Using Environmental Benefit-Cost Analysis to Improve Government Performance
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Type of Work19 pages
Citation of Original PublicationFarrow, Scott; Toman, Michael; Using Environmental Benefit-Cost Analysis to Improve Government Performance; Resources for the Future, December 1998; https://media.rff.org/archive/files/sharepoint/WorkImages/Download/RFF-DP-99-11.pdf
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In this paper we first describe the legal and administrative basis of mandates that variously require and eschew economic measures for environmental management. We then summarize the steps involved in benefit-cost analysis and what can and cannot be accomplished with such information. Our basic conclusion is that while the approach is not perfect, benefit-cost analysis has a solid methodological footing and provides a valuable performance measure for an important governmental function, improving the well-being of society. However, benefit-cost analysis requires analytical judgements which, if done poorly, can obfuscate an issue or worse, provide a refuge for scoundrels in the policy debate. We conclude the article with specific suggestions for both the everyday performance of benefit-cost analysis and its use in policy decision-making.