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Designing a national benefit–cost analysis system

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  • Dale Whittington

Abstract

A government can establish a ‘national benefit–cost analysis (BCA) system’ by (1) mandating through either executive or legislative action that BCA be conducted for some designated set of public investments and regulations and (2) creating an institutional structure to support this legal or administrative requirement for the regular, ongoing evaluation of the benefits and costs of new proposed investments and regulations. This paper describes 12 issues that should be considered in the design and establishment of a national BCA analysis system and 4 approaches for combining these 12 design decisions to craft a strategy for establishing a national BCA system. The literature suggests that the results of ‘standalone’ BCAs are not highly valued or used by decision‐makers. This is in part because the quality of BCAs is often poor due to a lack of qualified analysts to conduct BCAs, analysts’ overly optimistic estimates of benefits and underestimates of costs, and analysts’ strategic misrepresentation of results. This paper suggests that a well‐designed national BCA system—assisted by generative AI—may be able to overcome some of the problems associated with ‘standalone’ BCAs.

Suggested Citation

  • Dale Whittington, 2026. "Designing a national benefit–cost analysis system," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 97(1), pages 43-76, March.
    • Handle: RePEc:bla:annpce:v:97:y:2026:i:1:p:43-76
    DOI: 10.1111/apce.70031
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    References listed on IDEAS

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