Cost-Benefit Analysis and the Democratic Ideal
AbstractIn traditional cost-benefit analyses of public projects, every citizen’s willingness to pay for a project is given an equal weight. This is sometimes taken to imply that cost-benefit analysis is a democratic method for making public decisions, as opposed to, for example, political processes involving log-rolling and lobbying from interest groups. Politicians are frequently criticized for not putting enough emphasis on the cost-benefit analyses when making decisions. In this paper we discuss the extent to which using cost-benefit analysis to rank public projects is consistent with Dahl’s (1989) criteria for democratic decision-making. We find several fundamental conflicts, both when cost-benefit analysis is used to provide final answers about projects’ social desirability, and when used only as informational input to a political process. Our conclusions are illustrated using data from interviews with Norwegian politicians.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 205.
Date of creation: Nov 1997
Date of revision:
Democracy; cost-benefit analysis;
Other versions of this item:
- A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
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