Study reveals cost-benefit analysis approach not being embraced by decision makers
The use of a cost-benefit analysis (CBA) to make policy decisions is not being widely implemented, with many decision-makers believing that CBA can lead to a loss of control and influence over policy-making, a study involving those responsible for water policy management in Germany has revealed. The majority of those interviewed for the study perceived CBA to weaken their ability to make decisions based on their own expertise.
CBA is used to determine the cost of projects, policies or actions in terms of the environment and human welfare. It places a monetary value on aspects such as "ecosystem services", enabling such a value to be included in the decision making process. However, CBA has had only a limited impact on decision-making to date, as many refuse to implement it. Study interviewees felt that the values in CBA calculations were too black and white, whereas human analysis can be more nuanced.
Established, traditional, procedures were seen by the majority as sufficient for decision making. The author of the study argues that to change the mindset towards CBA, a discussion should take place on how economic information should be integrated into the decision-making process, one that involves cooperation between those in academia who designed the approach, and the authorities implementing it.
For more information, visit ec.europa.eu [pdf].