Editor’s Note: For information on the history of cost-benefit analysis, please see here at p. 41.

From: RegBlog, Penn Program on Regulation

Before a federal agency can issue a new regulation, it must usually prove that the benefits of the proposal justify its costs. In theory, this process makes vast swaths of the American regulatory regime more legitimate, efficient, and effective. But what about zoning, building codes, licensing requirements, and other state and local rules? These regulations, which can have significant impacts, rarely face the scrutiny of cost-benefit analysis.

In “Moneyball for State Regulators,” a forthcoming article in the journal National Affairs, two scholars note this asymmetry and argue that states and local entities should adopt the cost-benefit analysis procedure used by the federal government.

Harvard Professors Edward Glaeser and Cass Sunstein—the latter also previously served as Administrator of the White House Office of Information and Regulatory Affairs (OIRA)—compare their argument to the data-based transformation of baseball described in the book Moneyball. They believe drawing on the federal example and adopting cost-benefit analysis in the states could have a similarly transformative effect on the effectiveness of state regulation.

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