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Regulatory Exit

Posted by on Wednesday, October 14, 2015 in Articles, Volume 68, Volume 68, Number 5.

Regulatory Exit


Exit is a ubiquitous feature of life, whether breaking up in a marriage, dropping a college course, or pulling out of a venture capital investment. In fact, our exit options often determine whether and how we enter in the first place. While legal scholarship is replete with studies of exit strategies for businesses and individuals, administrative law scholarship has barely touched the topic of exit. Yet exit plays just as central a role in the regulatory state as elsewhere– –welfare support ends, government steps out of rate-setting. In this Article, we argue that exit is a fundamental feature of regulatory design and should be explicitly considered at the time of program creation.

Part II starts from first principles and sets out the basic features of regulatory exit. It addresses the design challenges of exit strategies and how to measure success of exit. With these descriptive and normative foundations in place, Part III develops a framework that explains the four basic types of regulatory exit strategies, exploring the political economy that determines each strategy and explaining when policy makers are most likely to adopt them. To demonstrate its usefulness in practice, the framework is applied as a case study in Part IV to the emerging challenge of fracking. We conclude by describing a new exit strategy model for regulatory design, a hybrid approach of “Lookback Exit.”

Exit is a vast, central, yet largely unexplored aspect of administrative governance. By providing a fuller account, we demonstrate why exit warrants focused research and theoretical development in its own right, create a framework for the analysis of exit issues, and identify the key questions for future research. Doing so provides important insights, not only for understanding the practice we see around us today, but also for the design of programs to manage emerging issues.


J.B. Ruhl
David Daniels Allen Distinguished Chair in Law, Vanderbilt University Law School.

James Salzman
Donald Bren Distinguished Professor, UCLA Law School and Bren School of the Environment, UC Santa Barbara. We are thankful for the brainstorming and comments from participants in workshops at Duke, Vanderbilt, and Colorado law schools. Please direct any questions or comments to or