Cost-benefit analysis [CBA] techniques currently have a central place in policy evaluation in the UK. CBA assesses projects and policies by assigning monetary values to the costs and benefits expected from them. These values are then summed, allowing policy makers to make judgements about whether those initiatives with higher net benefits should be prioritised over those with lower net benefits.

Reducing assessment to a financial equation is appealing on two grounds. First, by reducing an array of complex variables to a single measure it may make it possible to make fairer comparisons between alternatives. Second, CBA acts as a decision-making shortcut.

Academics have been warning for years that the merits of including environmental and social considerations in a cost-based assessment mechanism may not be all that high, particularly as, when there is no market for a particular benefit, economists will – as Frank Ackerman puts it – ‘often resort to implausible, circuitous methods of inferring and inventing the missing prices….’

While CBA does at least mean social and environmental issues can actually be accounted for, the value placed on their less easily quantifiable attributes depends to a large degree on the choice and measurement of ‘benefits’ by the valuer. This in turn means that a process which interprets intangibles as concrete financial values is inherently subjective, with the relative weights attached to social wins and losses determined by those tasked with evaluation.

Attaching financial values to the social and environmental impacts of a given policy or project is often seen as a necessary if imperfect way of ensuring they are taken into account. However, the entire approach is based on the continuing assumption that economic gains are the best yardstick of social benefit and social progress – despite an ever growing body of evidence to the contrary. It would be interesting to see what would happen if the financial benefits of a policy or project were instead put onto a social scale. Would they always measure up?