Modernizing Federal Regulatory Review

For the last two years, Jennifer Nou has lent her administrative law expertise to the White House’s Office of Information and Regulatory Affairs for this key project.

Jennifer Nou

On his first day in office, President Biden issued a memorandum calling for the modernization of regulatory review—a process that is critical to effective policymaking. Among other things, regulatory review helps ensure that policies are crafted with the best interest of the public in mind. After all, regulations impact our daily lives in countless ways that we often do not realize. They are integral to the fabric of American society.

But while every regulation has benefits, it also has costs. That is what cost-benefit analysis in the regulatory review process aims to identify and evaluate. Cost-benefit analysis assesses whether the advantages broadly justify the costs of a regulation. Yet the guidelines (called Circular A-4) that help inform this important analysis have not been updated since 2003.

“Needless to say, a lot has changed in twenty years,” said Jennifer Nou, the Ruth Wyatt Rosenson Professor of Law. “One of the overarching goals of this reform is to reflect the latest developments in scientific and economic understandings. There are new developments, for instance, that can help us better quantify benefits—which tend to be more difficult to quantify than costs—or discuss benefits and costs qualitatively. Take disability regulations. They have huge impacts on human dignity, right? Human dignity is challenging to monetize or quantify, but it can still be important for agencies to consider.”

“One of the overarching goals of this reform is to reflect the latest developments in scientific and economic understandings.”

Jennifer Nou

Nou has spent the last two years working as a senior advisor in the White House’s Office of Information and Regulatory Affairs (OIRA), lending her expertise to the day-to-day operations of regulatory review for some agencies and to implementation of the Modernizing Regulatory Review order issued by the president. She has been involved in almost every aspect of the modernizing project, from the implementation and drafting of guidance under President Biden’s day one memorandum and executive order, to efforts to improve regulatory analysis, to helping to broaden public participation in the meetings OIRA holds with the public during regulatory review.

Nou is not new to OIRA, which is a subset of the Office of Management and Budget within the Executive Office of the President. She was there ten years ago under the Obama administration as a policy analyst and specialist assistant to the then administrator, Cass Sunstein, who also was a former and long-serving faculty member of the Law School. During that time, Nou worked on a number of projects, including efforts to improve retrospective review, a process designed to identify the actual rather than expected effects of regulations and to reassess accordingly.

Nou previously clerked on the Seventh Circuit with Judge Richard Posner, a legend in law and economics and a senior lecturer at the Law School, now retired. She valued that opportunity for many reasons, among which was the opportunity to discuss Posner’s extensive work on cost-benefit analysis, a research interest they both shared.

“In economics you’re often simplistically told that there’s a trade-off between efficiency and equality,” Nou said, “that economists should just focus on efficiency and that only politicians and philosophers should focus on equality and distribution. But looking at these concepts in practice, I think the concept of efficiency can also be very philosophical, not just technocratic, while distributional concerns should be of importance to economists as well.”

Helping agencies consider and think more broadly about distributional consequences is indeed another goal of the regulatory review modernization project. In designing regulations, Nou says it is important to recognize that the consequences of regulations and policies can have different effects on different groups. The diminishing marginal utility of income, for instance, where an extra dollar means more to a low-income person than to a high earner, can mean that distributional considerations should make a difference in the outcome of a regulation.

K. Sabeel Rahman, who is currently a professor of law at Cornell University Law School and was previously the associate administrator at OIRA, is the person who recruited Nou for her government role. “Professor Nou’s ability to think both blue-sky and practically, both in terms of values and data, and in terms of ideas and people, made her a critical part of the team,” he said.

Richard Revesz, the current administrator at OIRA, echoes Rahman’s sentiments about Nou: “She has both a clear vision and the organizational ability to do the painstaking tasks necessary to move the work forward effectively, which is a truly rare combination. Her exceptional work is absolutely indispensable to OIRA’s institutional success.”

Nou wrapped up her time at OIRA in February, taking with her many insights that have inspired new research ideas and new ways of teaching administrative law. “I think administrative law is often taught as very court-centered, and without as much due focus on the executive branch,” she said. “This experience has given me an even greater appreciation for the many players and stakeholders who are involved in regulatory review, particularly for government institutions like OIRA. I continue to remain impressed by how substantive and deliberative the regulatory review process is, and how many different perspectives are brought to bear on the rules that come through for review.”

Nadia Alfadel Coloma is the Associate Director of Content at the Law School.