A New Executive Order for Improving Federal Regulation? Deeper and Wider Cost-Benefit Analysis

62 Pages Posted: 26 Mar 2002

See all articles by Robert W. Hahn

Robert W. Hahn

University of Oxford, Smith School; Georgetown University

Cass R. Sunstein

Harvard Law School; Harvard University - Harvard Kennedy School (HKS)

Date Written: March 2002

Abstract

For over two decades, federal agencies have been required to analyze the benefits and costs of significant regulatory actions and to show that the benefits justify the costs. But the regulatory state continues to suffer from significant problems, including poor priority-setting, unintended adverse side-effects, and, on occasion, high costs for low benefits. In many cases, agencies do not offer an adequate account of either costs or benefits, and hence the commitment to cost-benefit balancing is not implemented in practice. A major current task is to ensure a deeper and wider commitment to cost-benefit analysis, properly understood. We explain how this task might be accomplished and offer a proposed executive order that would move regulation in better directions. In the course of the discussion, we explore a number of pertinent issues, including the actual record of the last two decades, the precautionary principle, the value of prompt letters the role of distributional factors, and the need to incorporate independent agencies within the system of cost-benefit balancing.

JEL Classification: H1, H8, L5, N4

Suggested Citation

Hahn, Robert W. and Sunstein, Cass R., A New Executive Order for Improving Federal Regulation? Deeper and Wider Cost-Benefit Analysis (March 2002). AEI-Brookings Joint Center for Regulatory Studies Working Paper No. 02-4. Available at SSRN: https://ssrn.com/abstract=304203 or http://dx.doi.org/10.2139/ssrn.304203

Robert W. Hahn (Contact Author)

University of Oxford, Smith School ( email )

Oxford
United Kingdom

Georgetown University

Georgetown Center for Business and Public Policy
Washington, DC 20057
United States

Cass R. Sunstein

Harvard Law School ( email )

1575 Massachusetts Ave
Areeda Hall 225
Cambridge, MA 02138
United States
617-496-2291 (Phone)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

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