Showing papers by "Cass R. Sunstein published in 2014"

Nudging: A Very Short Guide

Abstract: This brief essay offers a general introduction to the idea of nudging, along with a list of 10 of the most important “nudges.” It also provides a short discussion of the question whether to create some kind of separate “behavioral insights unit,” capable of conducting its own research, or instead to rely on existing institutions.

Why Nudge?: The Politics of Libertarian Paternalism

Abstract: The bestselling author of Simpler offers a powerful, provocative, and convincing argument for protecting people from their own mistakes Based on a series of pathbreaking lectures given at Yale University in 2012, this powerful, thought-provoking work by national best-selling author Cass R. Sunstein combines legal theory with behavioral economics to make a fresh argument about the legitimate scope of government, bearing on obesity, smoking, distracted driving, health care, food safety, and other highly volatile, high-profile public issues. Behavioral economists have established that people often make decisions that run counter to their best interests-producing what Sunstein describes as "behavioral market failures." Sometimes we disregard the long term; sometimes we are unrealistically optimistic; sometimes we do not see what is in front of us. With this evidence in mind, Sunstein argues for a new form of paternalism, one that protects people against serious errors but also recognizes the risk of government overreaching and usually preserves freedom of choice. Against those who reject paternalism of any kind, Sunstein shows that "choice architecture"-government-imposed structures that affect our choices-is inevitable, and hence that a form of paternalism cannot be avoided. He urges that there are profoundly moral reasons to ensure that choice architecture is helpful rather than harmful-and that it makes people's lives better and longer.

Particulate Matter Matters

Abstract: Quasi-experimental evidence is needed on the relations between human health and airborne particulate matter.

Nudging: A Very Short Guide

Abstract: This brief essay offers a general introduction to the idea of nudging, along with a list of ten of the most important “nudges.” It also provides a short discussion of the question whether to create some kind of separate “behavioral insights unit,” capable of conducting its own research, or instead to rely on existing institutions.

Automatically Green: Behavioral Economics and Environmental Protection

Abstract: Careful attention to choice architecture promises to open up new possibilities for environmental protection – possibilities that go well beyond, and that may be more effective than, the standard tools of economic incentives, mandates, and bans. How, for example, do consumers choose between environmentally-friendly products or services and alternatives that are potentially damaging to the environment but less expensive? The answer may well depend on the default rule. Indeed, green default rules may well be a more effective tool for altering outcomes than large economic incentives. The underlying reasons include the power of suggestion; inertia and procrastination; and loss aversion. If well-chosen, green defaults are likely to have large effects in reducing the economic and environmental harms associated with various products and activities. Such defaults may or may not be more expensive to consumers. In deciding whether to establish green defaults, choice architects should consider both consumer welfare and a wide range of other costs and benefits. Sometimes that assessment will argue strongly in favor of green defaults, particularly when both economic and environmental considerations point in their direction. But when choice architects lack relevant information, when interest-group maneuvering is a potential problem, and when externalities are not likely to be significant, active choosing, perhaps accompanied by various influences (including provision of relevant information), will usually be preferable to a green default.

Disclosure: Psychology Changes Everything

Abstract: We review literature examining the effects of laws and regulations that require public disclosure of information. These requirements are most sensibly imposed in situations characterized by misaligned incentives and asymmetric information between, for example, a buyer and seller or an advisor and advisee. We review the economic literature relevant to such disclosure and then discuss how different psychological factors complicate, and in some cases radically change, the economic predictions. For example, limited attention, motivated attention, and biased assessments of probability on the part of information recipients can significantly diminish, or even reverse, the intended effects of disclosure requirements. In many cases, disclosure does not much affect the recipients of the information but does significantly affect the behavior of the providers, sometimes for the better and sometimes for the worse. We review research suggesting that simplified disclosure, standardized disclosure, vivid disclosure, and ...

