THE COST OF REGULATION

Advocates of regulatory benefit-cost analysis are right in theory, alb eit somewhat impractical. In a sense, they have put the cart before th e horse. Right now we cannot satisfactorily estimate the costs of gove rnment regulation, let alone its benefits. We must understand what dri ves cost before we can make satisfactory cost estimates. But, first of all, we need good cost measures to figure out what drives cost. We do n't now measure the costs of regulation Accurate measurement of the co st of regulation is, therefore, the first step to better regulatory pr actice. This means accounting for the regulatory burdens on firms and subordinate governments and allocating those burdens to the regulatory policies that induced them.