Benefit/Cost Analysis of Regulations Did Not Begin With Neither the Reagan Administration nor CWPS

 by  CRE

The use of cost-benefit analysis was initiated in the federal government by the Flood Control Act of 1936, which authorized navigation-improvement projects and flood-control projects on navigable waters within the United States only when the projects’ benefits exceeded their estimated costs. Costbenefit analysis soon became an established feature of water resources policy.


In the 1960s, the use of cost-benefit analysis expanded to other policy areas. Secretary Robert McNamara introduced it into the Department of Defense as part of the Planning Programming Budgeting System (PPBS). Impressed with its accomplishments there, in 1965 President Lyndon Johnson required the use of PPBS throughout the executive branch. As a budgetary tool it failed because, in the face of strong agency resistance and the lack of sustained presidential support, the process was too complex and demanding to be implemented effectively. Officially terminated in 1971, PPBS nevertheless left a residue of interest in policy analysis.”

 The Institutionalization of Cost-Benefit Analysis ;  Edward P. Fuchs, James E. Anderson


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