Last week, in one of her last acts in office, Gov. Susana Martinez signed New Mexico executive order 2018-055. The order takes aim at those state rules written by un-elected regulators – state government boards, commissions and agencies – by requiring sound economic analysis before new rules affecting New Mexicans can take effect.
It’s a major, and much-needed, advancement for evidence-based policy in New Mexico.
Economic analysis for regulations may sound boring, but it’s actually a critical tool that helps ensure that your government’s decisions – which affect you, your employer, or your business – are wise ones. Analysis helps regulators bring together all the most pertinent information about a problem and its possible solutions to determine whether a particular rule is likely to do more good than harm for society.
As an example, economic analysis played an important role in the 1980s when the Reagan administration decided to phase out the lead content in gasoline. While we don’t remember President Reagan or his staff as big regulators, a well-crafted analysis from the Environmental Protection Agency helped convince them that, in this case, the benefits of a new rule outweighed the costs.