Cost Benefit Analysis
The Precarious Legality of Cost-Benefit Analysis
Cost-benefit analysis has become a ubiquitous part of regulation, enforced by the Office of Management and Budget. A weak cost-benefit analysis means that the regulation gets kicked back to the agency. Yet there is no statute that provides for this; it’s entirely a matter of Presidential dictate. And reliance on cost-benefit analysis often flies in …
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CONTINUE READINGFive Ideas for Regulatory Reformers
Duke is hosting a conference on Monday (10-4 ET) about conservative approaches to environmental protection. (livestream here). Here are a few ideas to throw into the mix:
CONTINUE READINGWhat the Convention Speeches Could Teach Economists About the Discount Rate
The economic formulas assume that people want their children and grandchildren to be as well off as they are, no better and no worse. But people actually want the future to be better than the present, and they’re willing to make sacrifices for this to happen.
CONTINUE READINGThe Mythical Threat of a Regulatory Deluge
Conservatives are now spreading the myth that, if the country fails to elect Mitt Romney, the aftermath will be a deluge of federal regulations. Republican state attorney generals are hitting the campaign trail to this fear of a coming regulatory flood in a post-Romney world. (here). This myth has been debunked by Cass Sunstein, who …
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CONTINUE READINGIf Cost-Benefit Analysis is Good, Is More Cost-Benefit Analysis Always Better?
Presidential and congressional requirements for cost-benefit analysis should also recognize that
data availability may be an implementation issue, and that additional resources may be necessary
for the agencies conducting these analyses. In some cases, the data that agencies need to estimate
the costs and benefits of their rules may not exist, or may only be available from regulated
entities.128 Although there is no “typical” cost-benefit analysis (just as there is no “typical” rule),
the cost of conducting many individual regulatory analyses has been in the hundreds of thousands
of dollars.129 If more agencies are required to prepare more detailed analyses for more rules, it is
unclear how the agencies will be able to do so without more resources.130 As noted earlier in this
report, if agencies are required to prepare cost-benefit analyses for rules that are not expected to
Some Simple Arithmetic About Environmental Regulation and the Economy
In absolute terms, environmental compliance costs might be large, but relative to the economy as a whole, they’re not much more than a rounding error.
CONTINUE READINGKeeping the “Benefits” in Cost-Benefit Analysis
The business community is apparently souring on cost-benefit analysis, for the simple reason that cost-benefit analysis requires a consideration of the benefits of regulation. From as strictly business point of view, it’s really only the costs that matter, and cost-benefit analysis is good only to the extent that it disfavors regulation. For instance, Republicans have …
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CONTINUE READINGObama’s Cost-Benefit Executive Order
Last week, President Obama issued a new executive order on cost-benefit analysis The order also promised a retrospective review of old rules to weed out the duds. Business interests were pleased, environmentalists were dismayed. Politically, the new executive order makes perfect sense. To be reelected and keep control of the Senate, he needs to win …
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CONTINUE READINGClimate Change, Afghanistan, and the Model Penal Code
It’s hard to look at this week cover of Time and not want to remain in Afghanistan. That was probably the magazine’s intention. But let’s do a quick cost-benefit analysis here. I have argued elsewhere that we could save far more women from repression, violence, and brutality by taking all the money and effort we are …
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CONTINUE READINGThree New Perspectives on Environmental Issues
Three recent books provide fresh and interesting perspectives on environmental law. The authors all graduated from law school in the past twenty years, and they all have most of their careers ahead of them. All of this augurs well for the future of environmental scholarship. The first book is Doug Kysar’s Regulating from Nowhere. Kysar …
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