The Ethics of Nudging

Abstract: This essay defends the following propositions. (1) It is pointless to object to choice architecture or nudging as such. Choice architecture cannot be avoided. Nature itself nudges; so does the weather; so do spontaneous orders and invisible hands. The private sector inevitably nudges, as does the government. It is reasonable to object to particular nudges, but not to nudging in general. (2) In this context, ethical abstractions (for example, about autonomy, dignity, and manipulation) can create serious confusion. To make progress, those abstractions must be brought into contact with concrete practices. Nudging and choice architecture take diverse forms, and the force of an ethical objection depends on the specific form. (3) If welfare is our guide, much nudging is actually required on ethical grounds. (4) If autonomy is our guide, much nudging is also required on ethical grounds. (5) Choice architecture should not, and need not, compromise either dignity or self-government, though imaginable forms could do both. (6) Some nudges are objectionable because the choice architect has illicit ends. When the ends are legitimate, and when nudges are fully transparent and subject to public scrutiny, a convincing ethical objection is less likely to be available. (7) There is, however, room for ethical objections in the case of well-motivated but manipulative interventions, certainly if people have not consented to them; such nudges can undermine autonomy and dignity. It follows that both the concept and the practice of manipulation deserve careful attention. The concept of manipulation has a core and a periphery; some interventions fit within the core, others within the periphery, and others outside of both.

Constitutionalism and Secession

Abstract: The Soviet Constitution guarantees a right to secede. The American Constitution does not. Although some secessionists in the American South, invoking state sovereignty, claimed to find an implicit right to secede in the founding document, it was more common to invoke an extratextual and nonjusticiable "right to secede" said to be enshrined in the Declaration of Independence. In any case, no serious scholar or politician now argues that a right to secede exists under American constitutional law. It is generally agreed that such a right would undermine the Madisonian spirit of the original document, one that encourages the development of constitutional provisions that prevent the defeat of the basic enterprise. Eastern European countries are now deciding about the contents of proposed constitutions. They are often doing so in the context of profound cultural and ethnic divisions, both often defined at least roughly in territorial terms. These divisions have propelled claims for local self-determination that could readily be transformed into attempts to guarantee a right to secede or even into secession itself. In Eastern Europe in particular, debates over the right to secede have already played an extraordinarily important role in discussions of new institutional arrangements. Various political actors have vigorously asserted a right to secede in Yugoslavia, the Soviet Union, and the Czech and Slovak Republics. Active secession movements have played a central role in current efforts to establish democratic governance. Such movements have led to claims for a constitutional right to secede, paralleling the Soviet right but to be respected in practice. A draft of the Slovak constitution, for example, creates a right to secede. It is likely that these claims will be asserted all the more vigorously in the future. The claims for secession, or for a right to secede, raise exceptionally large questions about the theory and practice of constitutionalism. It is therefore an especially important time to explore the relationship between secession claims and constitutionalism in general. My principal claim in this essay is that whether or not secession might be justified as a matter of politics or morality, constitutions ought not to include a right to secede. To place such a right in a founding document would increase the risks of ethnic and factional struggle; reduce the prospects for compromise and deliberation in government; raise dramatically the stakes of day-to-day political decisions; introduce irrelevant and illegitimate considerations into those decisions; create dangers of blackmail, strategic behavior, and exploitation; and, most generally, endanger the prospects for long-term self-governance. Constitutionalism, embodying as it does a set of precommitment strategies, is frequently directed against risks of precisely this sort. Political or moral claims for secession are frequently powerful, but they do not justify constitutional recognition of a secession right. The principal argument for recognition of a right to secede is that it would operate as a powerful deterrent to oppressive and discriminatory practices, and also serve as an effective remedy for these practices. Usually, however, these goals can be promoted through other, more direct means. If they cannot be, a negotiated agreement embodying secession or a right of revolution-also not recognized in founding texts-is a preferable safeguard. The opportunity for a negotiated agreement or a right of revolution would provide a remedy against most of the relevant abuses without raising the continuous risks to self-government that would be created by a constitutional right to secede. In the process of making this argument, I hope also to disentangle the various possible grounds for a moral claim to secession and to indicate which of those grounds have force in different contexts. Some of the discussion will provide support for the view that secession is often justified as a matter of political morality. In such cases I argue against national efforts to stop secession through military or other action. In Part I, I discuss constitutions as precommitment strategies, designed to foreclose debate over certain fundamental questions. These strategies should often be seen as enabling rather than constraining, that is, as devices not only for limiting government, but also for facilitating the difficult process of self-government. This argument has powerful roots in the American constitutional tradition and applies with particular force in the context of secession. The argument also has general implications for the theory of what does and does not belong in constitutions. This theory remains in a surprisingly primitive state, and I will venture some preliminary remarks on the subject. In Part II, I discuss reasons why a subunit of a nation might want to secede, and provide a brief assessment of those reasons as a matter of political morality. My conclusion is that those reasons often create a strong moral claim for secession. Even when this is so, however, the creation of a right to secede in a founding document is usually unjustified. Part III discusses qualified rights to secession, arguing that even though these are superior to a general right of exit for subunits, they are inferior to an across-the-board waiver of that right by all subunits in a nation.

