| The role of benefit-cost analysis (BCA) in Environmental Protection Agency (EPA) rulemaking is examined from a New Institutional Economic perspective. First, BCA is shown to be one in a string of rationalizing policy tools based on the logic of microeconomics. BCA came to play a role in EPA decision making because of historical precedent and theoretical adaptations of the technique. Next, EPA decision making is shown to be an institutional response that reconciles the diverse presidential, Congressional, and judicial constraints on the administration of environmental policy. Based on a sample of EPA regulations, improving the theoretical sophistication or comprehensiveness of BCA will not likely lead to issue more efficient regulations. Rather, institutional change offers the most likely, but politically costly, means of increasing the economic rationality of EPA regulations. |
