Regulatory Auditing at the Office of Information and Regulatory Affairs

Abstract: The Office of Information and Regulatory Affairs (OIRA), in the Office of Management and Budget, is the locus for centralized presidential efforts to control agency rulemaking. To do so, OIRA selectively audits and then orders revision of the regulations proposed by agencies. To analyze OIRA's auditing decision we begin by formally modeling its strategic problem. The model distinguishes situations when cost-benefit analysis speaks definitely and thus constrains the scope for ideology, from those in which it is somewhat ambiguous and thus fails to constrain ideology. In such cases, liberal agencies may be eager regulators and conservative agencies reluctant ones. Auditing strategies for liberal and conservative presidents should reflect these tendencies. The model also identifies agency responses to auditing regimes: "deterrence" and "chilling" effects on the production of regulations but also "stimulative" effects. We then assemble data on 20,279 proposed rules promulgated by 35 agencies from 1995-2010. Under Bush, OIRA's average of 278 audits per year disproportionately targeted regulations from liberal agencies, particularly intrusive regulations from those agencies. Under Clinton, OIRA's average of 296 audits per year did not display ideological targeting. Similarly, under Obama, OIRA's 95 audits per year displayed no ideological targeting.