Cost-Benefit Analysis and the Democratic Ideal

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Cost-Benefit Analysis and the Democratic Ideal

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Karine Nyborg and Inger Spangen () (Statistics Norway)

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Karine Nyborg

Abstract

In 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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Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number 205.

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Date of creation: Nov 1997
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Handle: RePEc:ssb:dispap:205

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Article
- Karine Nyborg & Inger Spangen, 2000. "Cost-Benefit Analysis and the Democratic Ideal," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 26, pages 83-93. [Downloadable!]

Find related papers by JEL classification:
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

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Karine Nyborg, 1996. "The Political Man and Contingent Valuation: Motives Do Count," Discussion Papers 180, Research Department of Statistics Norway.
Kjell Brekke & Hilde Lurå & Karine Nyborg, 1996. "Allowing disagreement in evaluations of social welfare," Journal of Economics, Springer, vol. 63(3), pages 303-324, October. [Downloadable!] (restricted)
Hammond, Peter J, 1979. "Straightforward Individual Incentive Compatibility in Large Economies," Review of Economic Studies, Blackwell Publishing, vol. 46(2), pages 263-82, April. [Downloadable!] (restricted)
Brekke, Kjell Arne, 1997. "The numeraire matters in cost-benefit analysis," Journal of Public Economics, Elsevier, vol. 64(1), pages 117-123, April. [Downloadable!] (restricted)
Dreze, Jean & Stern, Nicholas, 1987. "The theory of cost-benefit analysis," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 14, pages 909-989 Elsevier. [Downloadable!] (restricted)
Karine Nyborg, 1996. "Some Norwegian Politicians' Use of Cost-Benefit Analysis," Discussion Papers 169, Research Department of Statistics Norway.
Other versions:
- Nyborg, Karine, 1998. " Some Norwegian Politicians' Use of Cost-Benefit Analysis," Public Choice, Springer, vol. 95(3-4), pages 381-401, June. [Downloadable!] (restricted)
Fridstrom, Lasse & Elvik, Rune, 1997. " The Barely Revealed Preference behind Road Investment Priorities," Public Choice, Springer, vol. 92(1-2), pages 145-68, July. [Downloadable!] (restricted)

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