Sludge and Ordeals

Is there an argument for behaviorally informed deregulation? In 2015, the United States government imposed 9.78 billion hours of paperwork burdens on the American people. Many of these hours are best categorized as “sludge,” understood as friction, reducing access to important licenses, programs, and benefits. Because of the sheer costs of sludge, rational people are effectively denied life-changing goods and services. The problem is compounded by the existence of behavioral biases, including inertia, present bias, and unrealistic optimism. A serious deregulatory effort should be undertaken to reduce sludge through automatic enrollment, greatly simplified forms, and reminders. At the same time, sludge can promote legitimate goals. First, it can protect program integrity, which means that policymakers might have to make difficult tradeoffs between (1) granting benefits to people who are not entitled to them and (2) denying benefits to people who are entitled to them. Second, it can overcome impulsivity, recklessness, and self-control problems. Third, it can prevent intrusions on privacy. Fourth, it can serve as a rationing device, ensuring that benefits go to people who most need them. Fifth, it can help public officials to acquire valuable information, which they can use for important purposes. In most cases, however, these defenses of sludge turn out to be far more attractive in principle than in practice. For sludge, a form of cost-benefit analysis is essential, and it will often demonstrate the need for a neglected form of deregulation: sludge reduction. For both public and private institutions, “Sludge Audits” should become routine, and they should provide a foundation for behaviorally informed deregulation. Various suggestions are offered for new action by the Office of Information and Regulatory Affairs, which oversees the Paperwork Reduction Act; for courts; and for Congress

We Must All Hang Together ...

At the signing of the Declaration of Independence on July 4, 1776, Benjamin Franklin reportedly quipped We must all hang together, or assuredly we shall all hang separately . In this bicentennial year, it seems appropriate to provide the following visual confirmation of Franklin\u27s words

On the Costs and Benefits of Aggressive Judicial Review of Agency Action

In this essay, the author undertakes three tasks. The first is to describe some of the difficulties of defining benefits in the setting of judicial review of administrative action. The second task is to offer reasons, though tentative and largely anecdotal ones, for an affirmative answer to the question whether aggressive judicial review has produced net benefits. At the very least, the author suggests, aggressive judicial review has had significant benefits in many settings. The third and final task is to outline some proposals by which to increase the benefits, and decrease the risks, of an aggressive judicial posture in administrative law

Competitive Equilibrium with Incomplete Financial Markets

This is my classic paper, written in early 1984, concerning existence and optimality in general financial equilibrium with incomplete markets for nominal assets, just now being published in a special issue of the Journal of Mathematical Economics.financial equilibrium, incomplete markets, Cass trick

Lead as a tracer for automotive particulates: projecting the sulfate air quality impact of oxidation catalyst-equipped cars in Los Angeles

An analysis of the fate of lead in the Los Angeles Basin is used to evaluate an emissions to air quality model for automotive exhaust particulates. The dispersion model is then applied to projecting the annual average sulfate air quality impact of direct sulfuric acid mist emissions from oxidation catalyst-equipped cars of the 1975 model type. Estimates are given of the incremental sulfate contributions from three model years of oxidation catalyst-equipped cars burning a relatively low sulfur gasoline, and from roughly ten model years of 1975-type autos burning gasoline of sulfur content equal to that of the entire 1974 Southern California gasoline pool. In the latter case, sulfate concentrations in portions of downtown Los Angeles in 1985 could be elevated by roughly two thirds above present average sulfate values