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Humanizing Cost-Benefit Analysis

Published online by Cambridge University Press:  20 January 2017

Cass R. Sunstein
Cass R. Sunstein*
Affiliation:
Office of Information and Regulatory Affairs (OIRA) at US Office of Management and Budget
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Extract

In the last twenty months, the Obama Administration has been taking an approach to regulation that is distinctive in three ways.

First, we have approached regulatory problems not with dogma or guesswork, but with the best available evidence of how people really behave.

Second, we have used cost-benefit analysis in a highly disciplined way, not to reduce difficult questions to problems of arithmetic, but as a pragmatic tool for cataloguing, assessing, reassessing, and publicizing the human consequences of regulation – and for obtaining public comment on our analysis. This emphasis on human consequences – on reducing or eliminating unjustified burdens on the private sector and on ensuring that high costs are justified by high benefits – is especially important in a period of economic difficulty. We have worked to put into place important safeguards while also making regulation compatible with the economic recovery, and while reducing the risk that costly regulations will have adverse effects on job creation, wages, prices, and economic growth as a whole.

Type
Symposium on Regulatory Reform in the EU and the US
Information
European Journal of Risk Regulation , Volume 2 , Issue 1 , March 2011 , pp. 3 - 7
Copyright
Copyright © Cambridge University Press 2011

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References

1 On the importance of such steps, see Eric P. Bettinger et al., “The Role of Simplification and Information in College Decisions: Results from the H & R Block FAFSA Experiment”, available on the Internet at <http://ssrn.com>.

2 See Hunt Allcott, “Social Norms and Energy Conservation”, available on the Internet at <http://web.mit.edu/allcott/www/Allcott%202009%20-%20Social%20Norms%20and%20Energy%20Conservation.pdf>.

3 See Nicholas Christakis and James Fowler, Connected: The Surprising Power of Our Social Networks and How They Shape Our Lives (2009), p. 199.

4 Id.

5 See Hint Allcott and Sendhil Mullainathan, “Behavioral Science and Energy Policy” (2009), available on the Internet at <http://web.mit.edu/allcott/www/Allcott%20and%20Mullainathan%202009%20-%20Behavioral%20Science%20and%20Energy%20Policy.pdf>.