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Regulatory Cost-Benefit Analysis and Collective Action

33 Pages Posted: 27 Mar 2009 Last revised: 6 Nov 2011

Daniel H. Cole

Indiana University Maurer School of Law; Indiana University School of Public and Environmental Affairs

Date Written: March 27, 2009

Abstract

This updated draft paper explores the significant role Regulatory Cost-Benefit Analysis (RCBA) plays in facilitating or impeding collective action. Through case studies, the paper shows that well-constructed RCBAs have (1) facilitated collective action (including in cases where explicit consideration of costs is legally prohibited) by muting political opposition; and (2) helped to obstruct welfare-reducing rules from being promulgated. RCBAs can of course be manipulated to obstruct social welfare-improving collective action or to promote inefficient policies. However, the fact that RCBAs require transparency makes those efforts liable to discovery and disclosure, as in the case of the Bush Administration's failed "Clear Skies" initiative. The paper concludes with an assessment of implications of the case studies for our understanding of the role of RCBA in the regulatory process, and with a call for more qualitative and quantitative empirical research on the use and abuse of RCBA as a political tool in legislative and regulatory processes.

Keywords: Cost-benefit Analysis, Economic Analysis, Environmental Law, EPA, Collective Action

JEL Classification: C7, D61, D7, H43, K23, K32, K33, Q2

Suggested Citation

Cole, Daniel H., Regulatory Cost-Benefit Analysis and Collective Action (March 27, 2009). Context and the Evolution of Mechanisms for Solving Collective Action Problems Paper. Available at SSRN: https://ssrn.com/abstract=1369338 or http://dx.doi.org/10.2139/ssrn.1369338

Daniel H. Cole (Contact Author)

Indiana University Maurer School of Law ( email )

211 S. Indiana Avenue
Bloomington, IN 47405
United States

Indiana University School of Public and Environmental Affairs ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

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