Interactive Regulation

Robert C. Bird, University of Connecticut

Abstract

Small businesses shoulder significant costs in order to comply with the maze of government regulation that impacts commerce. The Regulatory Flexibility Act (RFA) was designed to alleviate that burden by making regulators more accountable in their enforcement of agency mandates. The RFA just celebrated its thirtieth birthday, and one of the most important pieces of business legislation developed during the 1970s has yet to fulfill its promise. This article examines not just the calls for statutory reform but also the motivations and perceptions of the individuals most impacted by business regulation. We propose that while legal reform can be helpful, actions can be taken from both sides of the regulation equation to make the regulatory environment less hostile to small business while still substantially meeting agency goals. The underlying theme is that increased interactivity by both the government and the governed, and not simply statutory reform, will be most effective in bringing the long-delayed potential of the RFA to fruition.