Dignity as a Value in Agency Cost-Benefit Analysis

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NOTE CONTENTS  INTRODUCTION  I.   COST-BENEFIT ANALYSIS: HISTORICAL AND THEORETICAL CONTEXT      A. The Theory of CBA        1. The Traditional Understanding of CBA        2. Alternative Understandings of CBA      B. CBA in U.S. Executive Agencies II.  OPTIONS FOR INCORPORATING DIGNITY INTO CBA      A. Option 1: Qualitative Balancing      B. Option 2: Quantitative Balancing      C. Option 3: Cost Monetization      D. Option 4: Full Monetization      E. Option 5: Trans-Contextual Monetization III. THE EXISTING TERRAIN      A. Treatment of Dignity in Agency CBAs         1. Disability Rule         2. Prison Rape Rule         3. Air Toxics Rule         4. Health Privacy Rule         5. Age Discrimination Rule      B. Conclusions Regarding Agencies' Consideration of Dignity           in CBA         1. To Monetize or Not to Monetize?         2. Generality of Most Allusions to Dignity IV.  RECOMMENDATIONS FOR INCORPORATING DIGNITY INTO CBA      A. Against Monetization         1. The Complexity and Malleability of Dignity         2. Valuing Dignity in the Proper Way         3. Problems with Deriving a Trans-Contextual Monetary Measure            of Dignity      B. For Qualitative Specificity         1. Illustrating QS         2. Advantages of QS         3. Objections to QS and Replies            a. Illegitimate Increase of Agency Discretion            b. Distortion of Dignity CONCLUSION 


On January 18, 2011, President Obama issued Executive Order 13,563, titled "Improving Regulation and Regulatory Review." (1) In this Order, the President affirmed cost-benefit analysis (CBA) as the appropriate method of determining the suitability of regulation by executive agencies. At the same time, President Obama's Order indicated that agencies, in conducting CBA, "may consider (and discuss qualitatively) values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts." (2) Of these benefits, "human dignity" is the major addition to previous Executive Orders. (3)

The inclusion of human dignity among the factors that agencies are authorized to consider in CBA leads to difficult questions. CBA frequently features strenuous attempts to attach dollar values to the advantages and disadvantages of regulation. (4) Yet dignity is often viewed as a quintessential example of a value impervious to monetization. (5) How, then, could dignity possibly be incorporated into CBA?

In fact, the mention of dignity in E.O. 13,563 received a fair amount of skepticism. Some proponents of CBA criticized the addition of human dignity" to E.O. 13,563 on the basis that incorporating dignity into CBA would permit agencies to pursue costly regulations simply because they advanced the "fudge factor" of dignity. (6) The Wall Street Journal editorialized that "a rule might pass Mr. Obama's cost-benefit test if it imposes $999 billion in hard costs but supposedly results in a $1 trillion increase in human dignity whatever that means in bureaucratic practice." (7) On this view, introducing dignity into CBA weakens CBA's capacity to assess accurately the positive and negative aspects of regulation--and, in particular, to constrain government to regulate only when doing so would produce net social gain.

Individuals opposed to CBA, for their part, have long contended that CBA is doomed to failure by its inability to take proper account of dignity and other unmonetizable" values. CBA critic Frank Ackerman, for instance, writes that [c]ost-benefit analysis fails because it assigns prices to the dignity of human life and the natural world." (8) According to this perspective, CBA cannot present an accurate portrait of the advantages and disadvantages of regulation precisely because it attempts to monetize values that cannot be priced, including dignity.

Both supporters and opponents of CBA have thus expressed the view that dignity and CBA fundamentally do not mix. …