Cost–benefit analysis: New foundations on shifting sand
A review of Matthew D. Adler and Eric A. Posner's New Foundations of Cost–Benefit Analysis (Harvard University Press, 2006)
Article first published online: 7 APR 2009
© 2009 Blackwell Publishing Asia Pty Ltd
Regulation & Governance
Volume 3, Issue 1, pages 48–71, March 2009
How to Cite
Sinden, A., Kysar, D. A. and Driesen, D. M. (2009), Cost–benefit analysis: New foundations on shifting sand. Regulation & Governance, 3: 48–71. doi: 10.1111/j.1748-5991.2009.01044.x
- Issue published online: 7 APR 2009
- Article first published online: 7 APR 2009
- Accepted for publication 8 February 2009.
- cost–benefit analysis;
New Foundations of Cost–Benefit Analysis, by Matthew Adler and Eric Posner, represents the most ambitious and credible effort to date to build a solid theoretical defense of the use of cost–benefit analysis (CBA) in evaluating government regulation. In this review, three cost–benefit “skeptics” offer their reactions to this ambitious and important book. We note its virtues – its humility, its scrupulousness, its open-mindedness. We also explore its vices. If preferences are to be “laundered,” is it intellectually defensible to remove the bad but not consider adding the good? Does Adler's and Posner's welfarism really play the limited role they suppose, or does it risk “crowding out” other important deontological and distributional values? If CBA is merely a decision procedure that provides an imperfect proxy of welfare – the moral criterion we really care about – how do we know that the proxy it provides in practice will actually be accurate enough to be useful? Isn't this at bottom an empirical question that cannot be answered by this thoroughly theoretical book? If CBA is no more than an imperfect proxy for welfare, then alternative imperfect decision procedures may perform better in the real world.