The Continuing Pursuit of Better Practices

Abstract

Due to the approaching 100th anniversary of the statute that gave the FTC life, the FTC conducted a self-assessment to consider what it must do to continue the valuable work it performs and to identify steps it must take to do better in the future. The consultations for the project identified general characteristics of good administration practice the FTC should strive to achieve in the coming years.

Part two of the report discusses various foundations of successful FTC performance and identifies institutional features that beget good substantive outcomes over time. These foundations and features include the agency’s mission, structure, resources, relationships, strategic planning, and policy research and development. The report also considers the various options the FTC has to deploy its resources, from enforcement actions to policy development to education and outreach.

Part three assesses measures of the effectiveness of FTC actions. The report states that the FTC should stay focused on how its actions impact consumer welfare even though most of its actions are aimed at other parties to protect consumers rather than directly at consumers. Direct measurement of the increase in consumer welfare is ideal, but it is not always feasible. Proxies for direct welfare measurements are thus sometimes necessary and include outcomes of enforcement actions; the impact, effect, and precedential value of these actions; its intellectual leadership; guidance provided by FTC to businesses and consumers, and burdens FTC places on industry.

The report concludes with the Chairman’s recommendations for future leaders of the FTC to consider. The recommendations correspond to the topics addressed in the report. They specifically address the institutional arrangements by which the Commission performs its responsibilities and the means for measuring the agency’s effectiveness and performance.

Keywords: Federal Trade Commission, Consumer Protection, Consumer Welfare, Competition Policy

JEL Classification: L12, L40, D18, D42, F13