Economic analysis has been a key tool in making regulatory policy since 1981, when Ronald Reagan became president, with cost-benefit reviews increasingly being applied to initiatives. The idea is to assign monetary values to regulation, such as installing pollution-control technology or overhauling assembly lines to avoid repetitive-motion injuries to workers. That number is then weighed against benefits, such as how many illnesses could be avoided or lives saved. Although the report’s general assessment is gloomy, it suggests that putting rules under an economic microscope is worthwhile since analysis can save billions of dollars at the margins. “It certainly does matter in selected instances,” said Robert W. Hahn, a scholar at the American Enterprise Institute and co-author of the report with Paul C. Tetlock, an assistant professor at the University of Texas at Austin. “Our findings suggest that government regulatory analyses are a lot like chicken soup: They typically do no harm, and in some instances, they help a lot.”
Does Cost-Benefit Analysis Matter?