Lisa Baudot is an Associate Professor of Accounting and Management Control at HEC Paris, and Dana Wallace is an Associate Professor of Accounting at University of Central Florida Kenneth G. Dixon School of Accounting. This post is based on their article forthcoming in the Journal of Accounting and Public Policy.
Evidence-based policymaking suggests an objective and systematic form of governing that upholds the authority of evidence in legitimizing regulatory decisions. Financial regulators confront contemporary trends and pressures to justify regulatory decisions in an evidence-based manner using cost-benefit analysis (CBA). However, as a mechanism for justifying financial regulation, CBA elicits polarized views. On the one hand, CBA is a quantified, scientific, and objective endeavor that reduces opportunities for regulatory capture and acts in a disciplinary capacity over regulators. However, in projecting the impacts of any given rule, it is difficult to achieve a fully quantified analysis of the benefits and costs of regulation, a problem that may be compounded when the impacts are social as well as economic. In considering that social benefits and costs may not lend well to quantification, we focus a new paper on understanding the discursive and justificatory aspects of CBA in relation to contemporary regulations purported to have important social implications.
