The Cost-Benefit State

Cass R. Sunstein

Harvard Law School

May 1996

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.

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Date posted: June 12, 1998  

Suggested Citation

Sunstein, Cass R., The Cost-Benefit State (May 1996). University of Chicago Law School, John M. Olin Law & Economics, Working Paper No. 39. Available at SSRN: http://ssrn.com/abstract=10083

Contact Information

Cass R. Sunstein (Contact Author)
Harvard Law School ( email )
1575 Massachusetts Ave
Areeda Hall 225
Cambridge, MA 02138
United States
617-496-2291 (Phone)
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