Project Title/ID Number Regulatory System Implications of Performance-Based Regulation—1232003
Start/End Dates 10/1/03—9/30/04
Project Leader Peter May (UW/Faculty)
Team Members Chris Koski (UW/Grad Student)

F=faculty; GS=graduate student; US=undergraduate student; PD=post-doc; I=industrial collaborator; O=other

Click on images to enlarge in a new window

1. Project Goals/Objectives:

This research seeks to identify implementation issues that have arisen for other performance- or risk-based regulatory approaches, and to draw lessons for the performance-based approach to earthquake engineering.

2. Role of this project in supporting PEER’s mission (vision):

This project fits into the PEER agenda of addressing implications of PBEE for the broader regulatory environment.

3. Methodology Employed:

Comparative case studies of various existing efforts to implement performance-based regulation. A key aspect of this research has been identification of expectations for the performance of the regulatory system under performance-based regulatory regimes. The following table summarizes findings from the literature about these expectations (citations deleted to save space):

Table 1. Expectations for Performance-Based Regulatory Regimes
Criterion Expectationa
Effectiveness in reaching regulatory objectives Increased, but limited incentive to go beyond minimum performance objectives.
Flexibility in means of adhering to regulation Increased, given ability to use alternate means to reach objectives.
Innovation potential Increased incentives for innovation, but depends on industry structure and cost of innovation compared with current approaches.
Consistency in application of rules Potential for inconsistencies in interpretation of what is acceptable for which the standards and skills of inspectors are important.
Predictability in regulatory expectations May decrease due to lack of understanding of what is a workable means for achieving desired ends; code of practice guidelines are useful in this respect.
Cost to:

• Government regulators

Uncertain -- Greater costs of developing rules and enforcement, but not necessarily so for costs of developing rules.

• Regulated entities

Decreased or no change in compliance costs, but some entities may choose to develop more costly alternative approaches.

• Public beneficiaries of regulation

Decreased or no change – not explicitly addressed in the literature; presumably benefit from lower costs to regulated entities and innovations spurred by performance-based approach.
Distributive impacts in addressing regulated harms Mixed – Focuses attention on a given harm no matter where it is, but leaves potential for gaps in coverage of attention to that harm if performance is gauged on an area-wide basis through “hot spots”
Equity in treatment of regulated entities Uncertain -- Competitive differences may emerge due to large firms having advantage in developing alternative approaches for heterogeneous industry. How rules are enforced will also affect equity.

Source: Author

4. Brief Description of past year’s accomplishments (Year 6) & more detail on expected Year 7 accomplishments:


5. Other Similar Work Being Conducted Within and Outside PEER and How This Project Differs:


6. Plans for Year 8 if project is expected to be continued:


7. Describe any actual instances where you are aware your results have been used in industry:


8. Expected Milestones & Deliverables:


back to top