When the U.S. Small Business Administration issued a study last September claiming regulations cost the U.S. economy $1.75 Trillion in a single year, the agency trumpeted that the "report was peer reviewed consistent with the Office of Advocacy’s data quality guidelines."
But the peer review file included with the study was embarrassingly meager -- comments from all of two individuals. The authors, economists Nicole Crain and Mark Crain, ignored a fundamental criticism raised by one of the two reviewers that struck at the very heart of their estimates of economic regulatory costs. The second reviewer's complete comment had the sort of casual quality to it that suggested a somewhat less than thorough review. The review, in its entirety: “I looked it over and it's terrific, nothing to add. Congrats."
When CPR Member Scholars issued a report in February critiquing SBA's study, they noted that the peer-review process was unimpressive. CPR co-author Sidney Shapiro sent a letter at the time to Karen Mills, the SBA Administrator, and Dr. Winslow Sargeant, Chief Counsel of the SBA's Office of Advocacy, calling on the SBA to withdraw the study and disavow its findings. The letter noted, among other problems, the inadequate peer review.
Dr. Sargeant responded with a letter in March, standing by the report and waving off the CPR report’s very thorough criticisms, although without responding to the specifics. There was perhaps little of particular surprise, except one bit about the peer review process. Wrote Sargeant:
Advocacy offered the study for review to a number of individuals with expertise in regulatory cost-benefit analysis, including former heads of Federal regulatory agency economic analysis offices and academics who have published in the field.
For Dr. Sargent, it was apparently just a minor detail that only two peer reviewers responded, as far as anyone knows, and one of the two peer reviewers took issue with the core methodology and the other devoted all of 11 words to a review. Today Shapiro wrote back to SBA, noting that while SBA apparently regards silence as an endorsement by peer reviewers, CPR does not.
Shapiro also reiterated one of the primary criticisms from CPR: the public does not have access to the data, equations, assumptions, extrapolations, and calculations that are necessary to understand and verify the methodologies, data, and assumptions that were employed in report. Shapiro calls on SBA to withdraw its sponsorship of the report until the agency makes the full methodologies, data, and assumptions available to the public, allowing the study to be replicated.
The SBA study, remember, was not privately funded; this was taxpayer dollars at work. The public deserves an explanation.
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Ben Somberg | April 6, 2011
When the U.S. Small Business Administration issued a study last September claiming regulations cost the U.S. economy $1.75 Trillion in a single year, the agency trumpeted that the "report was peer reviewed consistent with the Office of Advocacy’s data quality guidelines." But the peer review file included with the study was embarrassingly meager — comments […]
Holly Doremus | April 5, 2011
Cross-posted from Legal Planet. EPA has announced that it will delay finalizing its guidance memorandum on Clean Water Act permitting for mountaintop removal mining projects pending review by the White House Office of Management and Budget. The announcement is bad news for Appalachian streams, and worse news for environmental interests hoping the Obama administration won’t […]
Daniel Farber | April 4, 2011
Cross-posted from Legal Planet. I’m beginning to wonder whether we need an “Endangered People Act” to ensure that the most vulnerable get the protection they need from climate change impacts. Climate change will disproportionately affect vulnerable individuals and poorer regions and countries, as I discuss in a recent paper comparing adaptation efforts in China, England, […]
Holly Doremus | April 1, 2011
Cross-posted from Legal Planet. As Rick noted earlier, the Ninth Circuit is now the fifth federal circuit court of appeals to reject a Commerce Clause challenge to the ESA. In San Luis & Delta-Mendota Water Authority v. Salazar, a Ninth Circuit panel upheld protection of the Delta smelt. I agree with Rick’s analysis of the […]
Sidney A. Shapiro | March 30, 2011
Last week, the White House’s Office of Information and Regulatory Affairs (OIRA) approved a survey to be conducted for the Occupational Safety and Health Administration (OSHA) as part of the agency's efforts to develop an Injury and Illness Prevention Program (I2P2) standard. Surveys, like this one, have to be approved by OIRA according to the Paperwork […]
Ben Somberg | March 29, 2011
CPR Member Scholar Robert Glicksman testifies at a hearing this afternoon on “Raising the Agencies’ Grades – Protecting the Economy, Assuring Regulatory Quality and Improving Assessments of Regulatory Need.” The hearing will be held by the Courts, Commercial and Administrate Law subcommittee of the House Judiciary Committee. The hearing will feature two witnesses from the […]
Amy Sinden | March 29, 2011
Around 6pm ET last night, after most reporters had wrapped up, EPA issued its long-awaited proposed cooling water rule. Under the Clean Water Act, this rule is supposed to protect the billions of fish and other aquatic organisms that are killed each day when they are squashed against intake screens or sucked up into cooling water […]
Matthew Freeman | March 25, 2011
One hundred years ago today, 146 people perished in one of the nation’s worst workplace tragedies – the Triangle Shirtwaist Factory Fire in the heart of New York City. The story is gruesome, and each detail of exactly how so many people were trapped in a burning building was, and remains, a reminder of what […]
Douglas Kysar | March 24, 2011
A report yesterday from Inside EPA offered a fascinating overview of the agency’s struggle to update the way it assigns dollar values to the suffering and premature death that its regulations prevent. Seriously, as far as economic esoterica goes, this stuff is riveting. What’s more, your life may depend on it. Currently, EPA values each statistical human […]