The Political Economy of Efficiency: Cost-Benefit Analysis, Systems Analysis, And Program Budgeting

Abstract

As the profession has been increasingly concerned with the processes through which policy is made, various political scientists have become worried about the apparent neglect of the substance of the major policy choices made by governments. The apparent success of cost-benefit analysis, systems analysis, and program budgeting in facilitating rational choice has led some high government officials and political scientists to champion their widespread adoption. Efficiency consisted in meeting the objective at the lowest cost or in obtaining the maximum amount of the objective for a specified amount of resources. The purpose of cost-benefit analysis is to secure an efficient allocation of resources produced by the governmental system in its interaction with the private economy. The economic model on which cost-benefit analysis depends for its validity is based on a political theory. The chapter analyzes the strengths and weaknesses of each method for particular purposes, and estimates the utility of each approach for governmental officials and political scientists.