Cost-Benefit Analysis and Regulatory Impact Assessment

Author(s):  
Robert Baldwin ◽  
Martin Cave ◽  
Martin Lodge
2015 ◽  
Vol 6 (3) ◽  
pp. 361-368 ◽  
Author(s):  
Kai P.- Purnhagen ◽  
Peter H. Feindt

The European Commission's (Commission) Better Regulation Strategy (BRS) is the major guideline for the Commission to assess legislation. It draws on regulatory impact assessment (RIA) via cost–benefit analysis (CBA), expert advice, and simplification in EU law–making. Yet, the practice of RIA by the Commission as well as in EU member states, while unavoidably incomplete, has shown avoidable shortcomings. The Commission's New Better Regulation Strategy of 2015 (NBRS) contains language that appears to address these shortcomings. If pursued consequentially, it would require an approach that resembles what has been called responsive behavioural regulation. At the same time, global initiatives from inter alia the World Bank emerge to include behavioural insights into policy analysis in the form of responsive regulation. This piece assesses potential models of RIA that can help to articulate the behavioural assumptions which are implied by NBRS as enshrined in the policy document “Better regulation for better results”. The methodological implications of the NBRS require a significant departure from the reliance on classical CBA, which is characteristic for the previous “Better Regulation” documents submitted by the Commission and which we term Old Better Regulation Strategy (OBRS).


2019 ◽  
Vol 11 (6) ◽  
pp. 1687 ◽  
Author(s):  
Lisa Hansson ◽  
Lena Nerhagen

International organisations, such as the Organization for Economic Co-operation and Development (OECD) and the European Union (EU), are seeking to implement a cohesive Regulatory Impact Assessment (RIA) system in order to achieve better regulation and increased unity and transparency. Central to these evaluations is the use of cost-benefit analysis (CBA) and related tools. A comprehensive analysis of the use of impact assessment in the EU shows that many assessments lack important economic components. This paper draws on an extensive document study of the Swedish policy making process related to the EU Directive 2009/28/EC on the promotion of the use of energy from renewable sources. The aim of the paper is to examine how CBA is presented, negotiated and accounted for by central actors within a policy setting influenced by negotiation and policy coordination. The paper departs from a theoretical perspective on policy coordination and shows how this factor must be considered when explaining the low use of CBA. It concludes that the Swedish policy tradition, wherein the national government relies on consensus-based coordination between agencies, might counteract a more explicit assessment of different policy options. The paper also proposes a model that can be used for further studies on CBA and policy coordination.


1990 ◽  
Vol 10 (1-2) ◽  
pp. 55-68 ◽  
Author(s):  
Tor Hundloe ◽  
Geoffrey T. McDonald ◽  
John Ware ◽  
Leanne Wilks

2021 ◽  
Vol 14 (1) ◽  
pp. 24
Author(s):  
Thomas L. Hogan

This paper reviews the cost-benefit analysis, or “regulatory impact analysis” (RIA), in US bank regulators’ risk-based capital (RBC) rule proposals. We review the principles of cost-benefit analysis and its application by US bank regulators. We provide a brief background on RBC rules and review the literature on their costs and benefits. We then evaluate 27 proposed RBC rules and related rules on bank liquidity. We find that nine of the 27 rules include RIAs. Five of the RIAs claim the proposed rule will create net benefits, but none provide quantitative evidence that the benefits exceed the costs. In two proposals, the evidence cited indicates the rules’ net benefits may actually be negative.


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