Law, Politics, and Cost-Benefit Analysis
- Citation data:
64 Alabama Law Review 91 (2012).
- Publication Year:
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- Repository URL:
- https://www.repository.law.indiana.edu/facpub/772; https://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1773&context=facpub
- Cost-benefit analysis; Environmental Protection Act; Clear Skies; Environmental Law; Law and Economics
This Article explores the significant role cost–benefit analysis (CBA) plays in facilitating or impeding legislative and regulatory policy decisions. The Article centers around three case studies of CBAs the EPA prepared under three different presidents: (1) Clinton Administration changes to Clean Air Act air quality standards for ozone and particulate matter; (2) President Obama’s recent decision to suspend the EPA’s reconsideration of the Bush Administration’s air quality standard for ozone; and (3) the George W. Bush Administration’s “Clear Skies” legislative initiative. The first two case studies demonstrate, between them, how well-constructed CBAs can facilitate social-welfare-enhancing and impede welfare-reducing rules, even in cases where explicit consideration of costs is legally prohibited. The third case study tells a more complex story of how CBAs can be manipulated either to promote welfare-reducing regulations or impede welfare-enhancing regulations. When that happens, however, the virtuous transparency of CBAs renders those efforts liable to discovery and disclosure, as in the case of the Bush Administration’s failed “Clear Skies” initiative. The Article concludes with an assessment of the implications of the case studies for our understanding of the role of CBA in political (both legislative and regulatory) processes, and with a call for more qualitative and quantitative empirical research on the use and abuse of CBA as a political tool.