While the traditional concern with agency discretion is that agency decision-making will be biased in favor of the regulated industries, agencies are also criticized for failing to investigate the impact of their policies on the regulated client and the resulting cost to consumers. This failure prevents the agency from responding adequately to the legitimate interests of either the business community or consumers. This note examines a recently developed procedure designed to improve the agency decisionmaking process by requiring economic prediction of the effect which agency activities will have prior to agency action.

In particular, this note examines three issues. Part II focuses on whether requiring a detailed economic impact statement, applicable to all state agencies, establishes an appropriate method for generating and disclosing relevant economic information to agency decision makers and the public. Part III discusses whether economic analysis provides an objective technique which can effectively limit the discretionary powers of state administrative agencies. Part IV evaluates the probable impact of this economic information upon the agency decision-making process. This note concludes that a formal, judicially reviewable procedure for predicting economic impacts is not justified given its considerable costs and its limited potential either for reducing agency discretion or for increasing agency responsiveness.