Aug. 1, 2016
Cass R. Sunstein is a prominent Law & Economics teacher (first at the University of Chicago, then at Harvard). Not only has he written reference handbooks on Regulation, he was also the one who inspired the Regulation policies of Obama. In his 2013 book Simpler, he expresses his stance: to be better, public policies need to be simpler.
In this essay, Sunstein explores how behavorial economics might lead to improve public decision-making processes. He bases its stances upon his experience as the Administrator, from 2009 to 2012, of the US Office of Information and Regulatory Affairs; that is why anyone who cares about Regulation should read it and ask themselves if simplicity, as the author states, may or may not be an actual leading principle for an effective government.
The OIRA, under the supervision of the Office of Management and Budget placed within the Executive Office, reviews the draft Regulations that are prepared by the cabinets of various rulemaking agencies. In this view, the OIRA can be regarded as a sort of custodian of the quality of Regulation throughout the US; conversely to the mainly consultative functions granted to the Conseil d'Etat in France, the OIRA's opinions are binding. Hence, a draft project shall not be issued nor be enforced without its prior consent. Part of OIRA's defining mission is also to centralize all the information held by diverse people within the executive branch, as to enable its access and circulation between all the rulemaking agencies responsible for elaborating and producing binding regulations.
Simpler is dedicated to the detailed study of the main decisions taken under Sunstein's decisive influence by the OIRA in the Regulation field during Obama's first mandate (2009-2012). Before taking up government functions, Sunstein focused part of his academic work on the interactions that are the most likely to occur between behavioral economics, law and public policy. To him, "a general lesson is that small, inexpensive policy initiatives, informed by behavioral economics, can have big benefits" (p. 41). He namely provides that "without a massive reduction in its current functions, government can be far more effective, far less confusing, far less counterproductive, and far more helpful if it opts, wherever it can, for greater simplicity" (p. 11).
This reference to 'simplicity', from which the name of Sunstein's essay stems, aims at translating all the efforts done by public authorities, under the supervision of the OIRA, to issue rules that were clearer and more accessible than before and that provided their subjects (whether they are citizens, companies, or federal administrations) a greater freedom in the choices they were able to make.
Throughout his book and with a little help from the various situations he had to face during his term at the OIRA, Sunstein shows that there is a virtuous relationship between a better information of the agents (whether they are the authors or the subjects of the norms at stake), a greater simplicity in public decision-making process and a better quality of the regulations meilleure qualité de la réglementation in force in a State. This paper hence aims to sum up the main points of the essay (I.), before making a few comments about it (II.).
Feb. 18, 2015
February 17, 2015, as the previous "Contrat de Régulation Économique" (Economie Regulatory Contract), the firm Aéroport de Paris (ADP) has made available on its site to all "for consultation" the draft "Contrat de Régulation Economique ("Economic Regulatory Contract) for the period 2016 -2020.
Published in the wake of the meeting of the Board of ADP, the text is presented as a tool "for the Paris place", especially for air transport.
This shows that the document is primarily intended for investors and financial markets, the document being placed on the company website in the section for the "investors".
This illustrates the evolution from the traditional "contrats de plan" (plan contracts). But then, who are the parties to these types of contract?
Indeed, the very term "Regulatory contract" is new in public Law. It appears as a sort of modernization of "plan contract." The Conseil d'État (French State Council) finally admitted the contractual nature of these planning contracts. In these contracts, are parties were the State and the company in charge of a public service.
Because here the contract is an instrument of "economic regulation" the open public consultation draft rather expresses a global conception of ADP, the company which manages the Paris airports, for the future of the development of critical infrastructure that is the airport as the heart of global development of air transport.
The enterprise manager of the airport in the heart of the contract (rather than the State) in setting objectives for the coming four years is the letter and spirit of the French law of 20 April 2005 about Airports, which put the apparatus of this "Contrat de Régulation Economique" in place.
In this, the infrastructure manager is set by law as a "regulator of second degree", as can be a financial market enterprise. The company that manages and develops the Paris airports undoubtedly belongs to the category of " critical firms", as well it manages the future of the sector and helps to keep France a place in the world.
