Confronting Regulatory Cost and Quality Expectations: An Exploration of Technical Change in Minimum Efficiency Performance Standards

Expectations about technological change are central to the way policy details are set in a variety of complex public problem areas, including health, welfare, safety, and environmental protection. These details are established through a regulatory process designed to incorporate scientific, technical, economic, and other expertise while following principles of good governance such as transparency, analytical rigor, and the appropriate treatment of uncertainty. An important element of most U.S. federal regulatory processes is cost-benefit analysis, which is expected to employ “best-available” techniques that identify “changing future compliance costs that might result from technological innovation or anticipated behavioral changes (OMB 2011). Influential calls for the reform of regulatory analysis, however, locate the appropriate modeling of technological change “at the frontier of economic research.” (Harrington, Heinzerling et al. 2009).