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The Cost-Benefit Revolution
Why policies should be based on careful consideration of their costs and benefits rather than on intuition, popular opinion, interest groups, and anecdotes. Opinions on government policies vary widely. Some people feel passionately about the child obesity epidemic and support government regulation of sugary drinks. Others argue that people should be able to eat and drink whatever they like. Some people are alarmed about climate change and favor aggressive government intervention. Others don't feel the need for any sort of climate regulation. In The Cost-Benefit Revolution , Cass Sunstein argues our major disagreements really involve facts, not values. It follows that government policy should not be based on public opinion, intuitions, or pressure from interest groups, but on numbers—meaning careful consideration of costs and benefits. Will a policy save one life, or one thousand lives? Will it impose costs on consumers, and if so, will the costs be high or negligible? Will it hurt workers and small businesses, and, if so, precisely how much? As the Obama administration's “regulatory czar,” Sunstein knows his subject in both theory and practice. Drawing on behavioral economics and his well-known emphasis on “nudging,” he celebrates the cost-benefit revolution in policy making, tracing its defining moments in the Reagan, Clinton, and Obama administrations (and pondering its uncertain future in the Trump administration). He acknowledges that public officials often lack information about costs and benefits, and outlines state-of-the-art techniques for acquiring that information. Policies should make people's lives better. Quantitative cost-benefit analysis, Sunstein argues, is the best available method for making this happen—even if, in the future, new measures of human well-being, also explored in this book, may be better still.
288 pages, Hardcover
Published August 28, 2018
51 people are currently reading
495 people want to read
About the author
Cass R. Sunstein
170 books748 followersCass R. Sunstein is an American legal scholar, particularly in the fields of constitutional law, administrative law, environmental law, and law and behavioral economics, who currently is the Administrator of the White House Office of Information and Regulatory Affairs in the Obama administration. For 27 years, Sunstein taught at the University of Chicago Law School, where he continues to teach as the Harry Kalven Visiting Professor. Sunstein is currently Professor of Law at Harvard Law School, where he is on leave while working in the Obama administration.
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Displaying 1 - 12 of 12 reviews
May 3, 2021
A superb journey through regulatory cost-benefit analysis. For someone coming at this from health economics it was highly illuminating to hear how CBA is applied in the regulatory impact setting. The history lesson on CBA was appreciated too. But perhaps best of all was the sheer enthusiasm of the author for technocratic approaches to tackling difficult problems, highly welcome in an age of increasing partisanship.
January 22, 2022
The Cost-Benefit Revolution (2018) by Cass Sunstein is a disappointing book about cost benefit analysis (CBA) for government. Sunstein was a professor at the University of Chicago Law School who has worked in the US government and worked in the Obama administration.
Cost-Benefit analysis is presumably regarded by most people as a very useful tool for government but it is a really dry topic. Alas Sunstein fails to bring it to life and indeed arguably makes the topic even duller than most people would presume it to be.
In the US the Reagan administration created a rule about regulations that said that they had to pass cost-benefit analysis. This was updated by the Clinton administration and then the Obama administration. Sunstein then remarks that under Obama for some reason there was a ‘cost benefit revolution’. Sunstein was the head of the White House Office of Information and Regulatory Affairs. Amusingly Sunstein states that he never saw, under Obama, anything that failed to pass cost-benefit analysis. It would be very interesting to find out if he had any idea of the 8Bn that was spent on working on high speed rail for the US and what sort of cost-benefit analysis that had.
The idea of getting people to put values of cost benefit rules into prospective regulation and for things like transport spending is undoubtedly a really good idea that few people would object to. It will, of course, fail on income redistribution and defense and presumably on the justice system. Ideally, if something passes cost benefit analysis it would also later be analysed to see if the analysis was valid. Alas the book has none of that despite the fact the cost benefit analysis has been part of the US government and other governments tool kits for many years.
The book looks at environmental rules, the role of the court with cost benefit analysis, has a recent history of cost benefit analysis in the US government and looks at CBA on food labels and regarding environmental legislation. Sunstein also tries to stretch it to national security and free speech rules.
The Cost Benefit Revolution is a book with laudable aims that may be of some interest to policy workers and legal scholars. It’s a disappointing book though that fails to bring to life its admittedly dry subject matter.
