The Law and Political Economy (LPE) Project recently launched a symposium that promises to examine cost-benefit analysis (CBA) under the critical lens of political science, law, and philosophy. The introductory post by legal scholar Frank Pasquale can be found here, and after surveying a number of the issues with CBA, summarizes the symposium's intent and future participants in its final paragraph:
The challenge to CBA is now clear. If it is to be a tool of policy evaluation worth supporting, we must embed it in political frameworks that make CBA just as prone to catalyzing regulation, as to derailing it. Moreover, the limits of quantification must be squarely addressed. Posts in this symposium demonstrate a way forward on both fronts, enriching CBA with both immanent and transcendent critiques of past OIRA missteps. We will be thrilled to welcome the symposiasts over the coming weeks: Beth Popp Berman, James Goodwin, Lisa Heinzerling, Zachary Liscow, Melissa Luttrell, Jorge Romano-Romero, Mark Silverman, Amy Sinden, and Karen Tani. Each has done important work in the field, and LPE Blog is honored to host their contributions.
The first full post, by legal scholar Lisa Heinzerling, discusses CBA in the context of the dual concerns of racial justice and climate change. She asks whether CBA can adequately appreciate the true benefits of action on these fronts, given its reliance on discounting of future benefits (which is highly sensitive to the specific discount rate chosen) and monetary valuation of benefits (which does not apply well to issues involving dignity and rights). She concludes by suggesting an alternative evaluative approach to these policy issues:
Discounting and monetary valuation are so central to the cost-benefit method that it is hard to imagine cost-benefit analysis without them. Happily, though, it is easy to imagine White House regulatory review without cost-benefit analysis. The vast majority of federal regulatory statutes do not require cost-benefit analysis. Many do not even allow it. Instead of evaluating major rules by asking whether they satisfy the test of formal cost-benefit analysis, the White House could ask whether the rules faithfully follow the relevant statutory framework and whether the agencies have rigorously analyzed the evidence in front of them. This simple reform would not only avoid the conundrums posed by cost-benefit analysis. It would also close the gap that has opened between the regulatory standards set by Congress and the cost-benefit metric that recent presidents have preferred.
This symposium is shaping up to be a valuable and fascinating survey of the numerous moral, legal, and political issues with cost-benefit analysis, and we'll likely be highlighting more contributions here as it continues.