Bureaucratic Benefit-Cost Analysis and Policy Controversy

Abstract

Critiques of benefit-cost analysis (BCA) are usually made on theoretical or methodological grounds; however, understanding how BCA is actually used in decision-making processes is critical if BCA is to inform policy-making. Our paper examines how the implementation of BCA within policy decision-making processes can serve to increase, rather than alleviate, controversy. This runs contrary to the standard assumption that BCA improves decision-making by providing objective data that serves as a basis for policy consensus. To frame this issue, we engage the literature on the role of science in policy decisions and the role of bureaucrats in understanding and implementing policy research. We introduce the concept of “Bureaucratic BCA” as a framework for the practical application of BCA; Bureaucratic BCA does not refer to BCA specifically conducted by bureaucrats or a lesser, technically inferior version of BCA, but rather acknowledges that BCA plays an interactive role within bureaucratic decision-making processes rather than simply serving as a sterilized information input. We show how the dynamics of BCA within the policy process can make BCA a source of controversy and waste rather than an aid to policy efficiency. In light of the Bureaucratic BCA framework, we provide recommendations as to how BCA can be implemented more productively.