Law Commons^™

Regulating Machine Learning: The Challenge Of Heterogeneity, Cary Coglianese

Faculty Scholarship at Penn Carey Law

Machine learning, or artificial intelligence, refers to a vast array of different algorithms that are being put to highly varied uses, including in transportation, medicine, social media, marketing, and many other settings. Not only do machine-learning algorithms vary widely across their types and uses, but they are evolving constantly. Even the same algorithm can perform quite differently over time as it is fed new data. Due to the staggering heterogeneity of these algorithms, multiple regulatory agencies will be needed to regulate the use of machine learning, each within their own discrete area of specialization. Even these specialized expert agencies, though, …

Solving The Congressional Review Act’S Conundrum, Cary Coglianese

Faculty Scholarship at Penn Carey Law

Congress routinely enacts statutes that require federal agencies to adopt specific regulations. When Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, for example, it mandated that the Securities and Exchange Commission (SEC) adopt an anti-corruption regulation requiring energy companies to disclose payments they make to foreign governments. Although the Dodd-Frank Act specifically required the SEC to adopt this disclosure requirement, the agency’s eventual regulation was also, like other administrative rules, subject to disapproval by Congress under a process outlined in a separate statute known as the Congressional Review Act (CRA).

After the SEC issued its …

Building Better Compliance, Cary Coglianese

Faculty Scholarship at Penn Carey Law

A response to Dorothy Lund & Natasha Sarin: "Corporate Crime and Punishment: An Empirical Study"

Influence By Intimidation: Business Lobbying In The Regulatory Process, Alex Acs, Cary Coglianese

Faculty Scholarship at Penn Carey Law

Interest group influence in the policy process is often assumed to occur through a mechanism of exchange, persuasion, or subsidy. Here, we explore how business groups may also exert influence by intimidating policymakers—a form of persuasion, but one based not on the provision of policy information but of political information. We develop a theory where a business firm lobbies a regulator to communicate political information about its capacity to commit to future influence-seeking activities that would sanction the regulator. The regulator assesses the credibility of this message by evaluating the firm’s commitment to lobbying. Guided by our theory, we present …

President Biden's Executive Order On Promoting Competition: An Antitrust Analysis, Herbert J. Hovenkamp

Faculty Scholarship at Penn Carey Law

In July, 2021, President Biden signed a far ranging Executive Order directed to promoting competition in the American economy. This paper analyzes issues covered by the Order that are most likely to affect the scope and enforcement of antitrust law. The only passage that the Executive Order quoted from a Supreme Court antitrust decision captures its antitrust ideology well – that the Sherman Act:

rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress, while at the same time …

Confronting Complexity With Regulatory Excellence: Recommendations In The Wake Of The Philadelphia Refinery Explosion, Cary Coglianese

Faculty Scholarship at Penn Carey Law

Following the June 2019 explosion at the Philadelphia Energy Solutions (PES) refinery, the city of Philadelphia now confronts major challenges associated with the future of the refinery site. Whether the site is reopened as a refinery or other chemical-processing operation, or redeveloped for other uses, the city will face challenges endemic to all kinds of public policy issues: complexity, uncertainty, dynamism, tradeoffs, and value choices. This testimony, delivered to the City of Philadelphia Refinery Advisory Group’s Environment Committee, offers three main suggestions to help guide Philadelphia officials in dealing with the future of the PES refinery site. First, city officials …

Assessing Automated Administration, Cary Coglianese, Alicia Lai

Faculty Scholarship at Penn Carey Law

To fulfill their responsibilities, governments rely on administrators and employees who, simply because they are human, are prone to individual and group decision-making errors. These errors have at times produced both major tragedies and minor inefficiencies. One potential strategy for overcoming cognitive limitations and group fallibilities is to invest in artificial intelligence (AI) tools that allow for the automation of governmental tasks, thereby reducing reliance on human decision-making. Yet as much as AI tools show promise for improving public administration, automation itself can fail or can generate controversy. Public administrators face the question of when exactly they should use automation. …

Moving Toward Personalized Law, Cary Coglianese

Faculty Scholarship at Penn Carey Law

Rules operate as a tool of governance by making generalizations, thereby cutting down on government officials’ need to make individual determinations. But because they are generalizations, rules can result in inefficient or perverse outcomes due to their over- and under-inclusiveness. With the aid of advances in machine-learning algorithms, however, it is becoming increasingly possible to imagine governments shifting away from a predominant reliance on general rules and instead moving toward increased reliance on precise individual determinations—or on “personalized law,” to use the term Omri Ben-Shahar and Ariel Porat use in the title of their 2021 book. Among the various technological, …

Administrative Law: Governing Economic And Social Governance, Cary Coglianese

Faculty Scholarship at Penn Carey Law

Administrative law refers to the body of legal doctrines, procedures, and practices that govern the operation of the myriad regulatory bodies and other administrative agencies that interact directly with individuals and businesses to shape economic and social outcomes. This law takes many forms in different legal systems around the world, but different systems of administrative law share in common a focus on three major issues: the formal structures of administrative agencies; the procedures that these agencies must follow to make regulations, grant licenses, or pursue other actions; and the doctrines governing judicial review of administrative decisions. In addressing these issues, …

Algorithm Vs. Algorithm, Cary Coglianese, Alicia Lai

Faculty Scholarship at Penn Carey Law

Critics raise alarm bells about governmental use of digital algorithms, charging that they are too complex, inscrutable, and prone to bias. A realistic assessment of digital algorithms, though, must acknowledge that government is already driven by algorithms of arguably greater complexity and potential for abuse: the algorithms implicit in human decision-making. The human brain operates algorithmically through complex neural networks. And when humans make collective decisions, they operate via algorithms too—those reflected in legislative, judicial, and administrative processes. Yet these human algorithms undeniably fail and are far from transparent. On an individual level, human decision-making suffers from memory limitations, fatigue, …

From Negative To Positive Algorithm Rights, Cary Coglianese, Kat Hefter

Faculty Scholarship at Penn Carey Law

Artificial intelligence, or “AI,” is raising alarm bells. Advocates and scholars propose policies to constrain or even prohibit certain AI uses by governmental entities. These efforts to establish a negative right to be free from AI stem from an understandable motivation to protect the public from arbitrary, biased, or unjust applications of algorithms. This movement to enshrine protective rights follows a familiar pattern of suspicion that has accompanied the introduction of other technologies into governmental processes. Sometimes this initial suspicion of a new technology later transforms into widespread acceptance and even a demand for its use. In this paper, we …

Regulating New Tech: Problems, Pathways, And People, Cary Coglianese

Faculty Scholarship at Penn Carey Law

New technologies bring with them many promises, but also a series of new problems. Even though these problems are new, they are not unlike the types of problems that regulators have long addressed in other contexts. The lessons from regulation in the past can thus guide regulatory efforts today. Regulators must focus on understanding the problems they seek to address and the causal pathways that lead to these problems. Then they must undertake efforts to shape the behavior of those in industry so that private sector managers focus on their technologies’ problems and take actions to interrupt the causal pathways. …

The Deregulation Deception, Cary Coglianese, Natasha Sarin, Stuart Shapiro

Faculty Scholarship at Penn Carey Law

President Donald Trump and members of his Administration repeatedly asserted that they had delivered substantial deregulation that fueled positive trends in the U.S. economy prior to the COVID pandemic. Drawing on an original analysis of data on federal regulation from across the Trump Administration’s four years, we show that the Trump Administration actually accomplished much less by way of deregulation than it repeatedly claimed—and much less than many commentators and scholars have believed. In addition, and also contrary to the Administration’s claims, overall economic trends in the pre-pandemic Trump years tended simply to follow economic trends that began years earlier. …

Unrules, Cary Coglianese, Gabriel Scheffler, Daniel Walters

Faculty Scholarship at Penn Carey Law

At the center of contemporary debates over public law lies administrative agencies’ discretion to impose rules. Yet, for every one of these rules, there are also unrules nearby. Often overlooked and sometimes barely visible, unrules are the decisions that regulators make to lift or limit the scope of a regulatory obligation, for instance through waivers, exemptions, and exceptions. In some cases, unrules enable regulators to reduce burdens on regulated entities or to conserve valuable government resources in ways that make law more efficient. However, too much discretion to create unrules can facilitate undue business influence over the law, weaken regulatory …

Lifting Labor’S Voice: A Principled Path Toward Greater Worker Voice And Power Within American Corporate Governance, Leo E. Strine Jr., Aneil Kovvali, Oluwatomi O. Williams

Faculty Scholarship at Penn Carey Law

In view of the decline in gain sharing by corporations with American workers over the last forty years, advocates for American workers have expressed growing interest in allowing workers to elect representatives to corporate boards. Board level representation rights have gained appeal because they are a highly visible part of codetermination regimes that operate in several successful European economies, including Germany’s, in which workers have fared better.

But board-level representation is just one part of the comprehensive codetermination regulatory strategy as it is practiced abroad. Without a coherent supporting framework that includes representation from the ground up, as is provided …

Bankruptcy For Banks: A Tribute (And Little Plea) To Jay Westbrook, David A. Skeel Jr.