Assessing Punitive Damages...

Abstract: This essay reports and discusses the implications of an experimental study involving punitive damage awards. The study finds that in products liability cases, people's normative judgments (about outrageousness and appropriate punishment) are relatively uniform, at least when measured on a bounded numerical scale (0 to 6). With the unbounded dollar scale, however, outcomes become extremely erratic and unpredictable. Various reform proposals, designed to overcome erratic awards, are discussed, including damage caps, compensatory judgment "multipliers," and conversion formulas based on jury judgments on a bounded numerical scale. Implications are also discussed for many other issues of law and economic valuation, including compensatory damages in such areas as pain and suffering, libel, sexual harassment and other civil rights violations, contingent valuation, and intentional infliction of emtional distress.

Choosing Not to Choose

Abstract: Choice can be an extraordinary benefit or an immense burden. In some contexts, people choose not to choose, or would do so if they were asked. For example, many people prefer not to make choices about their health or retirement plans; they want to delegate those choices to a private or public institution that they trust (and may well be willing to pay a considerable amount for such delegations). This point suggests that however well-accepted, the line between active choosing and paternalism is often illusory. When private or public institutions override people’s desire not to choose, and insist on active choosing, they may well be behaving paternalistically, through a form of choice-requiring paternalism. Active choosing can be seen as a form of libertarian paternalism, and a frequently attractive one, if people are permitted to opt out of choosing in favor of a default (and in that sense not to choose); it is a form of nonlibertarian paternalism insofar as people are required to choose. For both ordinary people and private or public institutions, the ultimate judgment in favor of active choosing, or in favor of choosing not to choose, depends largely on the costs of decisions and the costs of errors. But the value of learning, and of developing one’s own preferences and values, is also important, and may argue on behalf of active choosing, and against the choice not to choose. For law and policy, these points raise intriguing puzzles about the idea of “predictive shopping,” which is increasingly feasible with the rise of large data sets containing information about people’s previous choices. Some empirical results are presented about people’s reactions to predictive shopping; the central message is that most (but not all) people reject predictive shopping in favor of active choosing.

Valuing Life: Humanizing the Regulatory State

Abstract: The Office of Information and Regulatory Affairs (OIRA) is the nation's regulatory overseer. In Valuing Life, Cass R. Sunstein draws on his firsthand experience as the Administrator of OIRA from 2009 to 2012, to argue that we can humanize regulation - and save lives in the process. As OIRA Administrator, Sunstein oversaw regulation in a broad variety of areas, including national security, immigration, energy, environmental protection, and education. This background allows him to describe OIRA and how it works - and how it can work better - from an on-the-ground perspective. Using real-world examples, many of them drawn from today's headlines, Sunstein makes a compelling case for improving cost-benefit analysis, a longtime cornerstone of regulatory decision-making in this country, and for taking account of variables that are hard to quantify, such as dignity and privacy. He also shows how regulatory decisions about health, safety, and life itself can benefit from taking into account behavioral and psychological studies, including new findings about what scares us, and what does not. By better accounting for people's fallibility, Sunstein argues, we can create regulation that is simultaneously more human and more likely to achieve its goals. In this highly readable synthesis of insights from law, policy, economics, and psychology, Sunstein breaks down the intricacies of the regulatory system and offers a new way of thinking about regulation that incorporates human dignity.

Choosing not to choose.

