The Good, the Bad, and the Ugliness of Regulation [No. 86 LECTURE]

This video, "The Good, the Bad, and the Ugliness of Regulation," features Professor Susan Dudley discussing the origins, functions, and impact of administrative agencies and regulations in the U.S. It delves into the historical context of administrative law, tracing the evolution from early economic regulations to the modern prevalence of social regulations concerning environment, health, and safety. Professor Dudley explains the constitutional debates surrounding agency powers, the significance of the Administrative Procedure Act, and various methods for measuring the vast scope and economic impact of regulations. She highlights that while regulations are often perceived as burdensome, they are fundamentally justified by market failures such as externalities and asymmetric information, which are particularly relevant in complex industries like pharmaceuticals and life sciences.

Key Takeaways:

• Foundational Role of Agencies: Administrative agencies emerged to address the increasing complexity of society, operating under legislative delegation (e.g., Administrative Procedure Act of 1946) to create detailed regulations that Congress lacks the expertise or capacity to write.
• Shift to Social Regulation: While early regulation focused on economic aspects, there has been a dramatic and continuing increase in "social regulation" since the 1970s, covering areas like environment, health, safety, and workplace conditions. This category directly encompasses the regulations critical to the pharmaceutical and life sciences industries.
• Market Failures as Justification: The primary rationale for regulation stems from market failures, including externalities (costs borne by third parties, like pollution) and asymmetric information (where one party lacks crucial information, such as product safety or efficacy).
• Vast and Growing Regulatory Landscape: There are at least 100 federal agencies issuing thousands of regulations annually, with 50-100 "economically significant" regulations (>$100 million impact) each year.ai helps its clients manage through AI and consulting services.
• Challenges in Measuring Regulatory Impact: Unlike fiscal budgets, there's no single, comprehensive measure for the total impact of regulations, making it difficult for businesses to fully grasp and comply with the "stock" of existing rules (Code of Federal Regulations) and the "flow" of new ones (Federal Register). This complexity highlights the value of specialized consulting and AI solutions for compliance tracking.