Economic Appraisal of Law‐Making and Changing Forms of Governance
| DOI | http://doi.org/10.1111/1468-2230.00265 |
| Published date | 01 March 2000 |
| Date | 01 March 2000 |
| Author | Bettina Lange |
Economic Appraisal of Law-Making and Changing
Forms of Governance
Bettina Lange*
Julie Froud, Rebecca Boden, Anthony Ogus and Peter Stubbs,Controlling the
Regulators, Basingstoke: Macmillan, 1998, xiii + 216pp, hb £45.00.
Froud et al’s monograph examines the operation of a range of economic appraisal
techniques in the law-making process in the UK, the US and the European Union.
The book reports the findings from an interdisciplinary study which brought
together researchers from accounting, economics and law. The monograph consists
of 12 chapters which are not attributed to specific authors. The book’s main focus
are five case studies. Four of these deal with compliance cost assessments in the
UK (chs 6, 7, 8 and 9) and one of them (ch 5) discusses the application of the
economic appraisal technique of the EU Commission, the fiche d’impact, to the
negotiation of an EC Directive.
Compliance cost assessment (CCA) was introduced in the UK in 1985 through
an administrative direction by the then Conservative government.1It required all
government departments to produce systematic assessments of the predicted costs
to business of new regulatory proposals enshrined in statutory instruments. From
1992 onwards CCA was obligatory also for parliamentary Bills and EC Draft
Directives.2In 1996, CCA was reformed to take into account costs incurred by the
administration. Also the benefits from a measure were to be considered (albeit,
separately from its costs) and the technique was renamed regulatory appraisal
(RA). The empirical part of Froud et al’s research project does not examine the
development of RA. Furthermore, the project was finished before the election of
the Labour Government in May 1997 which reformed economic appraisal and
renamed it Regulatory Impact Asssessment (RIA). RIA provides for a cost-benefit
analysis of any new EC, primary, secondary legislation, consultation papers and
informal proposals for regulation.3Despite these changes, Froud et al’s findings on
CCA are still important, as will be shown in this article, and the chapters on
economic appraisal in the EU (ch 4), regulatory impact analysis in the US (ch 11)
and cost-benefit analysis in the UK (ch 10) remain largely unaffected.
This review article will critically examine Froud et al’s research by offering
some criticisms of the book and by questioning the terms of their analysis. The
authors locate economic appraisal in the context of deregulation, which is usually
perceived as facilitating a shift towards more market-based forms of governance.
ßThe Modern Law Review Limited 2000 (MLR 63:2, March). Published by Blackwell Publishers,
108 Cowley Road, Oxford OX4 1JF and 350 Main Street, Malden, MA 02148, USA.
294
* Dept. of Law, University of Wales, Aberystwyth.
I would like to thank the anonymous reviewer for the MLR, John Linarelli and Anne Barlow for comments
on a previous draft of this review article.
1 J. Froud, R. Boden, A. Ogus and P. Stubbs, Controlling the Regulators (London: Macmillan Press,
1998), x.
2ibid 12.
3The Better Regulation Guide, Section 1: An Introduction to Regulatory Impact Assessment, para. 1.2.,
at .
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