Regulatory Appraisal: A Neglected Opportunity for Law and Economics

Governments are increasingly using cost-benefit analysis to appraise regulatory proposals. In this paper, the author reviews recent practice in the USA and UK. Drawing particularly on examples of analysis undertaken by the British Health and Safety Executive, he argues that a technique originally adopted to assess the merits of public projects is, as yet, insufficiently sensitive to some of the problematic aspects of the interaction between legal instruments and human behaviour. These aspects are the focus of much law-and-economics analysis and the value of regulatory appraisal would be enhanced by an increased input of such analysis.