Ingles

PROYECTO PERSONAL DE INGLÉS

3º ENTREGA:
Análisis del Mensaje

Alumna: Fleitas Natalia

Profesora: Galizia María Laura

Fecha de entrega: noviembre-2012

UNIVERSIDAD NACIONAL DE QUILMES

]oumal of Economic Perspectives-Volume 1O, Number 3-Summer 1996-Pages 119-134

Economic Foundations of the Current
Regulatory Reform Efforts

W. Kip Viscusi

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raditional economicregulation focused on issues such as antitrust and setting prices for public utilities. But in the last few decades, the emerging role of environmental and risk regulation has transformed the role of reg­
ulation in the American economy. Rough estimates of the economic costs of gov­ emment regulations exceed $500 billion (Hopkins, 1992). This total can be divided up in various ways. More thanhalf the cost is attributable to papexwork require­ ments arising out of regulation, but there is also more than $200 billion in direct costs of regulation, including costs to business. More than half of this amount is due to environmental regulation, and much of the remainder is attributable to various forms ofrisk regulation. About $100 billion involves govemment transfers, such as theeffects of the mínimum wage, while the rest involves costs paid by businesses. Regulatory benefits reduce the net burden of these efforts on society, but there are no good estimates of the total of regulatory benefits.
Regulatory interventions often have a sound economic foundation. Many econ­ omists would agree that markets have a difficult time spontaneously organizing to address allforms of environmental pollution and that consumers are unable to assess the risks associated with, say, prescription drugs. However, the existence of a rationale for sorne sort of govemment intervention in no way eliminates the need for obtaining the greatest benefit to society that can be derived from these regu­ latory expenditures.
During 1995 and 1996, the 104th Congress hasconsidered a flurry of bilis intended to foster more cost-effective regulatory policies by imposing greater

• W. Kip Vzscusi isJohn Cogan,fr., Professor of Law and Economics, Harvard Law School, Camúridge, Massachusetts.

W. Kip Viscusi 120

structure on risk and environmental regulations.1 These legislative efforts were quite broad in scope; it's fair to say that theyattempted to revolutionize the criteria for approval of government regulations. For example, rather than cleaning up haz­ ardous waste sites whenever hazardous chemicals are present, irrespective of the costs involved and whether any populations are actually exposed to the risk, the new legislative proposals were intended to require the Environmental Protection Agency (EPA) to assessthe risks and to show that the social benefits ofthese actions exceeded the associated costs.
The need for economic balancing is inevitable in a world of constrained re­ sources. Suppose that we were to devote the entire U.S. gross domestic product to the prevention of fatal accidents. Even then, we would be only able to spend $55 million per fatality (Viscusi, 1992, p. 5).That expenditure would leave literally nothing for other goods, such as other risks or environmental pollution, let alone basics like food, housing and medical care. Unless mechanisms exist for placing bounds on our risk reduction efforts, we can end up pursuing policies of diminish­ ing marginal impact and diverting resources from more productive uses.
A frequent approach ofgovernment regulations is to eliminate fatality risks that are one in a million annually or greater.2 But risks of this magnitude are ubiq­ uitous. Death risks oLone in a million are incurred every time we have one chest x-ray, live two days in New York or Boston (air pollution), travellO miles by bicycle, eat 40 tablespoons of peanut butter (cancer from aflatoxin B) or drink...