Cost-Benefit Analysis and the Democratic Ideal
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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- Karine Nyborg, 1996.
"Some Norwegian Politicians' Use of Cost-Benefit Analysis,"
169, Research Department of Statistics Norway.
- Nyborg, Karine, 1998. " Some Norwegian Politicians' Use of Cost-Benefit Analysis," Public Choice, Springer, vol. 95(3-4), pages 381-401, June.
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- Karine Nyborg, 1996. "The Political Man and Contingent Valuation: Motives Do Count," Discussion Papers 180, Research Department of Statistics Norway.
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- 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.
- Hammond, Peter J, 1979. "Straightforward Individual Incentive Compatibility in Large Economies," Review of Economic Studies, Wiley Blackwell, vol. 46(2), pages 263-82, April.
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