Multi-Criteria Analysis: A Critique From An Economist’S Perspective

Multi Criteria Analysis (MCA) is a decision support technique that is increasingly being used to evaluate alternative resource use and policy options, often as an alternative to benefit cost analysis. However, MCA has a number of quite serious potential flaws that are examined here with reference to a MCA of future urban growth options for the Hastings Local Government Area. These flaws arise because MCA has no established theoretical framework or uniform set of principles. Consequently, different analysts can apply different criteria and different methods of ranking options against the criteria and get entirely different results. The method is therefore prone to the arbitrary and subjective judgments of the analyst. It is concluded that if decision makers are genuinely interested in how alternative resource allocation options compare against economic, financial, environmental and social criteria, then there is no substitute for undertaking separate specific detailed evaluations such as benefic cost analysis, financial analysis, environmental impact assessment and social impact assessment. Attempts to integrate the results of these assessments using the subjective and arbitrary procedures of MCA only serve to obscure the results of individual analyses and the tradeoffs involved between objectives.