Cost-Benefit analysis is presumably regarded by most people as a very useful tool for government but it is a really dry topic. Alas Sunstein fails to bring it to life and indeed arguably makes the topic even duller than most people would presume it to be.
In the US the Reagan administration created a rule about regulations that said that they had to pass cost-benefit analysis. This was updated by the Clinton administration and then the Obama administration. Sunstein then remarks that under Obama for some reason there was a ‘cost benefit revolution’. Sunstein was the head of the White House Office of Information and Regulatory Affairs. Amusingly Sunstein states that he never saw, under Obama, anything that failed to pass cost-benefit analysis. It would be very interesting to find out if he had any idea of the 8Bn that was spent on working on high speed rail for the US and what sort of cost-benefit analysis that had.
The idea of getting people to put values of cost benefit rules into prospective regulation and for things like transport spending is undoubtedly a really good idea that few people would object to. It will, of course, fail on income redistribution and defense and presumably on the justice system. Ideally, if something passes cost benefit analysis it would also later be analysed to see if the analysis was valid. Alas the book has none of that despite the fact the cost benefit analysis has been part of the US government and other governments tool kits for many years.
The book looks at environmental rules, the role of the court with cost benefit analysis, has a recent history of cost benefit analysis in the US government and looks at CBA on food labels and regarding environmental legislation. Sunstein also tries to stretch it to national security and free speech rules.
The Cost Benefit Revolution is a book with laudable aims that may be of some interest to policy workers and legal scholars. It’s a disappointing book though that fails to bring to life its admittedly dry subject matter.
December 31, 2021
A great exploration of the difficulties of using cost-benefit analysis in real world situations. I thought the writing could have been a little clearer. Useful explanations of case law. I enjoyed his observations connecting CBA to different sides of the political spectrum and would have liked more on that.
October 28, 2018
Sunstein, the co-author of Nudge and former head of the Office of Information and Regulatory Affairs under Obama, has written a pretty nice little primer/ manifesto for evidence-based policy, with cost-benefit analysis as the means to that end. Sunstein himself is not an economist (rather, a former lawyer), so this is not a theory heavy econ-text (not a single graph or chart, in fact!), but instead comes from the public policy perspective. (The cover blurb, from Larry Summers, fittingly recommends this book to any future president). As such the book looks into cases and circumstances that make policy decisions difficult, where CBA can add clarity, and where CBA itself may be confounded. Examples include GMO regulation, national security vs privacy concerns, and climate change, among a host of other, more minor environmental and transportation examples.
Despite being quite short and non-academic, it's also not a super fun entertaining read, in the vein of some other pop-sci books. It does, however, raise interesting questions, provide interesting avenues of addressing those questions, and show an interesting insider-perspective of the policy process. An interesting book, I suppose, and one I'd recommend to those with an interest in how governments make, or should make, decisions.
The one thing I would have liked to see more of was this latter insider-perspective: Sunstein was afforded a rare role and view inside this great sausage-making policy process, and it would have been insightful to get a better view of how this does end up actually playing out, rather than just how it should work. Anyway, a solid little book in defense of a process, CBA, that seeks a more impartial, technocratic approach to government and society - certainly a goal worthy of due attention.
Despite being quite short and non-academic, it's also not a super fun entertaining read, in the vein of some other pop-sci books. It does, however, raise interesting questions, provide interesting avenues of addressing those questions, and show an interesting insider-perspective of the policy process. An interesting book, I suppose, and one I'd recommend to those with an interest in how governments make, or should make, decisions.
The one thing I would have liked to see more of was this latter insider-perspective: Sunstein was afforded a rare role and view inside this great sausage-making policy process, and it would have been insightful to get a better view of how this does end up actually playing out, rather than just how it should work. Anyway, a solid little book in defense of a process, CBA, that seeks a more impartial, technocratic approach to government and society - certainly a goal worthy of due attention.
June 14, 2020
Sunstein, a Harvard law professor, has served in several administrations, both Republican and Democratic. In this book, he exposits his experience in regulation to suggest more effective ways to do so. Instead of partisan pro-con analysis, he suggests to measure costs and benefits, an idea originally implemented by Reagan through the Office of Information and Regulatory Affairs (OIRA). This practice provides a pragmatic – Sunstein calls it “technocratic” – way of assessing which regulations are helpful and which aren’t.
