the phone in his office (as if he is oblivious to the camera) amidst a clutter of papers and books. Sunstein’s photo is reprinted here for those who missed it.

This photo originally appeared in a 2001 University of Chicago magazine piece, “Kings of Chaos,” featuring six of Chicago’s most brilliant professors amidst their academic gallimaufry. Here’s how Sunstein explained his office then:

Despite the “mess” and the lack of a system, Sunstein says, “I do tend to know where things are.” He qualifies: “I know where everything important is, and I don’t usually lose things. But I have lost checks, made out to me, and I also find coffee cups and Coke cans in surprising places.” He does reorganize on occasion: “When it gets completely disgraceful, I improve it a bit. Usually I clean up a bit in the summer. Right now it’s gotten completely disgraceful, I guess.”

Very few items-ties and KitKat wrappers notwithstanding-in Sunstein’s office on the fourth floor of the Laird Bell Quadrangle are unrelated to his work. The “most unusual” set of items in the room, he says, “may be my CD collection, which features Inter Alia, Bob Dylan, Sheryl Crow, Liz Phair, Bruce Springsteen, and Shawn Colvin. Eminem can also be found here.”

And while his office may be disgraceful, his home, Sunstein declares, “is actually very neat. No mess at all. I keep it that way, partly for my 11-year-old daughter.”

To see the other five offices, including Nobel Prize Winner Robert Fogel’s and McArthur Fellow John Eaton, click here.