methods of regulation, or Innovation Regulatory Techniques, which could be used as a
means of reducing the burdens and expense of regulation on the public:
Enhance Competition: Eliminates trade barriers; Remove economic regulations.
Marketable rights: limits private-sector rights to engage in an activity but allows
private parties to exchange or sell these rights.
Economic Incentives: Use of fees or subsidies to achieve regulatory goals.
Performance Standards: Setting performance criteria rather than a detailed
specification as the means of compliance.
Information Disclosure: Requires that users be provided with information about
choices and consequences to allow informed free choices.
Voluntary Standards Setting: Agency substitutes voluntary standards set by
regulated sector for agency standards.
Compliance Reform: Agency monitoring replaced with third party monitoring
Tiering: Differing levels of compliance based on size and hazards of regulated
More recently, Executive Order 12866 of September 30, 1993, "Regulatory Planning
and Review", initiated a new program to reform and make the regulatory process more
efficient. It reconfirmed the need for, and validity of, the innovative regulatory
techniques. In particular, E012866 states:
"Each agency shall identify and assess available alternatives to direct regulation,
including providing economic incentives to encourage the desired behavior,..."
"Each agency shall identify and assess alternative forms of regulation and shall,
to the extent feasible, specify performance objectives, rather than specifying the
behavior or manner of compliance that regulated entities must adopt."
"Each agency shall tailor its regulations to impose the least burden on
society...consistent with obtaining the regulatory objectives,..."