More, A.D.P. behaves like a Regulator, since it is carrying out the "public consultation", the consultation paper prepared by it, being placed on its site and developing its ambitions for the sector and for France. But A.D.P. also expressed as a financial and economic actor, emphasizing the competitive environment, demanding in passing more stability and clarity in the regulation in which it moves ...
That is why the consultation mechanism provided by the law must be more complex. Indeed, ADP can not be judge and jury. Therefore if the project raises observations, they must be formuled not to ADP but to the Ministries of Aviation and Economy, within a month. They shall communicate theiir content to ADP . Then the Commission consultative aéroportaire (French Airport Consultative Committee) will be consulted. At the end of this process, the "Contrat de Régulation Economique" will be signed.
Seing the end of the process, it remains in line with the plan contracts, since it remains the Economic Regulatory Contract is signed between the State and the essential infrastructure manager. But the consultation process shows firstly investors are the first recipients of the statements made by a privatized company presenting its draft primarily in terms of competitive context and international development and secondly the airlines that use daily services of the airports are also directly involved by theses questions of tarification.
Airlines protest against the increase in the money that will be asked. This will be imposed, since it is tarification and princing public policy. We are in unilateral rules. But it is indeed a "price" they feel to pay, they also heard a speech referring to competition in what the mechanism is presented as a "contract".
But then, does it take to admit that these "contracts for economic regulation" are not between two parties that are the state and the regulator of second degree that is the infrastructure manager but must be three, the State, the infrastructure manager and "stakeholders" that are mainly airlines?
This practical difficulty is much to the fact that the qualification of "contract" is difficult to justify in proceeding in which prevail unilateral mechanisms.
Feb. 12, 2015
In France, the decrees adopted February 10, 2015 for the implementation of the "rail reform" illustrates the willingness of the Government to decide alone, the advisory role of the regulator remaining marginal
There is no point in counting one by one the powers of a Regulator and add them to try to measure its power. We must measure what consideration the others have of the exercise of its powers it.
So it is with its advice power. Sometimes, in fact, its opinion is worth as much as if it adopted the text itself, as those who read its comments are impressed. Sometimes, the Regulator may have taken a rational opinion, motivated and relevant, those to whom it is addressed don't care.
The result is often that the Regulator takes note of this weakness against which strictly within the framework of this opinion mechanism the regulatory body can do nothing, but in a continuation of powers between the Ex Ante and the Ex post, because the area is an enclosed space, the diverse attitudes will be remembered, especially when the Regulator will be exercising its powers to resolve disputes or its power of sanctions. And there ...
Take the example of railway activities. The French Regulatory Authority of Railway Activities (Autorité de Régulation des Activités Ferroviaires - ARAF )) is a new regulator, in front of powerful actors, where the State has interests. The fact that these interests are legitimate don't remove the weight that such integrated public operator is facing the regulator. On 27 November 2014, ARAF expressed negative opinions about the main draft decrees. January 6, 2015, the Autorité de la Concurrence (French Competition Authority) has also made a critical opinion, including in its discontent and the law of "Railway Reform" and the draft decrees.
February 11, 2015, 7 decrees implementing the February 10, 2015 have been published. Adverse opinion on three of them by the regulator (ARAF) were swept away. We can admit quite, both regarding the Competition Authority opinion, since we are in terms of regulation and not in the simple competition system, and about ARAF opinion because its opinion is only a consultative and executive power remains in line with the will of Parliament. It's almost as if the Regulator had not said a word.
Thus, under the hierarchy of norms, in the letter and in spirit, the decrees are in line with the law they enforce. No blame.
But it is not excluded that the regulator of rail activities can remember of having been so little after, when it must be considered as a kind of judge in civil functions (dispute resolution) and in punitive functions (sanctions) that almost the same will appear before the regulatory body.
Updated: Dec. 20, 2011 (Initial publication: Dec. 20, 2011)
Thesaurus : Doctrine