Centralized Regulatory Review began in 1971 when the Director of OMB instituted the Quality of Life Review which required agencies to:
(1) perform a benefit-cost analysis of proposed regulations, and
(2) submit the aforementioned analysis to OMB for review.
During the past one-half a century the aforementioned process has withstood criticism, threats and even unconscionable reductions in staff levels. It has, however, made modifications to its operating procedures in response to some of the aforementioned criticisms.
Fifty years ago the architects of centralized regulatory review were primarily economists with a strong background in neoclassical economics. In the intervening half century new disciplines have emerged whose subject matter could enhance the management of the Administrative State. Consequently it is timely that the President has issued an Executive Order directing a review of Centralized Regulatory Review with the objective of modernizing it.
Therefore in response to the Executive Order and under the aegis of the Society for Benefit-Cost Analysis, the Center for Regulatory Effectiveness is conducting a discussion of three options for the possible modernization of Centralized Regulatory Review, each aimed at possibly opening the door to the consideration of income distribution. These options are:
(1) Well-Being Analysis
- aka market price studies v. hedonic psychological studies
- Analytical Base # 1
- Analytical Base # 2(a)
- Analytical Base # 2(b)
(2) The Use of Distributional Weights
(3) Addressing Opportunity Cost Neglect in Public Policy Decisions
Suggestions before or after the discussion may be sent to CRE. CRE intends to issue a summary report.
NB The term “benefit-cost analysis” is used throughout this website in lieu of “cost-benefit analysis”, a term commonly championed in the literature by members of the legal profession who have demonstrated a continued, forceful and productive participation in the management of the Administrative State. (Benefit-Cost Analysis of public works and federal regulations began in the Corps of Engineers who calculated benefit-cost ratios [ not cost-benefit ratios] for the former as required by statute.)
For those interested in what we hope to be a continued discussion of the management of the Administrative State as a result of the recent Presidential Executive Order, we call your particular attention to the CRE search engine which examines thousands of pages of material on centralized regulatory review on its website as well as nearly 500 journal articles posted in the CRE library.
One focus of the review is to discuss and analyze statements similar to the one below advanced by the proponents of Well-Being Analysis (WBA):
However, WBA cures many of the largest problems of CBA. It is capable of implementation right away, and even in its infancy can be expected to produce analyses comparable in level of precision to the ones CBA now produces after three decades of refinement.
The author’s of the above statement offer the analysis in the following to support their conclusions (p. 26), see this publication. Kudos to the authors for providing real world examples of the impacts of their recommendations; this type of transparency adds to an informed review.