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“We Test”: An Imagined Regulatory Future

Published online by Cambridge University Press:  15 December 2022

Cass R. Sunstein
Cass R. Sunstein*
Affiliation:
Harvard University, Cambridge, MA, USA
*
*Corresponding author: e-mail: [email protected]
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Abstract

There can be a serious tension between the commitment to cost-benefit analysis and a realistic appreciation of the limits of official knowledge. Without significant efforts to reduce those limits, that analysis might be inadequately informed. Whenever regulators face significant informational deficits, or what is sometimes called “the knowledge problem,” it is important to explore tools that take advantage of what the private sector knows; market-friendly tools, such as economic incentives, have important advantages on that count. An advanced regulatory system should also try to reduce the knowledge problem through three routes: (i) creative use of notice-and-comment rulemaking; (ii) retrospective analysis of regulations and their costs and benefits; and (iii) advance testing, as a way of informing ex ante analysis. For the future, the most promising approach is (iii).

Keywords

benefit-cost analysisnotice and commentrandomized controlled trialsregulationretrospective policy analysisO21K23C90L51C12
Type
Invited Paper
Information
Journal of Benefit-Cost Analysis , Volume 13 , Issue 3 , Fall 2022 , pp. 269 - 280
Copyright
© The Author(s), 2022. Published by Cambridge University Press on behalf of the Society for Benefit-Cost Analysis

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Footnotes

This essay was the basis for the keynote address given at a conference on Agile Governance, held in Washington, DC, on 26 April 2022; readers are asked to make allowances for the informality of what was originally an oral presentation. Some parts of the essay draw on a chapter in Sunstein (2018).

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