Abstract: Choice can be an extraordinary benefit or an immense burden. In some contexts, people choose not to choose, or would do so if they were asked. In part because of limitations of "bandwidth," and in part because of awareness of their own lack of information and potential biases, people sometimes want other people to choose for them. For example, many people prefer not to make choices about their health or retirement plans; they want to delegate those choices to a private or public institution that they trust (and may well be willing to pay a considerable amount to those who are willing to accept such delegations). This point suggests that however well accepted, the line between active choosing and paternalism is often illusory. When private or public institutions override people's desire not to choose and insist on active choosing, they may well be behaving paternalistically, through a form of choice-requiring paternalism. Active choosing can be seen as a form of libertarian paternalism, and a frequently attractive one, if people are permitted to opt out of choosing in favor of a default (and in that sense permitted not to choose); it is a form of nonlibertarian paternalism insofar as people are required to choose. For both ordinary people and private or public institutions, the ultimate judgment in favor of active choosing, or in favor of choosing not to choose, depends largely on the costs of decisions and the costs of errors.

The Ethics of Nudging

Abstract: This essay defends the following propositions. (1) It is pointless to object to choice architecture or nudging as such. Choice architecture cannot be avoided. Nature itself nudges; so does the weather; so do spontaneous orders and invisible hands. The private sector inevitably nudges, as does the government. It is reasonable to object to particular nudges, but not to nudging in general. (2) In this context, ethical abstractions (for example, about autonomy, dignity, and manipulation) can create serious confusion. To make progress, those abstractions must be brought into contact with concrete practices. Nudging and choice architecture take diverse forms, and the force of an ethical objection depends on the specific form. (3) If welfare is our guide, much nudging is actually required on ethical grounds. (4) If autonomy is our guide, much nudging is also required on ethical grounds. (5) Choice architecture should not, and need not, compromise either dignity or self-government, though imaginable forms could do both. (6) Some nudges are objectionable because the choice architect has illicit ends. When the ends are legitimate, and when nudges are fully transparent and subject to public scrutiny, a convincing ethical objection is less likely to be available. (7) There is, however, room for ethical objections in the case of well-motivated but manipulative interventions, certainly if people have not consented to them; such nudges can undermine autonomy and dignity. It follows that both the concept and the practice of manipulation deserve careful attention. The concept of manipulation has a core and a periphery; some interventions fit within the core, others within the periphery, and others outside of both.

The Limits of Quantification

Abstract: The problem of nonquantifiability is a recurrent one in both public policy and ordinary life. Much of the time, we cannot quantify the benefits of potential courses of action, or the costs, or both, and we must nonetheless decided whether and how to proceed. Under existing Executive Orders, agencies are generally required to quantify both benefits and costs, and (to the extent permitted by law) to show that the former justify the latter. But agencies are also permitted to consider apparently nonquantifiable factors, such as human dignity and fairness, and also to consider factors that are not quantifiable because of the limits of existing knowledge. When quantification is impossible, agencies should engage in “breakeven analysis,” by which they explore how high the nonquantifiable benefits would have to be in order for the benefits to justify the costs. Breakeven analysis can be used and potentially disciplined in three different ways. (1) Sometimes agencies are able to identity lower or upper bounds, either through point estimates or through an assessment of expected value. (2) Agencies can often make progress by exploring comparison cases in which relevant values have already been assigned (such as for a statistical life). (3) When agencies cannot identify lower or upper bounds, and when helpful comparisons are unavailable, breakeven analysis requires agencies to identify what information is missing and to specify the conditions under which benefits would justify costs (“conditional justification”). In admittedly rare cases, regulators, no less than individuals, might have to “pick” or instead to “opt.”

Making dumb groups smarter

Abstract: If most members of a group make errors, others may make them simply to avoid seeming disagreeable or foolish. All too often, groups fail to achieve the storied wisdom of crowds. In recent years, behavioral research has begun to identify precisely where they go wrong. But so far this academic work has yet to have a noticeable effect on actual practice. The two main reasons for error are informational signals (some group members receive incorrect signals from other members) and reputational pressures (people silence themselves or change their views to avoid serious penalties). These two factors lead to four separate but interrelated problems: (1) Groups don’t merely fail to correct their members’ errors; they amplify them. (2) They fall victim to cascade effects, following the statements and actions of those who went first. (3) They become polarized, taking even more-extreme positions than originally. (4) They focus on “what everybody knows,” ignoring critical information that only one or two members have. The authors offer some simple suggestions for improvement: Silence the leader, “prime” critical thinking, reward group success, assign roles, appoint a devil’s advocate, establish contrarian teams, and use the Delphi method

