Hostname: page-component-cd9895bd7-q99xh Total loading time: 0 Render date: 2024-12-31T22:42:12.308Z Has data issue: false hasContentIssue false
  • English
  • Français

The Influence of Individual Characteristics and Institutional Norms on Bureaucrats’ Use of Cost–Benefit Analysis: A Choice Experiment

Published online by Cambridge University Press:  14 December 2020

Johanna J. Hammes Open the ORCID record for Johanna J. Hammes [Opens in a new window] ,
Lena Nerhagen  and
Heather C. Fors
Johanna J. Hammes*
Affiliation:
Swedish National Road and Transport Research Institute, VTI, Box 55685, Stockholm102 15, Sweden
Lena Nerhagen
Affiliation:
Dalarna University, Borlänge, Sweden
Heather C. Fors
Affiliation:
Department of Economics, University of Gothenburg, Gothenburg, Sweden
*
*e-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

A commonly assumed reason for the delegation of authority from a legislature (politicians) to bureaucracies is that the bureaucrats have an information advantage over the politicians, including knowledge of cost–benefit analysis (CBA). But it is reasonable to assume that the bureaucrats use their information advantage by taking all relevant aspects of policy into account? We model the use of CBA using a delegation model and then test the theoretical predictions with empirical data collected from five Swedish government agencies. The empirical results lend support both for the hypothesis that risk aversion concerning the environmental outcome, the bureaucrats’ environmental attitudes, and the cost of taking CBA information into account have a considerable impact on the probability of using information from a CBA. Hence risk averse and bureaucrats with strong environmental preferences are less likely and bureaucrats with low cost of doing a CBA more likely than other bureaucrats to use CBA information. Finally, a binding governmental budget constraint may positively influence a bureaucrat’s choice of using CBA information. A tentative conclusion is therefore that it may be possible to increase the use of CBA by making the budgetary consequences of policies much clearer and demanding due consideration of costs.

Keywords

bureaucratscost–benefit analysisdelegationenvironmental policyenvironmental preferencesrisk aversion/neutral/lovingD61D73H41
Type
Article
Information
Journal of Benefit-Cost Analysis , Volume 12 , Issue 2 , Summer 2021 , pp. 258 - 286
Copyright
© The Author(s), 2020. Published by Cambridge University Press on behalf of the Society for Benefit-Cost Analysis

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Alesina, Alberto, and Tabellini, Guido. 2008. “Bureaucrats or Politicians? Part II: Multiple Policy Tasks.” Journal of Public Economics, 92: 426–447.CrossRefGoogle Scholar
Alesina, Alberto, and Tabellini, Guido. 2007. “Bureaucrats or Politicians? Part I: A Single Policy Task.” The American Economic Review, 97 (1): 169–179.CrossRefGoogle Scholar
Andersson, Henrik. 2018. “Application of BCA in Europe – Experiences and Challenges.” Journal of Benefit-Cost Analysis, 9 (1): 84–96.CrossRefGoogle Scholar
Andersson, Henrik, Hultkrantz, Lars, Nilsson, Jan-Eric, and Lindberg, Gunnar. 2018. “Economic Analysis of Investment Priorities in Sweden’s Transport Sector.” Journal of Benefit-Cost Analysis, 9 (1): 120–146.CrossRefGoogle Scholar
Apaydin, Müge. 2016. Lägesbeskrivning av arbetet med Klimatklivet. Ärendenr: NV-04712-16. Naturvårdsverket skrivelse: Stockholm.Google Scholar
Arrow, Kenneth J, Cropper, Maureen L., Eads, George C.. Hahn, Robert W., Lave, Lester B., Noll, Roger G., Portney, Paul R., Russell, Milton, Schmalensee, Richard, Smith, V Kerry., Stavins, Robert N.. 1996. “Is There a Role for Benefit-Cost Analysis in Environmental, Health, and Safety Regulation?” Science, 272: 221–222.CrossRefGoogle Scholar
Batteux, