Why Permitting Reform?

Federal approval is required for most economic activity in the U.S. and often acts to unnecessarily reduce it or favor big businesses over small entrepreneurs. While there have been numerous reforms over the years, few have attempted to address the problem at its core — the permissive nature of our current system. This approach more closely resembles the “mother, may I?” civil law system over the innovation- friendly common law system that helped make America great.

Is Permit By Rule the Solution?

The Council to Modernize Governance (CMG) has studied the opportunities for foundational permitting reform that could bring a return to these common law principles. Our research has led us to permit by rule, a little-known but effective approach used in many states around the country and, in limited instances, some federal agencies. Permit by rule creates pre-set substantive standards for an applicant to meet so that the rules are understood by everyone. When an applicant applies, the government performs an expedited review only to determine whether the standards have been met, not a detailed case-by-case analysis. Instead, the government targets its efforts on enforcement, focusing only upon those who do not comply with substantive standards. If adopted, the new system would deliver tremendous benefits:

Prioritizing and Expediting Enforcement: Bureaucrats’ focus and taxpayer resources would naturally shift from delaying or stopping economic activity to prioritizing and expediting enforcement of the rules that keep us safe and healthy.
Simplifying the Application Process: Through the use of transparency technology and by providing applicants with clear, concrete requirements, the process would be streamlined for all potential applicants.
Reducing Arbitrary Decision-Making: No longer will decisions to approve or deny permits be subject to the discretion and priorities of individual bureaucrats; rather, objective criteria certified by the permittee will guide the timeline.
Incentivizing Compliance: Permittees who could quickly obtain a federal permit to begin their proposed activity would have to certify their compliance and, in some case, use surety bonds to protect against noncompliance.
Increasing Predictability: Economic actors thrive when the government’s processes are straightforward and efficient. This will easily offset the costs of increased compliance and risk- mitigation measures imposed by regulators.

Ultimately, successful permitting reform should return power (and responsibility) back to citizens. Permit by rule does just that, allowing the citizens to prosper or fail without the arbitrary permission of government.

Check out CMG’s white papers and op-eds on the issue below:
PBR Policy Papers