Discussion Paper

Economic Analysis at the Federal Communications Commission: A Simple Proposal to Atone for Past Sins

May 31, 2011 | Thomas W. Hazlett


Economic analysis to aid in the implementation of public policy made major strides in the 1960s when organizations such as the Rand Corporation and Resources for the Future began systematically applying benefit–cost analysis (BCA) to regulatory choices. A further burst of enthusiasm for economic analysis swept the policy world in the 1970s and 1980s. This surge gained momentum from the nearly revolutionary impact of economist Alfred Kahn and his merry band of academic warriors who disrupted long-standing political equilibria, brandishing economic analysis as their primary offensive weapon. The movement garnered support from the White House in both the Carter and Reagan administrations. During the latter an Executive Order issued in 1981 mandated that executive branch regulatory agencies formally include benefit–cost analysis in their evaluation of rules. The BCA approach was likewise endorsed by the George H.W. Bush, Clinton, George W. Bush, and Obama administrations to follow.