Does More Speech Correct Falsehoods

Abstract: According to a standard principle in free-speech law, the remedy for falsehoods is more speech, not enforced silence. But empirical research demonstrates that corrections of falsehoods can backfire, by increasing people’s commitment to their inaccurate beliefs, and that presentation of balanced information can promote polarization, thus increasing preexisting social divisions. We attempt to explain these apparently puzzling phenomena by reference to what we call asymmetric Bayesianism: purported corrections may be taken to establish the truth of the proposition that is being denied, and the same information can have diametrically opposite effects if those who receive it have opposing antecedent convictions. We also show that the same information can activate radically different memories and associated convictions, thus producing polarized responses to that information, or what we call a memory boomerang. These explanations help account for the potential influence of surprising validators.

Climate Change Justice

Abstract: Greenhouse gas reductions would cost some nations much more than others, and benefit some nations far less than others. Significant reductions would impose especially large costs on the United States, and recent projections suggest that the United States has relatively less to lose from climate change. In these circumstances, what does justice require the United States to do? Many people believe that the United States is required to reduce its greenhouse gas emissions beyond the point that is justified by its own self-interest, simply because the United States is wealthy, and because the nations most at risk from climate change are poor. This argument from distributive justice is complemented by an argument from corrective justice: The existing "stock" of greenhouse gas emissions owes a great deal to the past actions of the United States, and many people think that the United States should do a great deal to reduce a problem for which it is largely responsible. But there are serious difficulties with both of these arguments. Redistribution from the United States to poor people in poor nations might well be desirable, but if so, expenditures on greenhouse gas reductions are a crude means of producing that redistribution: It would be much better to give cash payments directly to people who are now poor. The argument from corrective justice runs into the standard problems that arise when collectivities, such as nations, are treated as moral agents: Many people who have not acted wrongfully end up being forced to provide a remedy to many people who have not been victimized. The conclusion is that while a suitably designed climate change agreement is in the interest of the world, a widely held view is wrong: Arguments from distributive and corrective justice fail to provide strong justifications for imposing special obligations for greenhouse gas reductions on the United States. These arguments have general implications for thinking about both distributive justice and corrective justice arguments in the context of international law and international agreements.

Nudges vs. Shoves

Abstract: Behavioral findings, demonstrating human errors, have led some people to favor choice-preserving responses (“nudges”), and others to favor mandates and bans. If people’s choices lead them to err, it might seem puzzling, or even odd, to respond with solutions that insist on preserving freedom of choice. But mandates have serious problems of their own, even in the face of behavioral market failures. Mandates might not be able to handle heterogeneity; they might reflect limited knowledge on the part of public officials or the interests of powerful private groups; and they override freedom, potentially producing welfare losses and insulting individual dignity. It is true that in some cases, a behavioral market failure (such as a self-control problem) might justify a mandate on social welfare grounds, but on those very grounds, it makes sense to begin by examining choice-preserving approaches, which are far less intrusive and often highly effective.

On Not Revisiting Official Discount Rates: Institutional Inertia and the Social Cost of Carbon†

Abstract: Within the executive branch, important decisions result from both substantive judgments and institutional constraints. The constraints take the form of three sets of costs: decision costs, opportunity costs, and political costs. In exploring the workings of government, economists and economically oriented law professors have placed far too much emphasis on the role of interest groups and far too little emphasis on a far larger set of institutional constraints, of which interest-group activity is at most one part. Because of those constraints, it can be costly and difficult to change existing policies, especially when such changes typically require a consensus among diverse people, who may have strong views and who have many demands on their time. For public officials, a degree of institutional inertia is often a product of a considered analysis of the full set of costs and benefits. Both decision costs and error costs must be taken into account. With respect to discount rates in the domain of regulation, the central governing document is Office of Management and Budget (OMB) Circular A-4, issued in 2003 (OMB 2003). Circular A-4 was produced by officials within the executive branch, coming from diverse parts of the federal government; both political appointees and career officials played a role. The Council of Economic Advisers and the Office of Information and Regulatory Affairs (OIRA) were particularly important. An initial version was presented to the public for comments and also subjected to peer review. OMB Circular A-4

