Economic Efficiency-Based Benefit–Cost Analysis: Comments on Circular A-4

Abstract This paper is based on public comments I submitted in 2023 to the Office of Management and Budget (OMB) on the draft revisions to its Circular A-4 guidance on “Regulatory Analysis.” It includes my comments as submitted and a “prologue” and “epilogue” written after OMB published the 2023 version of Circular A-4. The major issues discussed in my and the other public comments on the 2023 revisions have been long been, and will remain, central to the practice of regulatory BCA. My public comments compare the 2023 revisions to the principles and practice of standard efficiency-based benefit–cost analysis (BCA). Standard BCA is a tool to evaluate whether regulations fix market failures and improve economic efficiency. The 2023 revisions to Circular A-4 depart from standard BCA in important ways.