Since the Reagan administration, federal agencies have been required to produce cost-benefit analyses of their major regulations. These assessments are designed to ensure that regulators are pursuing actions that make society better off.
In my experience working on the White House economic team in the Clinton and Obama administrations, I found cost-benefit analysis provides a solid foundation for understanding the impacts of regulatory proposals. It also generates thoughtful discussion of ways to design rules to maximize net benefits to the public.
On June 7, Environmental Protection Agency Administrator Scott Pruitt proposed changing the agency’s approach to this process in ways that sound sensible, but in fact are a radical departure from how government agencies have operated for decades.
By Joseph Aldy, The Conversation.