Barriers to the use of cost-benefit analyses
Barriers to the use of cost-benefit analyses
In the thematic network ROSEBUD, an attempt was made to describe potential barriers to the use of cost-benefit analysis of road safety measures [17]. The following list of potential barriers, arranged from the more basic to the more superficial was developed.
A Fundamental barriers (barriers of a philosophical nature)
A1 Rejecting the principles of welfare economics
A2 Rejecting efficiency as a relevant criterion of desirability
A3 Rejecting the monetary valuation of risk reductions
B Institutional barriers (barriers related to the organisation of policy making)
B1 Lack of consensus on relevant policy objectives
B2 Formulation of policy objectives inconsistent with cost-benefit analysis
B3 Priority given to policy objectives unsuitable for cost-benefit analysis
B4 Horse trading/vote trading
B5 Political opportunism
B6 Unfunded mandates and excessive delegation of authority
B7 Abundance of resources
B8 Rigidity of reallocation mechanisms
B9 Wrong timing of EAT information in decision-making process
C Technical/methodological barriers (barriers related to inherent elements of the efficiency assessment tools)
C1 Lack of knowledge of relevant impacts
C2 Inadequate monetary valuation of relevant impacts
C3 Indivisibilities
C4 Inadequate treatment of uncertainty
D Barriers related to the implementation of cost-effective policy options
D1 Social dilemmas
D2 Lack of power (related to B6 above)
D3 Vested interests in road safety measures
D4 Lack of incentives to implement cost-effective solutions
D5 Lack of marketing of efficient policies
Each of these potential barriers will not be discussed in detail. It was found that institutional barriers are often important. The framework of policy making is such that solutions to problems are not developed primarily with the aid of a technical analysis, like a cost-benefit analysis, but by means of a process of negotiations. As an example, resource allocation in the public sector in Norway is strongly influenced by game-like mechanisms that result in inefficient allocations, i.e. an abundance of resources in some areas and a shortage of resources in other areas. The result of this is that areas with abundant resources spend these resources on projects that are not cost effective, whereas areas with a shortage of resources are unable to implement all cost-effective projects.
It is, however, outside the scope of cost-benefit analysis as such to alter these resource allocation mechanisms. Considerations relevant to the implementation of policies based on cost-benefit analyses are discussed in section 9.