Regulatory Reform: Challenges in Origination

By Jessica Huey • January 15, 2014

This post is part of the Regulatory Reform for the 21st Century City project.

As an increasing number of municipalities embark on various regulatory reform efforts, it's important to take a step back and ask a simple but important question: why do we regulate in the first place? As part of the Regulatory Reform Project for the 21st Century, this blog post will identify some of the challenges facing the regulatory environment at the local level.

In any given city government there are countless regulations in place with many others passed on a regular basis. At the most basic level, regulations are created in order to guarantee transparency or to help address market failures. Regulations - in the form of constitutions, statues, legislation, and rules - are utilized by city authorities to change behaviors in order to produce desired outcomes. While some argue that regulations are burdensome, well-crafted regulations have the potential to help create a safe, affordable, and productive urban setting for citizens to live, work, and grow businesses.

The regulatory process as a whole can be separated into four main stages: origination, review, processing, and enforcement. Each of these stages presents unique challenges to a city’s ability to balance promoting economic growth with ensuring the preservation of the public’s health and safety.

Often the first challenge with this process is in the origination stage as cities determine which activities should be regulated. Once these activities are identified, city authorities need to ask themselves: are there already existing regulations in place? Should existing regulations be modified? Or, does a new regulation need to be created – and if so, how?

More often than not, this process is relatively informal or ad hoc. This process is also greatly influenced by special interest groups lobbying for change, particularly when the creation of any new regulation is being considered. The recent attempts to regulate ridesharing services have resulted in companies like Lyft and Uber hiring lobbyists to help drive expansion, while local taxi association leaders have organized numerous protests in response. As a result, as cities like Seattle tackle the issue of creating regulations for ridesharing, there has been a heated political battle over the outcome.

Once regulations are in place, there are additional challenges as cities attempt to create a review process for existing regulations. When regulations have worn out their value and impede, rather than enable, how do political leaders streamline or remove them? While some cities have implemented task forces to address regulatory review, this process usually falls low on the political agenda and is easy to dismiss, leaving cities to accumulate regulations without any structured monitoring.

A politicized origination process coupled with limited monitoring leaves many cities with a cumbersome and sometimes expensive regulatory process that does not efficiently achieve its original purpose. Most regulations require cities to issue permits and licenses, requiring multiple departmental reviews and sign offs, leading to processes that hinder both job attainment and creation. At the very end of this process, the challenge remains: how do city leaders ensure compliance with these regulations?

While regulatory processes have always been complicated, they will continue to have a place in cities to preserve the economic, social, and environmental controls of good governance. Through the course of the Regulatory Reform Project for the 21st Century’s research, we intend to explore each of these stages in more detail in order to identify trends and best practices for how city authorities are proactively and creatively addressing regulatory challenges in their cities.

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About the author

Jessica Huey

Jessica Huey is a MPP candidate at the Harvard Kennedy School of Government. Prior to attending the Kennedy School, Jessica spent five years working for the City & County of San Francisco focusing on workforce development initiatives and labor negotiations. Jessica got her start with the City & County of San Francisco as a member of the inaugural class of City Hall Fellows, a year-long fellowship program in local government. Jessica received a BA from Brown University with a double major in Public Policy and Hispanic Studies. Her current research interests include civic innovation at the local level, public-private partnerships, and economic development.