by Eric Posner, E. Glen Weyl
January 09, 2014
Cost-benefit analysis is no panacea. Agencies often exaggerate the benefits of regulations or underestimate their costs, and the Office of Information and Regulatory Affairs does not have the power or resources or sometimes the political or bureaucratic incentive to keep all agencies in line all the time. But it is hard to deny that the twin requirements of CBA and OIRA supervision have improved the performance of agencies compared to the pre-1981 status quo, and there is every reason to believe that the lesson will hold good for financial regulators as well.