The Cost-Benefit State
Cass R. Sunstein
Harvard Law School
University of Chicago Law School, John M. Olin Law & Economics, Working Paper No. 39
Gradually, and in fits and starts, the American regulatory state is becoming a cost-benefit state. This essay argues on behalf of the transformation, as a method for overcoming selective attention, public ignorance, "legislation by anecdote," and rent-seeking. At the same time it identifies three serious risks in current theory and practice: excessive proceduralism; engrafting cost-benefit requirements on top of existing command-and-control regulation; and using the criterion of private willingness to pay in contexts for which that criterion is ill-suited. The essay urges a shift from command-and-control to more flexible strategies, including "environmental contracting." It also attempts to identify and cast light on the most complex issues involving valuation of regulatory benefits.
working papers series
Date posted: June 12, 1998
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