Final Report (all chapters)

The federal government has been relying on the private sector to meet its numerous public
mandates in several ways. The Underwriters Laboratories (UL), for example, has long been
responsible for testing and certifying the safety of electric appliances and devices. The UL plays
a quasi-autonomous regulatory role, the credibility of which is ensured in part (but not
exclusively) by the tort system. UL is not an exceptional case, however. Just about every sector
of the economy has developed safety standards. Some of the most familiar examples include fire
safety codes developed by the National Fire Protection Association, health and safety standards
for cosmetics promulgated by the U.S. Pharmacopeia, and the innumerable standards developed
by American Society for Testing and Materials. 43
In other cases, the government sets broad public goals but allows the private sector to
determine how to achieve them. Emission trading systems are a case in point. The Environmental
Protection Agency (EPA) sets an overall environmental goal – for example, the total volume of
sulfur dioxide emissions produced by coal-burning electric plants – but leaves it to the market to
find the most cost-effective way to achieve this goal. Another example is Project XL, launched
by the EPA in 1995 as part of the Clinton administration’s efforts to improve government
services. 44 Under this program, industrial plants with multiple pollution sources can apply for a
single permit if they demonstrate that they can reduce their overall emission volume. More
prosaic perhaps but just as relevant is the case of the Fertility Clinic Success Rate and
Certification Act discussed in section 5.1.1 above. As the agency responsible for administering
FCSRCA, the CDC has delegated the responsibility for gathering ART success rates to a private
group, the Society for Assisted Reproductive Technology.
The federal government has a long record of adopting privately developed standards. One of
the most spectacular examples is the Occupational Safety and Health Administration’s wholesale
adoption of private health and safety standards soon after its creation. 45 Another example is the
Nuclear Regulatory Commission’s incorporation of its books of safety standards developed by
the Nuclear Energy Institute, an industry trade association. FCSRCA was in large part an
exercise in the codification of an already existing practice, namely the annual survey of success
rates conducted by SART. SART began gathering information about success rates on a voluntary
basis in 1989, and has been publishing the results in the journal Fertility and Sterility ever since.
FCSRCA improved the SART surveys in several ways – by providing a consistent definition of
success rate, by making reporting of success rates to the CDC mandatory, and more recently, by
43
44
45
Harry S. Gerla, "Federal Antitrust Law and Trade and Professional Association Standards and Certification,"
Dayton Law Review 19 (1994); Samuel Krislov, How Nations Choose Product Standards and Standards Change
Nations (Pittsburgh: University of Pittsburgh Press, 1997).
Dennis D. Hirsch, "Project XL and the Special Case: The EPA's Untold Success Story," Columbia Journal of
Environmental Law 26 (2001); Lawrence E. Susskind and Joshua Secunda, "The Risks and the Advantages of
Agency Discretion: Evidence from EPA's Project XL," UCLA Journal of Environmental Law and Policy 17
(1998).
That many of these standards were more effective at protecting the competitive position of their private
developers than at achieving their purported goal is a sobering lesson about the pitfalls of blind trust in the
virtues of the private enterprise.
134