Faculty Scholarship at Penn Carey Law

In this brief essay, to be included in a book celebrating the work of Jay Westbrook, I begin by surveying Jay’s wide-ranging contributions to bankruptcy scholarship. Jay’s functional analysis has had a profound effect on scholars’ understanding of key issues in domestic bankruptcy law, and Jay has been the leading scholarly figure on cross-border insolvency. After surveying Jay’s influence, I turn to the topic at hand: a proposed reform that would facilitate the use of bankruptcy to resolve the financial distress of large financial institutions. Jay has been a strong critic of this legislation, arguing that financial institutions need to …

Administrative Law In A Time Of Crisis: Comparing National Responses To Covid-19, Cary Coglianese, Neysun A. Mahboubi

Faculty Scholarship at Penn Carey Law

Beginning in early 2020, countries around the world successively and then together faced the same rapidly emerging threats from the COVID-19 virus. The shared experience of this global pandemic affords scholars and policymakers a comparative lens through which to view how differences in countries’ governance structures and administrative responses affected their ability to manage the various crisis posed by the pandemic. This article introduces a special series of essays in the Administrative Law Review written by leading administrative law experts across the globe. Case studies focus on China, Chile, Germany, Italy, New Zealand, South Africa, and the United States, as …

Compliance Management Systems: Do They Make A Difference?, Cary Coglianese, Jennifer Nash

Faculty Scholarship at Penn Carey Law

Regulatory compliance is vital for promoting the public values served by regulation. Yet many businesses remain out of compliance with some of the regulations that apply to them—presenting not only possible dangers to the public but also exposing themselves to potentially significant liability risk. Compliance management systems (CMSs) may help reduce the likelihood of noncompliance. In recent years, managers have begun using CMSs in an effort to address compliance issues in a variety of domains: environment, workplace health and safety, finance, health care, and aviation, among others. CMSs establish systematic, checklist-like processes by which managers seek to improve their organizations’ …

Ai In Adjudication And Administration, Cary Coglianese, Lavi M. Ben Dor

Faculty Scholarship at Penn Carey Law

The use of artificial intelligence has expanded rapidly in recent years across many aspects of the economy. For federal, state, and local governments in the United States, interest in artificial intelligence has manifested in the use of a series of digital tools, including the occasional deployment of machine learning, to aid in the performance of a variety of governmental functions. In this paper, we canvas the current uses of such digital tools and machine-learning technologies by the judiciary and administrative agencies in the United States. Although we have yet to see fully automated decision-making find its way into either adjudication …

Due Process In Antitrust Enforcement: Normative And Comparative Perspectives, Christopher S. Yoo, Yong Huang, Thomas Fetzer, Shan Jiang

Faculty Scholarship at Penn Carey Law

Due process in antitrust enforcement has significant implications for better professional and accurate enforcement decisions. Not only can due process spur economic growth, raise government credibility, and limit the abuse of powers according to law, it also promotes competitive reforms in monopolized sectors and curbs corruption. Jurisdictions learn from the best practices in the investigation process, decisionmaking process, and the announcement and judicial review of antitrust enforcement decisions. By comparing the enforcement policies of China, the European Union, and the United States, this article calls for better disclosure of evidence, participation of legal counsel, and protection of the procedural and …

A New (Republican) Litigation State?, Stephen B. Burbank, Sean Farhang

Faculty Scholarship at Penn Carey Law

It is a commonplace in American politics that Democrats are far more likely than Republicans to favor access to courts to enforce individual rights with lawsuits. In this article we show that conventional wisdom, long true, no longer reflects party agendas in Congress. We report the results of an empirical examination of bills containing private rights of action with pro-plaintiff fee-shifting provisions that were introduced in Congress from 1989 through 2018. The last eight years of our data document escalating Republican-party support for proposals to create individual rights enforceable by private lawsuits, mobilized with attorney’s fee awards. By 2015-18, there …

What Regulators Can Learn From Global Health Governance, Cary Coglianese

Faculty Scholarship at Penn Carey Law

The Great Pandemic of 2020 shows how much public health around the world depends on effective global and domestic governance. Yet for too long, global health governance and domestic regulatory governance have remained largely separate fields of scholarship and practice. In her book, Global Health Justice and Governance, Jennifer Prah Ruger offers scholars and practitioners of regulatory governance an excellent opportunity to see how domestic regulation shares many of the same problems, strategies, and challenges as global health governance. These commonalities reinforce how much national and subnational regulators can learn from global health governance. Drawing on insights from Prah …

Privacy Vs. Transparency: Handling Protected Materials In Agency Rulemaking, Christopher S. Yoo, Kellen Mccoy

Faculty Scholarship at Penn Carey Law

Agencies conducting informal rulemaking proceedings increasingly confront conflicting duties with respect to protected materials included in information submitted in public rulemaking dockets. They must reconcile the broad commitment to openness and transparency reflected in federal law with the duty to protect confidential business information (CBI) and personally identifiable information (PII) against improper disclosure.

