Since its founding in 2007, the Society for Benefit-Cost Analysis (SBCA) has sought to engage scholars and practitioners from across the world. The Society’s current rolls count members from 35 countries. In support of expanding the Society’s international scope, the SBCA co-sponsored a workshop on September 20, 2017—together with the University of Milan and the Centre for Industrial Studies (CSIL)—titled “The Role of CBA in Government Decisionmaking: International Perspectives.” The workshop was held in conjunction with the annual Milan Summer School on Cost-Benefit Analysis of Investment Projects organized by SBCA board member Massimo Florio and CSIL. 

Overall, the international forum assembled nearly 90 institutional stakeholders, civil servants, academics, and practitioners representing more than 25 countries to share their experiences with economic evaluation in varied sectors.  In addition to presenters from academia, various public-sector institutions were represented, including the European Commission (EC), the European Investment Bank (EIB), the European Court of Auditors, the JASPERS (Joint Assistance to Support Projects in European Regions) initiative of the EU, the EU Innovation and Networks Executive Agency, and government agencies from Italy, Lithuania and Poland.

Behavioral economics finds that under predictable circumstances people sometimes fail to act rationally and in their own best self-interest. In these circumstances, public policies can nudge people towards better choices. For example, people can be nudged to save more, smoke less, lose weight, and buy more energy efficient vehicles and appliances. In addition to providing new insights about how to design public policies (see Chetty 2015), behavioral economics also has implications for how we conduct benefit-cost analysis (BCA). After all, BCA is built on the foundation of neoclassical welfare economics and rationality. This topic has been explored over the years in the Journal of Benefit-Cost Analysis, notably in a March 2016 Special Issue on [Ir]rationality, Happiness, and Benefit-Cost Analysis. 

In his new book, "Behavioral Economics for Cost-Benefit Analysis" (Cambridge University Press, 2017), David L. Weimer (University of Wisconsin – Madison) pulls together the insights of behavioral economics to provide “useful guidance for those actually doing BCA.” Because behavioral economics has wide-ranging implications for almost any policy, members of the Society for Benefit-Cost Analysis will very likely find Weimer’s book of interest. 

In the United States and elsewhere, government agencies are required to conduct regulatory impact analyses (RIAs) to weigh the benefits of regulatory proposals against their costs. These RIAs are invaluable tools for informing decision makers about the effects of regulatory choices; even regulatory decisions that are ultimately made on political, legal, ethical, or other grounds will benefit from the structured evaluation of tradeoffs and alternatives that a good RIA provides.

However, dense or complex RIAs can be challenging for policy officials and interested parties to comprehend and interpret, making it difficult to evaluate the evidence presented and to understand the likely consequences of alternative policy choices.

Consumers Guide to Regulatory Impact Analysis

While numerous guidelines are aimed at people responsible for developing RIAs, none are geared toward non-specialist policymakers and interested stakeholders who will be reading RIAs as consumers. To address that gap, the George Washington University Regulatory Studies Center gathered a diverse group of regulatory analysis experts with a goal of helping policy makers and others appreciate the value of RIAs, ask appropriate questions of them, and judge their implications for regulatory policy. The group’s final product, a “Consumers Guide to Regulatory Impact Analysis: Ten Tips for being an Informed Policymaker,” appears in the latest issue of the Journal of Benefit-Cost Analysis. The short, open access article is available without a subscription. Here is a brief summary of each of the ten tips.