There Is Nothing that Interpretation Just Is

Abstract: Some people believe that the very idea of interpretation requires judges to adopt a particular method for interpreting the Constitution. The problem with this view is that in constitutional law, the general idea of interpretation is compatible with a range of different approaches, and among them, none is mandatory, in the sense of having some unique or privileged connection with the general idea. Any particular approach must be defended on the ground that it would make our constitutional order better rather than worse. No one should doubt that there are legitimate questions about the institutional capacities of judges, and about the virtues and vices of a deferential role on their part; the answers to those questions can motivate a view about constitutional interpretation. But they do not depend on an understanding of what interpretation necessarily requires.

Unanimity and Disagreement on the Supreme Court

Abstract: In 2013, the Supreme Court showed an unusually high rate of unanimous decisions – the highest, in fact, since 1940. This increase in unanimity, long favored by Chief Justice John Roberts, places a spotlight on an insufficiently appreciated fact: In 1941, the Supreme Court experienced a radical transformation. Almost immediately, it changed from a court that had operated by consensus, with very few separate opinions, into something closer to nine separate law offices, with a large number of dissenting opinions and concurrences, and with a significant rate of 5-4 divisions. Remarkably, the patterns established in the early 1800s continued until 1941, and the patterns established in the early 1940s have persisted to the present day. The transformation of 1941 appears to be attributable, in significant part, to the leadership style of Chief Justice Harlan Fiske Stone, who had no aversion to separate opinions and split decisions, and who was a frequent dissenter himself. The transformation offers general lessons not only about consensus and dissent within courts, but also about broader relationships among leaders, personnel, path dependence, prevailing norms, and the Court’s future. With respect to group behavior, it suggests the possibility of multiple equilibria: With small differences in leadership style and prevailing norms, the level of publicly expressed dissent can either grow or wither. With respect to the normative issues, the standard arguments in favor of a higher level of consensus within the Court – pointing to the values of legitimacy, stability, and minimalism – rest on fragile empirical foundations. It is true that a badly fractured Supreme Court can create uncertainty, and that internal divisions have costs as well as benefits, but there is no sufficient reason to hope for a return to the pre-1941 patterns.

Why Does the American Constitution Lack Social and Economic Guarantees

Abstract: Why does the American Constitution lack contain social and economic guarantees, which appear in most contemporary constitutions? This essay explores four possible answers: chronological, cultural, institutional, and realist. The chronological explanation emphasizes the fact that in the late eighteenth century, social and economic rights simply were not on the viewscreen for constitution-makers. The point is correct, but as a complete account, the chronological explanation fails for the simple reason that constitutional meaning changes over time. The institutional explanation emphasizes that Americans typically see constitutional rights not as mere goals or aspirations, but as pragmatic instruments for judicial enforcement. The difficulty with the institutional explanation is that social and economic rights can, in fact, be enforced judicially. The cultural explanation sees the absence of social and economic rights as part of the general failure of socialist movements in the United States (“American exceptionalism”). The problem with this explanation is that social and economic rights can in fact coexist with a market economy. The realist explanation places a spotlight on the underappreciated fact that the United States Supreme Court came very close, in the 1960s and 1970s, to recognizing social and economic rights under the Constitution. The Court’s refusal to recognize such rights was largely a result of the presidential election of 1968 and in particular of four critical appointments by President Nixon. This is an important source of “American exceptionalism” in the domain of social and economic rights. Here as elsewhere, there is a possibility of multiple equilibria, and with a small difference or two, the United States might well have had an equilibrium that included social and economic rights. “The alms given to a naked man in the street do not fulfill the obligations of the state, which owes to every citizen a certain subsistence, a proper nourishment, convenient clothing, and a kind of life not incompatible with health.”