This Article presents an analysis of how agencies can best balance these often-countervailing considerations. Part I explores the statutory duties to disclose and withhold information submitted in public rulemaking dockets placed on agencies. It also examines judicial decisions and other legal interpretations regarding the proper way to …

Administrative Law In The Automated State, Cary Coglianese

Faculty Scholarship at Penn Carey Law

In the future, administrative agencies will rely increasingly on digital automation powered by machine learning algorithms. Can U.S. administrative law accommodate such a future? Not only might a highly automated state readily meet longstanding administrative law principles, but the responsible use of machine learning algorithms might perform even better than the status quo in terms of fulfilling administrative law’s core values of expert decision-making and democratic accountability. Algorithmic governance clearly promises more accurate, data-driven decisions. Moreover, due to their mathematical properties, algorithms might well prove to be more faithful agents of democratic institutions. Yet even if an automated state were …

The Aca’S Choice Problem, Allison K. Hoffman

Faculty Scholarship at Penn Carey Law

The Affordable Care Act (ACA) is in many ways a success. Millions more Americans now have access to health care, and the ACA catalyzed advances in health care delivery reform. Simultaneously, it has reinforced and bolstered a problem at the heart of American health policy and regulation: a love affair with choice. The ACA’s insurance reforms doubled down on the particularly American obsession with choice. This article describes three ways in which that doubling down is problematic for the future of US health policy. First, pragmatically, health policy theory predicts that choice among health plans will produce tangible benefits that …

Implicit Communication And Enforcement Of Corporate Disclosure Regulation, Ashiq Ali, Michael T. Durney, Jill E. Fisch, Hoyoun Kyung

Faculty Scholarship at Penn Carey Law

This study examines the challenge of implicit communication -- qualitative statements, tone, and non-verbal cues -- to the effectiveness of enforcing corporate disclosure regulation. We use a Regulation Fair Disclosure (Reg FD) setting, given that the SEC adopted the regulation recognizing that managers can convey non-public information privately not just through explicit quantitative disclosures but also through implicit communication. In a high-profile enforcement action, however, the court focused on a literal examination of the manager’s language rather than his positive spin to conclude that the SEC had been “too demanding” in examining the manager’s statements and that its enforcement policy …

The Challenge Of Regulatory Excellence, Cary Coglianese

Faculty Scholarship at Penn Carey Law

Regulation is a high-stakes enterprise marked by tremendous challenges and relentless public pressure. Regulators are expected to protect the public from harms associated with economic activity and technological change without unduly impeding economic growth or efficiency. Regulators today also face new demands, such as adapting to rapidly changing and complex financial instruments, the emergence of the sharing economy, and the potential hazards of synthetic biology and other innovations. Faced with these challenges, regulators need a lodestar for what constitutes high-quality regulation and guidance on how to improve their organizations’ performance. In the book Achieving Regulatory Excellence, leading regulatory experts …

Deploying Machine Learning For A Sustainable Future, Cary Coglianese

Faculty Scholarship at Penn Carey Law

To meet the environmental challenges of a warming planet and an increasingly complex, high tech economy, government must become smarter about how it makes policies and deploys its limited resources. It specifically needs to build a robust capacity to analyze large volumes of environmental and economic data by using machine-learning algorithms to improve regulatory oversight, monitoring, and decision-making. Three challenges can be expected to drive the need for algorithmic environmental governance: more problems, less funding, and growing public demands. This paper explains why algorithmic governance will prove pivotal in meeting these challenges, but it also presents four likely obstacles that …

The Law And Economics Of Risk Regulation, Cary Coglianese

Faculty Scholarship at Penn Carey Law

Law plays a central role in the management of risk in society. The rules adopted by regulatory agencies now affect nearly every facet of the economy, and as such regulation has motivated a substantial body of academic research. Law and economics research on regulation has, first, demonstrated the normative justification for governmental intervention in the marketplace based on the concept of market failure. Second, political economy research on regulation has shown how, as a positive matter, interest groups, political movements, and public pressure affect the stringency of such regulation, sometimes more than any normative rationale for regulation. Third, risk regulation …

Regulatory Abdication In Practice, Cary Coglianese

Faculty Scholarship at Penn Carey Law

“Meta-regulation” refers to deliberate efforts to induce private firms to create their own internal regulations—a regulatory strategy sometimes referred to as “management-based regulation” or even “regulation of self-regulation.” Meta-regulation is often presented as a flexible alternative to traditional “command-and-control” regulation. But does meta-regulation actually work? In her recent book, Meta-Regulation in Practice: Beyond Normative Views of Morality and Rationality, Fiona Simon purports to offer a critique of meta-regulation based on an extended case study of the often-feckless process of electricity regulatory reform undertaken in Australia in the early part of this century. Yet neither Simon’s case study nor her book …