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Counting Regulatory Benefits and Costs: Lessons for the U.S. and Europe

38 Pages Posted: 17 May 2005  

Robert W. Hahn

University of Oxford, Smith School; Georgetown University

Robert E. Litan

Council on Foreign Relations (CFR) - Council on Foreign Relations- Washington D.C.

Abstract

This paper reviews the US and European experiences with regulatory oversight and the use of formal tools to analyze regulation. We conclude that the US and Europe have made some progress in improving regulatory analysis and oversight, but they can do much more.

We offer six recommendations for improving the quality and transparency of regulatory oversight and analysis: three recommendations for the United States and three for Europe. For the US, we suggest that: 1) The Office of Management and Budget (OMB) apply its in-house expertise to evaluate the costs and benefits of regulations; 2) Congress pass a law requiring that all federal regulatory agencies submit annual cost and benefit estimates of major regulations to OMB; and 3) OMB issue a scorecard assessing the overall quality of regulation and ask the agencies to complete a scorecard for each major regulation.

For Europe, we suggest that: 1) The European Union (EU) pass a directive specifying that the primary objective of regulation is to maximize net benefits; 2) The EU create a strong centralized regulatory oversight unit to help evaluate regulatory proposals; and 3) The EU, as well as each member state, create a structure that is balanced, which promotes efficient regulation and discourages inefficient or ineffective regulation.

Keywords: regulatory benefits and costs, U.S., Europe

JEL Classification: H00

Suggested Citation

Hahn, Robert W. and Litan, Robert E., Counting Regulatory Benefits and Costs: Lessons for the U.S. and Europe. Journal of International Economic Law, Vol. 8, No. 2, 2005; AEI-Brookings Joint Center Working Paper No. 04-07. Available at SSRN: https://ssrn.com/abstract=724301

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

Robert E. Litan

Council on Foreign Relations (CFR) - Council on Foreign Relations- Washington D.C. ( email )

1777 F Street, NW
Washington, DC 20006
United States

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