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Project Evaluation with Democratic Decision-making: What Does Cost-benefit Analysis Really Measure?

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  • Nyborg, Karine

    (Dept. of Economics, University of Oslo)

Abstract

It is often argued that projects involving public good changes should be chosen on the basis of monetary valuation and cost-benefit analysis (CBA). In democratic project selection processes, however,decision-makers cannot generally interpret CBA as measuring projects’ social welfare effects.The reason is partly that decision-makers’views of the good society differ –that is, they typically do not hold the same social welfare function – and partly because separating efficiency anddistribution is even less straightforward in democratic than in dictatorial decision-making processes.

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  • Nyborg, Karine, 2014. "Project Evaluation with Democratic Decision-making: What Does Cost-benefit Analysis Really Measure?," Memorandum 08/2014, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2014_008
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    More about this item

    Keywords

    Environmental cost-benefit analysis; ethics; democratic decision-making;
    All these keywords.

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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