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Policy Watch: Government Analysis of the Benefits and Costs of Regulation

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  • Robert W. Hahn

Abstract

Recently, Congress has shown a greater interest in assessing the economic impact of regulation. This interest was driven in part by estimates that federal regulation costs several hundred billion dollars annually. In 1996, Congress required the director of the Office of Management and Budget to provide estimates of the total annual benefits and costs of individual regulations. This essay reviews the increasing use of economic analysis in regulatory decisionmaking, critically assesses the first 0MB report, and considers how the use of economic analysis can help inform regulatory decisionmaking. It argues that policymakers need to address a growing body of evidence that casts doubt on the effectiveness and efficiency of much regulation.

Suggested Citation

  • Robert W. Hahn, 1998. "Policy Watch: Government Analysis of the Benefits and Costs of Regulation," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 201-210, Fall.
  • Handle: RePEc:aea:jecper:v:12:y:1998:i:4:p:201-10
    Note: DOI: 10.1257/jep.12.4.201
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.12.4.201
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    References listed on IDEAS

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    1. Gary Clyde Hufbauer & Kimberly Ann Elliott, 1994. "Measuring the Costs of Protection in the United States," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 77.
    2. Hazilla, Michael & Kopp, Raymond J, 1990. "Social Cost of Environmental Quality Regulations: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 853-873, August.
    3. Clifford Winston, 1998. "U.S. Industry Adjustment to Economic Deregulation," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 89-110, Summer.
    4. Guasch, J Luis & Hahn, Robert W, 1999. "The Costs and Benefits of Regulation: Implications for Developing Countries," World Bank Research Observer, World Bank Group, vol. 14(1), pages 137-158, February.
    5. Robert W. Crandall, 1992. "Policy Watch: Corporate Average Fuel Economy Standards," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 171-180, Spring.
    6. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
    7. James T. Hamilton & W. Kip Viscusi, 1999. "Are Risk Regulators Rational? Evidence from Hazardous Waste Cleanup Decisions," American Economic Review, American Economic Association, vol. 89(4), pages 1010-1027, September.
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    Citations

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    Cited by:

    1. Jackie Krafft & Evens Salies, 2008. "Why and how should innovative industries with high consumer switching costs be re-regulated?," Documents de Travail de l'OFCE 2008-04, Observatoire Francais des Conjonctures Economiques (OFCE).
    2. Oates, Wallace E. & Portney, Paul R., 2001. "The Political Economy of Environmental Policy," Discussion Papers 10849, Resources for the Future.
    3. Mak, James & Sheehey, Christopher & Toriki, Shannon, 2010. "The passenger vessel services act and America's cruise tourism industry," Research in Transportation Economics, Elsevier, vol. 26(1), pages 18-26.
    4. Lee, D. B., 2000. "Methods for evaluation of transportation projects in the USA," Transport Policy, Elsevier, vol. 7(1), pages 41-50, January.
    5. Sumit K. MAJUMDAR, 2014. "Regulation And Job Creation: An Analysis Of Institutional Change And Its Consequences," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(2), pages 305-325, June.
    6. Nick Wills-Johnson, 2010. "Railway Dreaming: Lessons for Economic Regulators from Aboriginal Resource Management Lore," Review of Policy Research, Policy Studies Organization, vol. 27(1), pages 47-58, January.
    7. Oates, Wallace E. & Portney, Paul R., 2003. "The political economy of environmental policy," Handbook of Environmental Economics,in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 8, pages 325-354 Elsevier.
    8. Matthias Finger & Rolf W. Künneke (ed.), 2011. "International Handbook of Network Industries," Books, Edward Elgar Publishing, number 12961, December.
    9. Catarina Figueira & David Parker, 2011. "Infrastructure Liberalization: Challenges to the New Economic Paradigm in the Context of Developing Countries," Chapters,in: International Handbook of Network Industries, chapter 27 Edward Elgar Publishing.
    10. Kirkpatrick, Colin & Parker, David, 2004. "Regulation and the Privatisation of Water Services in Developing Countries: Assessing the Impact of the General Agreement on Trade in Services (GATS)," Centre on Regulation and Competition (CRC) Working papers 30600, University of Manchester, Institute for Development Policy and Management (IDPM).
    11. Parker, David, 2001. "Economic Regulation: A Preliminary Literature Review and Summary of Research Questions Arising," Centre on Regulation and Competition (CRC) Working papers 30616, University of Manchester, Institute for Development Policy and Management (IDPM).
    12. Lundkvist, Jonas & Jonsson, Bengt & Rehnberg, Clas, 2006. "The costs and benefits of regulations for reimbursement of new drugs," Health Policy, Elsevier, vol. 79(2-3), pages 337-344, December.

    More about this item

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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