An Analysis of the Government’s Proposed Risk Assessment Guidelines

Robert Hahn and
Robert Hahn
Robert Hahn Director of Economics - Smith School of Enterprise and the Environment at the University of Oxford, Former Brookings Expert
Robert E. Litan

June 15, 2006

Executive Summary

This paper critically reviews the government’s proposed risk assessment guidelines. While we believe that such guidelines may be helpful, we make two recommendations that could improve their effectiveness: first, that agencies prepare a Risk Assessment Summary and that OMB summarize the degree of compliance with its risk assessment guidelines; second, that OMB consider adding a credible enforcement mechanism to the proposed guidelines. We also suggest that Congress may want to consider endorsing the use of risk assessment guidelines.

Establishing guidelines to help ensure the quality of risk assessments is potentially a useful exercise. The Office of Management and Budget deserves to be commended for its efforts to establish such guidelines. At the same time, scholars should take seriously the OMB’s invitation to provide feedback on how such guidelines could be improved.

1. Introduction

The Office of Management and Budget (OMB), in consultation with the White House Office of Science and Technology Policy, has recently released a Proposed Risk Assessment Bulletin. This bulletin provides technical guidelines for risk assessments that are done by the federal government.

Risk assessments are an important tool for ranking the risks of different kinds of activities and helping to set priorities. These assessments can also serve as a basis for informing the public about the likely magnitude of different kinds of risks, such as being struck by lightning or getting hit by a car when crossing the street.

Risk assessments are sometimes used to help determine whether a particular risk should be reduced and, if so, to determine an appropriate standard. They can also be used as a part of cost-benefit analysis, which then is often used to determine an appropriate standard or approach for regulating.