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What's wrong with the back of the envelope? A call for simple (and timely) benefit–cost analysis

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  • Christopher Carrigan
  • Stuart Shapiro

Abstract

Observers across the ideological spectrum have criticized benefit–cost analysis for as long as it has been part of the rulemaking process. Still, proponents and detractors agree that analysis has morphed into a mechanism often used by agencies to justify regulatory decisions already made. We argue that a simpler analysis of more alternatives conducted earlier in the regulatory process can resuscitate it as a tool to inform policy. Recognizing that requiring a procedure does not ensure that regulators will follow it, we offer possible remedies, including strengthening or relaxing subsequent review of proposed rules, which raise the cost of circumventing the reform or lower the cost of following it.

Suggested Citation

  • Christopher Carrigan & Stuart Shapiro, 2017. "What's wrong with the back of the envelope? A call for simple (and timely) benefit–cost analysis," Regulation & Governance, John Wiley & Sons, vol. 11(2), pages 203-212, June.
    • Handle: RePEc:wly:reggov:v:11:y:2017:i:2:p:203-212
    DOI: 10.1111/rego.12120
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    References listed on IDEAS

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    1. Jacopo Torriti & Ragnar Löfstedt, 2012. "The first five years of the EU Impact Assessment system: a risk economics perspective on gaps between rationale and practice," Journal of Risk Research, Taylor & Francis Journals, vol. 15(2), pages 169-186, February.
    2. Robert W. Hahn & Paul C. Tetlock, 2008. "Has Economic Analysis Improved Regulatory Decisions?," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 67-84, Winter.
    3. repec:reg:rpubli:103 is not listed on IDEAS
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