The triumph of regulatory politics: Benefit–cost analysis and political salience

Authors

  • Stuart Shapiro,

    Corresponding author
    1. Public Policy Program, Bloustein School of Planning and Policy, Rutgers University, New Brunswick, NJ, 08901 USA
      Stuart Shapiro, Public Policy Program, Bloustein School of Planning and Policymakers, Rutgers University, 33 Livingston Ave #274, New Brunswick, NJ 08901, USA. Email: stuartsh@rci.rutgers.edu.
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  • John F. Morrall III

    1. Mercatus Center, George Mason University, Arlington, VA, 22201, USA
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  • The authors would like to thank Scott Copeland for research assistance, the Environmental and Occupational Health Sciences Institute for research support, and two anonymous peer reviewers for helpful comments.

Stuart Shapiro, Public Policy Program, Bloustein School of Planning and Policymakers, Rutgers University, 33 Livingston Ave #274, New Brunswick, NJ 08901, USA. Email: stuartsh@rci.rutgers.edu.

Abstract

While benefit–cost analysis (BCA) is now a permanent part of the regulatory process in the United States, and many other countries around the world as well as the European Union have adopted it or are moving toward it, there have been few empirical attempts to assess either whether its use improves regulations or how BCA interacts with the political environment. We use a unique US database of the costs and benefits of 109 economically significant regulations issued between 2000 and 2009 to examine whether the amount of information provided in the BCA or political factors surrounding the regulation better correlate with the net benefits of the regulation. We find that there is little correlation between the information provided by the analysis and the net benefits. However, we find that regulations that receive few public comments and are not issued at the end of an administration, have the highest net benefits. These are the regulations that are the least politically salient. This interaction between the political environment and the economic performance of a regulation has been under-examined and deserves further study.

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