Law and Economics Commons^™

Cost-Benefit Default Principles, Cass R. Sunstein

Michigan Law Review

Courts should be reluctant to apply the literal terms of a statute to mandate pointless expenditures of effort. . .. Unless Congress has been extraordinarily rigid, there is likely a basis for an implication of de minimis authority to provide exemption when the burdens of regulation yield a gain of trivial or no value. It seems bizarre that a statute intended to improve human health would .. . lock the agency into looking at only one half of a substance's health effects in determining the maximum level for that substance. [I]t is only where there is "clear congressional intent to …

Insurer Moral Hazard In The Workers' Compensation Crisis: Reforming Cost Inflation, Not Rate Suppression, Martha T. Mccluskey

Journal Articles

This article challenges the standard story of the insurance crisis that led to the near-collapse and major reform of a number of states’ workers’ compensation programs in the 1980s and 1990s.

In the prevailing account, insurance costs rose due to expanding costs of benefits for injured workers’, much of which was blamed on wasteful or abusive "moral hazard" by workers and their lawyers and doctors. Because state regulators had substantial power to control insurance rates, this account claims governments tried to suppress prices in the face of rising benefit costs in a misguided attempt to avoid political trade-offs between labor …