Cost Benefit Analysis (CBA) are “decision tools” that are used as part of a broader political process. As such, they may be used in concert with other sources of information to guide decision making. You have read materials that support CBA or other cost techniques as decisionmaking tools as well as several critiques of CBA. Positive aspects include:
Using cost as a measure provides a basis of comparison across projects.
If CBAs are designed well, they can incorporate effects on different political actors
CBAs can provide a mechanism for weighing tradeoffs between the present and the future and for helping governments ascertain the impact of policies and programs on their budgets
Critiques of and limitations to CBA
Efficiency as the dominant value driving CBA, versus equity or procedural justice;
The difficulty and ethics in quantifying some costs and benefits;
Missing or poor data;
Political issues: CBA’s being misused, misrepresented, subject to political pressure and influence, or used to drive a particular political perspective.
Review the attachment and drawing on CBA readings including those offering a positive view of CBA and concerning critiques or limitations to CBA, write a 2 page single-spaced memo addressed to the head of an agency or organization who would be drawing on this CBA to make a policy decision to either keep or change current policy or adopt a similar policy in another state. You don’t need to consult any sources not provided or any information about the current status of these policies. Your memo will do the following:
Adopt a role that would correspond to one perspective: that is you will pretend to write on behalf of an organization of people that is affected by the policy: e.g., commuters or economic development officials in a city agency, or another party. Acknowledge your policy perspective in the memo and briefly introduce your organization in the memo so your perspective is clearly framed.
Provide a two- to three-paragraph summary of the findings (you can focus on the sections with numbers and the executive summaries). Talk about PERSPECTIVES as per our readings – which groups are affected and how; whose costs and benefits are taken into account?
Comment on the strong aspects of and limitations of the cost analysis (refer to the Vera reading on how to read a report). What costs or benefits seem appropriate or inappropriate? Why is the analysis helpful/not helpful to policymakers thinking about policy change in this jurisdiction or another one? What is missing?
Think about the politics of cost-benefit analysis (see for example the Friedman and Davis article in the NY Times on changes in EPA regulations and the comments on changes in Executive Orders in my video presentation). How do these politics relate to the report you are reading?
Consider the videos on NYC’s racial impact analysis and equitable development tool. If such an analysis were done related to the rail project, how would that seem different? Which method do you recommend as more useful for the memo reader’s decisionmaking?
Your memo format includes a heading, 1-inch margins, 12-point font, and professional and concise language. You can use footnotes to cite any additional background or evidence for your argument. There is no specific word limit but you should be writing for a busy policymaker who barely has time to read three pages; therefore, I will be looking for your ability to make a concise, logical argument.
