Cost-Benefit Analysis and the Democratic Ideal,
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Nyborg, Karine and Inger Spangen
Discussion paper no 205, Statistics Norway
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.
A13, D61, D70, H43
Democracy, cost-benefit analysis