In the summer 2022 issue of Regulation I have a review of Reviving Rationality: Saving Cost-Benefit Analysis for the Sake of the Environment and Our Health by Michael A. Livermore and Richard L. Revesz.
Reviving Rationality is something of a sequel to their prior book on cost-benefit analysis, Retaking Rationality: How Cost-Benefit Analysis Can Better Protect the Environment and Our Health. In the first book (which I also reviewed), Livermore and Revesz made the case for cost-benefit analysis as a tool of progressive government. In Reviving Rationality, they note how the Obama Administration (largely) followed their advice and critique the Trump Administration for abandoning principled cost-benefit analysis in regulatory policy.
Here is a taste of my review:
Under Trump, Livermore and Revesz argue, "what is called cost–benefit analysis in a Republican administration is all but unrecognizable." CBA was no longer a tool to ensure policymakers were aware of potential regulatory consequences, but a game in which analyses were to be twisted and spun to support predetermined policy conclusions.
The result, in their view, was not simply the adoption of incoherent and harmful policies, but an assault on longstanding "norms in the American system of governance that have constrained and informed agency decision making." That, in turn, demoralized the federal workforce. What is needed now, they argue, is an effort to "double‐down" on the Obama administration's approach and go "even further to integrate cost–benefit analysis with a progressive regulatory agenda."
Much of Reviving Rationality is devoted to critiquing the Trump administration for its ill‐grounded and poorly executed deregulatory initiatives. According to the authors, many Trump actions were undertaken with insufficient analytical grounding and without regard for relevant legal constraints and procedural requirements. As a consequence, the administration lost early and often when its actions were challenged in federal court. The Environmental Protection Agency, in particular, suffered numerous early defeats in court and ultimately accomplished little in the way of lasting change, deregulatory or otherwise.
The authors' detailed critiques of several specific Trump administration initiatives are forcefully presented and often compelling. Some of their broader claims about the role of regulatory review and CBA are less powerful and are less likely to persuade those who do not share their progressive outlook and regulatory sympathies. It is one thing to excoriate the Trump administration for its disregard of the legal and administrative norms governing regulatory agency activity. It is another to brush aside concerns for aggregate regulatory burdens or suggest that ex ante cost–benefit assessments should be the central focus of regulatory policy.
And here is how my review concludes:
At its best, Reviving Rationality identifies the potential value of sensible CBA and identifies many of the foibles of CBAs gone wrong. Livermore and Revesz's detailed analyses of several Trump administration regulatory actions are insightful, even if one thinks they occasionally overstate their case.
At times, the authors seem to suggest CBA has more to offer than is actually realistic, and they too readily accept the argument that net economic benefits suggest there is a market failure that government must correct. They nonetheless offer hope that serious CBA can constrain at least some regulatory excess within progressive administrations. (Indeed, it is a shame, at this point, that neither author has been tapped to lead Biden's OIRA.)
While Reviving Rationality might not convince CBA's fiercest critics, it is an important entry in the relevant literature. It firmly establishes Livermore and Revesz as the leading progressive advocates of cost–benefit analysis.
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