Cost-Benefit Analysis and Agency Independence

The University of Chicago Law Review 81(2): 609-688

Michael A. Livermore

The presidential mandate that agency rule makings be subjected to cost-benefit analysis and regulatory review is one of the most controversial developments in administrative law over the past several decades. 

There is a prevailing view that the role of cost-benefit analysis in the executive branch is to help facilitate control of agencies by the Office of Information and Regulatory Affairs (OIRA). This Article challenges that view, arguing that cost-benefit analysis in fact helps preserve agency autonomy in the face of oversight. This effect stems from the constraints imposed on reviewers by the regularization of cost-benefit-analysis methodology and the fact that agencies have played a major role in shaping that methodology. The autonomy-preserving effect of cost-benefit analysis has been largely ignored in debates over the institution of regulatory review. Ultimately, cost-benefit analysis has ambiguous effects on agency independence, simultaneously preserving, informing, and constraining agency power.

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