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David B. Spence Lekha Gopalakrishnan 53 Vand. L. Rev. 599 (2000) In this Article David Silence and Lekha Gopalakrishnan propose a new understanding of regulatory bargaining. Economists and others have long argued that American regulatory system is unnecessarily inefficient. Critics charge that system is both substantively inefficient, in that it sometimes mandates use of inefficient means for achieving a regulatory goal, and procedurally inefficient, in its over-reliance on rules. These arguments have led to a wave of regulatory reform experiments in federal bureaucracy, many of which seek to promote changes in regulatory policy through bargaining among private- and public-sector stakeholders. As several commentators have noted, most of these regulatory reforms have not met expectations in that bargaining participants often forgo changes in status quo. Those same commentators have offered a variety of explanations for these failures, most of which are either unpersuasive or incomplete. Silence and Gopalakrishnan propose an another explanation drawn from standard bargaining literature in economics, one that seems to explain trajectory of recent regulatory reforms. The authors argue that, in context of political conflict over policy changes, participants in these bargaining processes view policy changes in zero-sum terms. That is, they bargain strategically, using their power to veto these changes to extract further policy concessions from other stakeholders. This revelation has important implications for future of this kind of regulatory reform. INTRODUCTION Why is regulation inefficient, and why do regulators forgo obvious opportunities to make it more efficient? This is a familiar lament, one that is heard beyond confines of academic discourse. For example, in a recent best seller,1 Philip Howard explores inability of policymakers to make common sense decisions. Howard places blame for this phenomenon on the law, particularly statutes and rules.2 The evidence he offers in support of his argument is anecdotal, and many of his anecdotes describe failure of governmental actors to take steps that would produce positive-sum changes-that is, changes that would help some without hurting others.3 One such anecdote is story of a proposed donation to New York City of portable public restroom kiosks, a proposal that seemed likely to offer a solution to a vexing public health problem. Though proposed facilities were already road-tested in other large cities and would have cost city nothing,4 they were not wheelchair-accessible and would violate a city anti-discrimination ordinance.5 Ultimately, opposition to proposal led city to refuse donation. Economists have long argued that statutes frequently require less-than-sensible approaches to policy problems.6 This economic critique of regulation has been particularly unrelenting in field of environmental regulation, where economists have criticized barriers to efficient pollution control posed by environmental statutes and regulations. In recent years, arguments like these have spurred (i) calls for reform of environmental regulation by politicians,7 (ii) a series of internal8 and external9 evaluations and reviews of governwent regulatory systems, and (iii) a wave of regulatory reform experiments at Environmental Protection Agency (EPA).10 Indeed, it can be argued that EPA has become national focal point of modern regulatory reform, and that many of EPA's reform experiments have been aimed at overcoming legal or statutory barriers to efficiency. However, regulatory reform is rapidly approaching a crossroads. After more than a half-decade of experiments, pilot projects, and efforts, EPA seems uncertain where to go next. Many of its reinvention programs have stalled or have failed to meet expectations, and Agency seems unable or unwilling to draw larger lessons from its successful experiments. …
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