The NSA Report: Liberty and Security in a Changing World

Abstract: Preface xi Executive Summary xv Recommendations xxv Chapter 1 | Principles 1 Chapter 2 | Lessons of History 10 Chapter 3 | Reforming Foreign Intelligence Surveillance Directed at United States Persons 34 Chapter 4 | Reforming Foreign Intelligence Surveillance Directed at Non- United States Persons 81 Chapter 5 | Determining What Intelligence Should Be Collected and How 112 Chapter 6 | Organizational Reform in Light of Changing Communications Technology 125 Chapter 7 | Global Communications Technology: Promoting Prosperity, Security, and Openness in a Networked World 154 Chapter 8 | Protecting What We Do Collect 176 Conclusion 199 Appendix A | The Legal Standards for Government Access to Communications 201 Appendix B | Overview of NSA Privacy Protections Under FAA 702 Overview of NSA Privacy Protections Under EO 12333 205 Appendix C | US Intelligence: Multiple Layers of Rules and Oversight 207 Appendix D | Avenues for Whistle-blowers in the Intelligence Community 208 Appendix E | US Government Role in Current Encryption Standards 209 Appendix F | Review Group Briefings and Meetings 213 Appendix G | Glossary 216 Index 227

Libertarian Administrative Law

Abstract: In recent years, several judges on the nation’s most important regulatory court -- the United States Court of Appeals for the District of Columbia Circuit -- have given birth to libertarian administrative law, in the form of a series of judge-made doctrines that are designed to protect private ordering from national regulatory intrusion. These doctrines involve nondelegation principles, protection of commercial speech, procedures governing interpretive rules, arbitrariness review, standing, and reviewability. Libertarian administrative law can be seen as a second-best option for those who believe, as some of the relevant judges openly argue, that the New Deal and the modern regulatory state suffer from basic constitutional infirmities. Taken as a whole, libertarian administrative law parallels the kind of progressive administrative law that the same court created in the 1970s, and that the Supreme Court unanimously rejected in the Vermont Yankee case. It should meet a similar fate. Two cases to be decided next Term provide an opportunity for the Court to repudiate libertarian administrative law.

The Regulatory Lookback

Abstract: Technocratic judgments can have a cooling function. An insistent focus on the facts, and on the likely consequences of policies, might soften political divisions and produce consensus. Within the federal government, cost-benefit analysis is a prominent example of the cooling function of technocracy. But when undertaken prospectively, such analysis is sometimes speculative and can be error prone. Moreover, circumstances sometimes change, sometimes in unanticipated ways. For this reason, retrospective analysis, designed to identify the actual rather than expected effects, has significant advantages. The "regulatory lookback," first initiated in 2011 and undertaken within and throughout the executive branch, has considerable promise for simplifying the regulatory state, reducing cumulative burdens, and increasing net benefits. It deserves a prominent place in the next generation of regulatory practice. Recent history also suggests that it might well soften political divisions.I. THE COOLING FUNCTION OF TECHNOCRACYIn 2013, the Federal Aviation Administration (FAA) eliminated certain restrictions of the use of electronic technologies - tablets, cell phones, and computers - at various stages of flight.1 The FAA's decision was widely hailed;2 it did not provoke partisan divisions. Across the United States, travelers agreed that the decision would significantly increase convenience and remove irritating restrictions that had significant aggregate costs.3 The scientific evidence also seemed clear: The restrictions that the FAA eliminated were pointless and did not contribute to safety.4 The FAA's deregulatory efforts, part of the continuing "regulatory lookback," created substantial benefits without imposing significant costs.Amidst political polarization, it is often helpful to focus on facts - on what, exactly, is known or at least knowable. Careful assessment of facts, and projection of likely consequences, can have a cooling function. That assessment can help to reduce political divisions, even in periods of intense polarization. Under favorable conditions, technocrats inform and discipline politicians and their constituents by clarifying the stakes. To be sure, it is not impossible to argue with numbers, but it can be hard to do so, and once that particular argument begins, people tend to know what it is that they are arguing about. By itself, that is important progress.From 2009 to 2012, I was privileged to serve as Administrator of the Office of Information and Regulatory Affairs. In that capacity, I learned that close attention to the human consequences, and indeed to costs and benefits, can help to promote both consensus and progress in domains in which both might otherwise prove difficult to achieve. President Obama's Executive Order 13,563,5 ratifying and intensifying the longstanding American commitment to careful analysis of costs and benefits,6 can be understood as an attempt to shift the attention of public officials away from intuitions, dogmas, political posturing, and interest groups, and toward what matters - the effects of potential policies on the human beings who are subject to them.7Some people are likely to doubt that technocracy has or could have a cooling effect, insisting instead that debates about policies and regulations center not on facts but on values. When people disagree, for example, about a rule that would protect clean air or increase highway safety, their disagreement might turn on values, not evidence. Facts are not irrelevant, of course, but they are hardly the main event.A great deal of evidence does show that values sometimes take priority.8 If people have certain predispositions, they will be inclined to believe that climate change is a serious problem, that nanotechnology is dangerous, that nuclear power is a bad idea, and that gun control saves lives. If they have different predispositions, they may be inclined to different beliefs. Predispositions with respect to values help to account for people's factual judgments on these and many other questions. …

