WHEN YOU SPEND a few days with the citizens of Appleton, Wisconsin -- as readers of T. R. Reid's front-page series did last week -- you can spot the good federal regulations and the bad ones right away. It's good that the government made the paper mills clean up the town's river and that it keeps the local diary products up to standard. But it's not good that the small local university had to spend $4,000 for a wheelchair lift that has been used only once in three years, or that the Crops of Engineers has spent two years haggling over an eight-foot strip of landfill. There are some borderline cases, but by the large it's easy to agree with the citizens of Appleton that, while many government regulations are a positive benefit, others are a nuisance. If this seems so obvious to the general public, why can't government legislators and administrators tell the difference?

Part of the reason lies in the way that most federal regulations were developed over the last 10 years or so. Too often, the story played out like a plot: harried legislators, assisted by hyperactive staff assistants, placate strident lobbies by adding sweeping prohibitions and expensive mandates to complicated legislation. Self-protective bureaucrats interpret statutes with a mindful eye on those same lobbies. Checklist-bearing inspectors monitor compliance, well aware that no points are awarded for being soft.

Clearly missing in much of this process was common sense. It is, of course, difficult to legislate common sense. Moreover, it is much easier to spot the foibles in regulations after you have seen them operating in the real world in places like Appleton. But there surely is a need for a tidying-up operation -- a reexamination and rationalization. This, rather than a full-scale retreat, is what the current "regulatory backlash" seems to us to be mostly about.

In some areas, this process of revision is already under way. Mr. Reid reports that the business people of Appleton recognized the Occupational Safety and Health Administration, that notorious nit-picker of years past, as the "most improved agency." The surprise winner of the regulatory popularity award was none other than the Internal Revenue Service, an agency that, as the granddaddy of all federal regulators, has had years to clean up its act.

What is needed now is a good-faith effort on all sides to sift through the accumulation of federal regulations, discard those that are clearly wrongheaded or unworkable, and figure out how to make the important ones work better. There is no better way to tackle this task than by examining how things actually work in the many different kinds of communities across the nation where the federal government plays a daily role.