Rethinking the Role of Cost-benefit Analysis

Retaking Rationality: How Cost-benefit Analysis Can Better Protect the Environment and Our Health. Richard L. Revesz and Michael A. Livermore. Oxford, 2008. Pp 1, 236.

For almost thirty years, regulatory agencies like the Environmental Protection Agency (EPA) have been required to perform costbenefit analyses that are subject to review by the Office of Management and Budget (OMB). Richard Revesz and Michael Livermore argue in Retaking Rationality that cost-benefit analysis (CBA) has been distorted and misused by conservative opponents of regulation. They persuasively advocate a series of useful reforms to provide more balance while keeping CBA as a key decisionmaking tool. Eschewing any desire to make CBA a “master decisionmaking procedure capable of trumping all other values,” they argue only that it “can be useful without being the alpha and omega of policy analysis” (p 15). Retaking Rationality provides convincing support for environmentalist claims that CBA has been used as a screen for ideologically driven attacks on regulation.