Nudges vs. Shoves

Abstract: Behavioral findings, demonstrating human errors, have led some people to favor choice-preserving responses (“nudges”), and others to favor mandates and bans. If people’s choices lead them to err, it might seem puzzling, or even odd, to respond with solutions that insist on preserving freedom of choice. But mandates have serious problems of their own, even in the face of behavioral market failures. Mandates might not be able to handle heterogeneity; they might reflect limited knowledge on the part of public officials or the interests of powerful private groups; and they override freedom, potentially producing welfare losses and insulting individual dignity. It is true that in some cases, a behavioral market failure (such as a self-control problem) might justify a mandate on social welfare grounds, but on those very grounds, it makes sense to begin by examining choice-preserving approaches, which are far less intrusive and often highly effective.

The Law of “Not Now”: When Agencies Defer Decisions

Abstract: Administrative agencies frequently say “not now.” They defer decisions about rulemaking or adjudication, or decide not to decide, potentially jeopardizing public health, national security, or other important goals. Such decisions are often made as a result of general Administration policy, may be highly controversial, and are at least potentially subject to legal challenge. When is it lawful for agencies to defer decisions? A substantial degree of agency autonomy is guaranteed by a recognition of resource constraints, which require agencies to set priorities, often with reference to their independent assessments of the relative importance of legislative policies. Agencies frequently defer decisions because they do not believe that certain policies warrant prompt attention. Unless a fair reading of congressional instructions suggests otherwise, agencies may defer decisions because of their own judgments about appropriate timing. At the same time, agencies may not defer decisions, or decide not to decide, if Congress has imposed a statutory deadline, or if their failure to act amounts to a circumvention of express or implied statutory requirements, counts as an abdication of the agency’s basic responsibility to promote and enforce policies established by Congress. Difficult questions are raised by moratoria, formal or informal, on regulatory activity, especially if they are motivated by political considerations. Difficult questions are also raised when statutory deadlines are not possible to meet, consistent with the agency’s obligation to engage in “reasoned decisionmaking.” Every day of every year, administrative agencies must decide what and whether * Robert Walmsley University Professor, Harvard University and Harvard Law School; Administrator, Office of Information and Regulatory Affairs, 2009-2012. ** John H. Watson, Jr., Professor of Law, Harvard Law School. We are grateful to participants in a work-in-progress lunch at Harvard Law School for valuable comments and to Matthew Lipka for research assistance. We also thank John Coates and several anonymous current and former government officials for helpful suggestions.

Cost-Benefit Analysis and the Knowledge Problem

Abstract: In the modern regulatory state, there is a serious tension between two indispensable ideas. The first is that it is important to measure, both in advance and on a continuing basis, the effects of regulation on social welfare, usually through cost-benefit analysis. The second idea, attributable above all to Friedrich Hayek, is that knowledge is widely dispersed in society. As Hayek and his followers emphasize, governments planners cannot possibly know what individuals know, simply because they lack that dispersed knowledge. When important information is missing, cost-benefit analysis can be exceptionally difficult to conduct. There are three ways to respond to that problem. The first involves notice-and-comment rulemaking, which has particular promise in the modern era, where regulators are in a far better position to collect the dispersed information of the public. The second involves retrospective analysis, accompanied by a process for obtaining public comment. In many cases, retrospective analysis has found that the ex ante estimates were wrong, thus pointing the way toward potential improvements both in rules and in future estimates. The third, and potentially the most valuable, involves experiments, above all randomized controlled trials, which can give a clear understanding of the likely effects of regulations.