Sunstein points out that regulation, in and of itself, is not always a good thing and that deregulation, in and of itself, is not always a good thing either. Rather, we have to estimate and measure the monetary costs and benefits. He points out that the government, as a rule of thumb, measures the statistical value of a human life as $9 million. Although this seems controversial, this is merely an expedient way to factor value. It provides a way to quantify human sentiments and to judge their worth.
The Obama administration seemed to be helped by such pragmatism. Sunstein notes that many were stultified by the administration’s changing stances of being labeled “pro-environmentalist” one day and “pro-business” the next. He explains that the cost-benefit analysis merely rendered different verdicts. Such reasoning, which has evolved since its inception under Reagan, surely has brought about positive change in the well-being of the U.S. citizen. At least, Sunstein notes positive effects and its place in American legal theory under the “general welfare” clause of the Constitution.
As with most works of economics, this book engages reason applied in the long term as the best way to economic prosperity and happiness. He admonishes the Trump administration for abandoning such ideals in favor of populist deregulation. He notes that this is a change in Republican policy and that this disagrees with the policies of Reagan, H.W. Bush, and W. Bush.
I like Sunstein’s voice. His legal and ethical reasoning are quite strong. He heavily relies upon utilitarianism, but not entirely. His decades of experience in the federal government elucidate wisdom applied to present-day problems. This book hopefully will contribute to America’s and the world’s economic success in coming generations.
Sunstein points out that regulation, in and of itself, is not always a good thing and that deregulation, in and of itself, is not always a good thing either. Rather, we have to estimate and measure the monetary costs and benefits. He points out that the government, as a rule of thumb, measures the statistical value of a human life as $9 million. Although this seems controversial, this is merely an expedient way to factor value. It provides a way to quantify human sentiments and to judge their worth.
The Obama administration seemed to be helped by such pragmatism. Sunstein notes that many were stultified by the administration’s changing stances of being labeled “pro-environmentalist” one day and “pro-business” the next. He explains that the cost-benefit analysis merely rendered different verdicts. Such reasoning, which has evolved since its inception under Reagan, surely has brought about positive change in the well-being of the U.S. citizen. At least, Sunstein notes positive effects and its place in American legal theory under the “general welfare” clause of the Constitution.
As with most works of economics, this book engages reason applied in the long term as the best way to economic prosperity and happiness. He admonishes the Trump administration for abandoning such ideals in favor of populist deregulation. He notes that this is a change in Republican policy and that this disagrees with the policies of Reagan, H.W. Bush, and W. Bush.
I like Sunstein’s voice. His legal and ethical reasoning are quite strong. He heavily relies upon utilitarianism, but not entirely. His decades of experience in the federal government elucidate wisdom applied to present-day problems. This book hopefully will contribute to America’s and the world’s economic success in coming generations.
April 21, 2019
Fin og bred oppsummering av kost-nytte-analyse. Starter aggressivt med å love at boka skal vise hvordan denne metoden kan redde demokratiet og gi folk (aggregert sett) bedre liv.
Sunstein er ikke (veldig) dogmatisk, og bruker mye tid på å vise hvilke tilfeller som egner seg, hvilke tilfeller som ikke egner seg og hvilke problemer man møter i ulike analyse. Så mye tvil er det her at jeg sitter igjen med en del usikkerhet rundt revolusjon-påstanden i tittelen. Det er vel da også et av poengene: ikke følg magefølelsen, "uncommon sense" gir bedre resultat. Understrekinga av at det er velferdseffektene som kost-nytte-analysen må prøve å måle, og at fordelingseffekter må vurderes, er også bra.
Den er ikke spesielt underholdende å lese, men kanskje det er litt mye å ønske seg en underholdende bok om kost-nytte-analyse. Det som ikke er for mye å forvente er at en bok som i bunn og grunn forsvarer empiri foran ideologi, har så få reelle empiriske eksempler. Her er det mye skrivebordsteori og tenkte eksempler, og lite harde data.
