Ballotpedia study shows that 29 state APAs require administrative agencies to conduct a cost-benefit analysis before implementing rules

A Ballotpedia study of all 50 state constitutions and administrative procedure acts (APAs) showed that 29 state APAs require administrative agencies to conduct a cost-benefit analysis before implementing rules, as of September 2020.

Cost-benefit analysis is an aspect of agency dynamics, one of the five pillars key to understanding the main areas of debate about the nature and scope of the administrative state. Cost-benefit analysis requires administrative agencies to consider whether the potential costs of a new rule will outweigh its benefits.

Since President Ronald Reagan issued Executive Order 12291 in 1981, federal administrative agencies have conducted cost-benefit analyses for any new major rules. President Bill Clinton refined cost-benefit analysis requirements in Executive Order 12866 in 1993 and Presidents George W. Bush, Barack Obama, and Donald Trump have maintained cost-benefit analysis requirements in their own executive orders.

Ballotpedia’s study of state agency cost-benefit analysis standards concluded a variety of results.

Many states require administrative agencies to perform a cost-benefit analysis before making or changing any rules or regulations. Thus, Ballotpedia concluded that those states *require cost-benefit analysis*.

Some states require administrative agencies to perform the cost-benefit analysis only in certain circumstances. For instance, Illinois only requires such analysis if a proposed rule may have an impact on small businesses, nonprofit corporations, or small municipalities. Thus, Ballotpedia concluded that those states *conditionally require cost-benefit analysis*.

Some states require administrative agencies to perform a limited cost-benefit analysis before making rules. For instance, Alaska requires agencies to estimate annual costs for the state agency to implement the new rule. Thus, Ballotpedia concluded that those states require *limited cost-benefit analysis*.

Some states do not require administrative agencies to perform a cost-benefit analysis before making or changing any rules or regulations. Thus, Ballotpedia concluded that those states *do not require cost-benefit analysis*.

To learn more about Ballotpedia’s survey related to agency dynamics, see here:
Agency dynamics: States that require administrative agencies to conduct a cost-benefit analysis before implementing rules

Want to go further? Learn more about the five pillars of the administrative state here: Administrative state

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About the author

Jace Lington

Jace Lington is a staff writer at Ballotpedia. Contact us at editor@ballotpedia.org.

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