This week, I’m posting a new web article documenting the arbitrariness and subjectivity that cost-benefit analysis injects into regulatory decision-making, the latest installment in CPR’s Beyond 12866 initiative. Specifically, the piece explains how cost-benefit analysis deploys a wide variety of methodological techniques that can be clumsy, unscientific, ethically dubious, and, too often, downright absurd. As a result, the “information” that cost-benefit analysis generates is so lacking in credibility and rigor that it is arguably worse than useless. In many cases, agency decision-makers would be better off if the analysis had never been performed at all.
It is particularly important to understand the inescapable subjectivity and irrationality of cost-benefit analysis, since defenders of the methodology like to claim that it is necessary to ensure that objectivity and rationality guide regulatory decision-making. The web article offers several recent case studies unequivocally demonstrating how cost-benefit analysis consistently fails in serving this purpose, however. They include the Environmental Protection Agency’s “higher IQ penalty” for protecting children’s brains from drinking water poisoned with lead and the Department of Justice’s horrific attempt to reduce the prevention of prison rape to dollars-and-cents terms.
The article draws a straight line between the pseudoscience of cost-benefit analysis as practiced to the methodology’s controversial theoretical foundation in welfare economics. For the analysis to work, practitioners must convert to monetary terms as many regulatory impacts as they can. This imperative in turn leads the practice to stray well beyond the boundaries of common sense and broadly shared ethical commitments.
But does it have to be this way? After all, as the web article notes, there are any number of alternative approaches to regulatory analysis that provide useful information to decision-makers while steering clear of the risible failings of the “monetize everything” version of cost-benefit analysis.
The good news is that it is possible to restore scientific integrity and methodological rigor to regulatory analysis. I close the article by laying out a game plan for accomplishing just that. In particular, I urge progressive advocates to join together to call for the repeal of Executive Order 12866 and fight for a new executive order that advances a progressive vision of regulation. Among other things, such an order should bar the practice of the monetize-everything version of cost-benefit analysis and instead direct agencies to use the context-specific methods specified in their authorizing statutes for considering costs and benefits.
In addition, the web article urges a future White House Office of Information and Regulatory Affairs (OIRA) administrator to change the anti-regulatory culture that now prevails there. One important step to take in this regard is to diversify the economist-heavy OIRA staff by hiring individuals with expertise in other disciplines, such as sociology, public health, law, environmental sciences, and communications.
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James Goodwin | October 29, 2020
This week, I’m posting a new web article documenting the arbitrariness and subjectivity that cost-benefit analysis injects into regulatory decision-making, the latest installment in CPR’s Beyond 12866 initiative. Specifically, the piece explains how cost-benefit analysis deploys a wide variety of methodological techniques that can be clumsy, unscientific, ethically dubious, and, too often, downright absurd.
Darya Minovi | October 28, 2020
If you want to know what the world will look like as the climate crisis ramps up, you don't need a crystal ball. In fact, you need look no further than the past few months of 2020. Western states are fighting record-breaking wildfires, major flooding has plagued the Midwest, and we are in the midst of a historic hurricane season. On October 20, CPR convened a group of researchers, advocates, and community organizers to discuss how the increasing frequency of extreme weather may impact coastal communities, especially those near hazardous industrial facilities vulnerable to damage.
Katlyn Schmitt | October 22, 2020
Earlier this month, Congress overwhelmingly passed America's Conservation Enhancement Act (ACE). The legislation's dozen-plus conservation initiatives include reauthorizations for important programs that help protect the Chesapeake Bay and wetlands across the country.
Darya Minovi, Katlyn Schmitt | October 21, 2020
Dangerous nitrate pollution has contaminated the groundwater that supplies private drinking water wells and public water utilities in several agricultural regions across the United States, posing a significant threat to people's health. A new report from the Center for Progressive Reform (CPR) indicates that this problem has reached Maryland's Lower Eastern Shore, an area that's home to hundreds of concentrated animal feeding operations (CAFOs) and millions of chickens.
James Goodwin | October 19, 2020
For many of us, the prospect of a Supreme Court with Judge Amy Coney Barrett giving conservatives a solid 6-3 supermajority is nightmare fuel. The consequences extend beyond hot-button social issues, such as women's reproductive rights or individual access to affordable health care. If confirmed, Barrett would likely spur the aggressive pro-business agenda that the Court has pursued under the auspices of Chief Justice John Roberts. A key item on that agenda is overturning something called Chevron deference, which some business groups have made a top priority in their broader campaign to bring about, as former White House Chief Strategist Steve Bannon put it, the "deconstruction of the administrative state."
James Goodwin | October 15, 2020
Recently, the Center for Progressive Reform (CPR) launched its Beyond 12866 initiative, which seeks to promote progressive regulatory reform as a key component of the progressive movement’s efforts to build a more socially just and equitable America. To accomplish this goal, though, we must come to grips with how the regulatory system is perpetuating racial injustice and reinforcing race-based inequities. In a new web article, I take this first step by sketching out some of the ways in which cost-benefit analysis has contributed to structural racism in the broader regulatory system.
Darya Minovi | October 5, 2020
Amidst the president and First Lady testing positive for COVID-19, an embarrassing spectacle of a presidential "debate," and a pandemic that has now claimed more than 200,000 lives in the United States and 1 million worldwide, the West Coast wildfires have lost the attention of the national news cycle. But California and nearby states are still very much ablaze.
James Goodwin | October 1, 2020
In a previous post, I discussed the essentially undemocratic ways that conservatives have come to the brink of a 6-3 majority on the Supreme Court and examined one significant implication for regulatory policy: the likely effect on the Court's view on Chevron deference. In this second post, I explore several other ways the Court could undermine the essential democratic character of the regulatory system.
James Goodwin | September 30, 2020
Last week, Matthew Yglesias published an important piece at Vox explaining the many ways conservatives have succeeded in exploiting fundamentally undemocratic features of our constitutional structure of government to advance their policy agenda. This strategy will have reached its grotesque culmination if they manage to seat Judge Amy Coney Barrett on the U.S. Supreme Court. He’s rightfully angry about the situation -- as should we all be -- but the story he tells, thorough and infuriating as it is, misses an important point: It could actually get much worse.