Research: Reviving more than rationalitiy–using cost-benefit analysis to evaluate regulations

November 12, 2021

by Marcia Hannigan

In a blog post for the Yale Journal on Regulation titled “Reviving More Than Rationality,” Stuart Shapiro comments on Michael Livermore and Richard Revesz’s book Reviving Rationality: Saving Cost-Benefit Analysis for the Sake of the Environment and Our Health. The book offers observations regarding the use of cost-benefit analysis to evaluate the effects of regulations on the U.S. and its economy.

Cost-benefit analysis became particularly contentious during the Trump administration.  The idea that some government employees had the expertise and were neutral in their application of cost-benefit analysis was regarded by the Trump administration with antipathy.

The administration ignored cost-benefit analysis in favor of “cost analysis” of regulation.  Benefits of regulation or legislation were not considered. Additionally, much of the cost-benefit analyses done during this period were deeply flawed. Scientific knowledge and the idea of a neutral civil service were also deeply suspect during the Trump administration.  The response to the Covid-19 pandemic and the denial of human-caused climate change derailed attempts to address these crises. 

These views, coupled with the disdain for the expertise of civil servants, led to the attempt to reclassify civil servants as “Schedule F” employees, making them subject to easier dismissal and replacement. The Trump administration was so suspicious of civil service employees and “neutral” cost-benefit analysis that the first agency it looked to clear out was the Office of Management and Budget, the home to the very agency responsible for doing cost-benefit analysis, the Office of Information and Regulatory Affairs (OIRA).

Some economists argue that scientific experts are too quick to tout the benefits of laws and regulations but slow to acknowledge the costs.  While the Trump administration was not ultimately successful in its attempts to defenestrate OIRA, it did lead to political benefits for those seeking to strengthen the executive branch’s hold on policy.  It questions the idea of neutrality and expertise and has fostered a large political realignment in opposition to both. 

For more information about regulation, cost-benefit analysis and expertise, visit https://www.yalejreg.com/nc/symposium-reviving-rationality-part-05/ to read the full blog post.

Recent Posts

Tariff Uncertainty and its Impact on Economic Forecasting

R/ECON’s next economic forecast is slated for release in mid-summer, followed by another forecast in the fall. As we track the latest state data and national outlook, we (much like everyone else) have been closely following the news on tariffs, the Fed’s potential...

Heldrich Center: Using Data to Help Bolster Workforce Initiatives

The John J. Heldrich Center for Workforce Development provides research expertise and analysis to organizations, including the Fed, to help improve education, training, and workforce development programs that affect employers and employees. By Jennie Blizzard, Fed...

NJSPL Announces 2025 Summer Interns

The New Jersey State Policy Lab is excited to announce that the fourth annual summer internship program has begun at the Bloustein School of Planning and Public Policy. Six students have been selected to participate in this year’s program, which will encompass ten...

“Work Trends RU” Podcast with First Lady Tammy Murphy

In the latest episode of the Heldrich Center for Workforce Development's new podcast series, "Work Trends RU," Tammy Murphy, First Lady of New Jersey, discusses her leadership in maternal and infant health in New Jersey, the impacts of the Nurture NJ and Family...

NJSPL: Chatbot for NJ SNAP Services

Working Toward an Equitable Chatbot for NJ SNAP Services New Jersey State Policy Lab, Vignesh Krishnan, Yonaira Rivera, Vivek Singh In New Jersey, Supplemental Nutrition Assistance Program (SNAP) services are vital for supporting food security among low-income...