Cost-Benefit Analysis Versus the Precautionary Principle: Beyond Cass Sunstein's Laws of Fear

Abstract

Perhaps the quintessential role of government is to protect its citizens from threats of all types: war, global warming, terrorism, disease, toxic substances. This essay provides a review and cri-tique of Sunstein's innovative contribution to the lively debate over how government should perform this role, a debate that often pits cost-benefit analysis against the precautionary principle. The authors contend that Sunstein's critique of the precautionary prin-ciple has merit, but that his much-discussed Laws of Fear propos-als are deficient in several significant respects. Sunstein's pro-posals fail to solve problems related to cost-benefit analysis, implementation of deliberative democracy, and incorporation of social values into responses to threats. The essay concludes with a recommendation for reconceptualizing the precautionary prin-ciple in a manner that saves it from Sunstein's critiques.

Keywords: Cost benefit, precautionary principle, threat, risk, fear, technology

JEL Classification: H11, K00, K32, K33, L51, O13, O14, O33, O38, Q17