Det er også ei bok fra en amerikansk politisk virkelighet og et system ganske annerledes fra det norske. Er det allikevel relevant? Absolutt.
Sunstein er ikke (veldig) dogmatisk, og bruker mye tid på å vise hvilke tilfeller som egner seg, hvilke tilfeller som ikke egner seg og hvilke problemer man møter i ulike analyse. Så mye tvil er det her at jeg sitter igjen med en del usikkerhet rundt revolusjon-påstanden i tittelen. Det er vel da også et av poengene: ikke følg magefølelsen, "uncommon sense" gir bedre resultat. Understrekinga av at det er velferdseffektene som kost-nytte-analysen må prøve å måle, og at fordelingseffekter må vurderes, er også bra.
Den er ikke spesielt underholdende å lese, men kanskje det er litt mye å ønske seg en underholdende bok om kost-nytte-analyse. Det som ikke er for mye å forvente er at en bok som i bunn og grunn forsvarer empiri foran ideologi, har så få reelle empiriske eksempler. Her er det mye skrivebordsteori og tenkte eksempler, og lite harde data.
Det er også ei bok fra en amerikansk politisk virkelighet og et system ganske annerledes fra det norske. Er det allikevel relevant? Absolutt.
November 26, 2018
Awesome practical overview of how cost-benefit analysis has been applied at the federal regulatory level. Definitely a must-read for anyone who is interested in seeing how governments can apply reason and science to policymaking.
June 17, 2019
¿Cuándo implementar una política que incremente impuestos para ayudar a bajar la contaminación? ¿Es posible elegir entre un ser humano o varios? ¿Cuánto vale la vida humana? Este libro le ayudará a responder, en algún sentido, estas preguntas.
January 24, 2025
Logical and intriguing look at the administrative state and how it can function better, so of course, probably out the window for at least the next four years . . .
December 17, 2020
My Recommendation: It's hard to say. If you're REALLY interested in government regulation or non-partisan ways to look at legislation/regulation then this is definitely a good book to read, but it's very dense. If you're just interested on a whim (like I was) I'd probably say pass. I actually found myself nodding off on occasion while trying to read it because many of the examples were pretty dull or minute.
My Response:What. A. Doozie. Seriously, why do I decide to read the most dense books EVER at the holidays and the beginning of the year? Really, I should've read this last year when I requested it from the publisher after seeing an advertisement for it on the train, but I kept pushing it off until now.* I requested this because having read Nudge, I assumed all his works were super approachable, but that wasn't the case for this incredibly dense book.
Honestly, this compares more to last year's kick-off read, Crashed: How a Decade of Financial Crises Changed the World. I mean just reading that title makes me exhausted again (it was 700+ very dense pages). This year's kick-off, though roughly 1/3 the size, was just as dense and basically tried to look at how to make government regulation more even and effective by removing politics and opinion and replacing it with cost-benefit analysis. It's no wonder it took me roughly three weeks to actually get through this one.
Continue reading on my book blog at geoffwhaley.com.
*I received a copy of The Cost-Benefit Revolution from the publisher in return for my honest opinion. No goods or money were exchanged.
My Response:What. A. Doozie. Seriously, why do I decide to read the most dense books EVER at the holidays and the beginning of the year? Really, I should've read this last year when I requested it from the publisher after seeing an advertisement for it on the train, but I kept pushing it off until now.* I requested this because having read Nudge, I assumed all his works were super approachable, but that wasn't the case for this incredibly dense book.
Honestly, this compares more to last year's kick-off read, Crashed: How a Decade of Financial Crises Changed the World. I mean just reading that title makes me exhausted again (it was 700+ very dense pages). This year's kick-off, though roughly 1/3 the size, was just as dense and basically tried to look at how to make government regulation more even and effective by removing politics and opinion and replacing it with cost-benefit analysis. It's no wonder it took me roughly three weeks to actually get through this one.
Continue reading on my book blog at geoffwhaley.com.
*I received a copy of The Cost-Benefit Revolution from the publisher in return for my honest opinion. No goods or money were exchanged.
July 25, 2024
decent book! i think its definitely an intrinsically more dry topic (like come on) but it offers a comprehensive history as well as some practical reflections on conducting CBAs.
Displaying 1 - 12 of 12 reviews