Will Sunstein Substitute Information for Regulation?
by Matthew Madia, 4/10/2009
Grist, the environmental news website, has posted an interview with Cass Sunstein, President Obama’s supposed pick to lead the White House Office of Information and Regulatory Affairs (OIRA).
Sunstein mostly talks about his latest book (written with co-author Richard Thaler) Nudge: Improving Decisions About Health, Wealth, and Happiness. “A nudge is a small change in the social context that makes behavior very different without forcing anyone to do anything,” Sunstein says. (The interview occurred before Sunstein was tapped for OIRA.)
As head of OIRA, Sunstein would have a platform to implement his idea that good behavior should be incentivized through social structures, not necessarily forced by government edicts. (He and Thaler call it “libertarian paternalism.”) OIRA is an office with great power. It reviews drafts of proposed and final regulations before they are released to the public. Regulatory agencies develop their regulations in a way that will please OIRA or risk having them altered, delayed, or rejected entirely.
In Sunstein’s view, government regulations and programs can themselves be nudges. For example, Sunstein is a vocal proponent of a greenhouse gas registry (currently under development via an Environmental Protection Agency regulation) which would require emitters to report their emissions to a publicly available source like a website. “That’s a big nudge, because then you’re kind of a national villain.” Sounds good – a web-induced shame-fest could be the 21st Century solution to the Tragedy of the Commons. (What two things capture the zeitgeist better than the Internet and public embarassment?)
But then he goes on to say, “We think that publicity about who’s contributing to the problem would go a significant way towards reducing greenhouse gas emissions all by itself.” Should we be concerned that Sunstein will favor these kinds of information disclosures as a substitute for the more traditional kinds of regulatory programs that ensure public health and safety?
As we pointed out a few weeks back, a greenhouse gas registry is a necessary first step the government must take to address global warming. But other steps, whether it’s cap-and-trade, energy efficiency, land use changes, or something else, must follow.
As captain of the White House’s regulatory ship, Sunstein would be able to steer the course of those policies or, if he so chose, never let them out of the harbor.
Of course, Sunstein has yet to be officially nominated. Even though news of his nomination first surfaced more than three months ago, the White House has yet to send his paperwork up to Congress. Meanwhile, Sunstein is already working in the White House as an advisor to OMB Director Peter Orszag, according to Bloomberg news.