The Challenges of Improving the Economic Analysis of Pending Regulations: The Experience of OMB Circular A-4
AbstractFederal regulatory policy and the evaluation of regulations using benefit-cost analysis continue to be quite contentious. Advocates for more regulation claim that benefit-cost analysis loses information and impedes our understanding of the real beneficial consequences of regulatory action. Against this backdrop, economists and advocates of economic analysis have sought to improve the quality and technical content of benefit-cost analysis. This article examines key changes made by the 2003 guidelines in Circular A-4 for regulatory analysis issued by the U.S. Office of Management and Budget in an effort to strengthen such analysis. We discuss the motivation and basis for these changes—the treatment of discount rates and uncertainty and the cost-effectiveness analysis for rules affecting health and safety—and evaluate the U.S. Environmental Protection Agency's response to the A-4 changes in its analysis of environmental rules.
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Bibliographic InfoArticle provided by Annual Reviews in its journal Annual Review of Resource Economics.
Volume (Year): 3 (2011)
Issue (Month): 1 (October)
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Find related papers by JEL classification:
- K20 - Law and Economics - - Regulation and Business Law - - - General
- K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
- K32 - Law and Economics - - Other Substantive Areas of Law - - - Environmental, Health, and Safety Law
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
- Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Costs; Distributional Effects; Employment Effects
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
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