Decision-makers’ attitudes towards economic valuation – a case study of German water management authorities

Abstract

The EC Water Framework Directive and more explicitly the EC Marine Strategy Framework Directive has brought new requirements of integrating economic approaches into policy-making. The primary aim of the study is to gain a greater insight into the factors that might influence the use and acceptance of cost–benefit analysis (CBA) and economic valuation in water policy-making. In this context, particularly, attitudes towards economic valuation have been established as an explanatory factor. The paper presents results of an empirical survey among decision-makers in German water authorities. The study confirms that water-related decisions in Germany are still based primarily on budget costs, but also indicates a rather positive attitude towards economic valuation. The results suggest that conceptual issues are considered as most important, whereas resource constraints are not predominantly regarded as important obstacles for the application of CBA in the administrative context. Furthermore, an exploratory factor analysis derived three ‘latent’ variables that are related to (i) the usefulness of CBA as a decision-support tool, (ii) the administrative feasibility, and (iii) the policy-makers’ goals and interest potentially affected by the use of CBA. The results of an OLS regression model suggest that particularly the institutional affiliation has a significant influence on the attitudes.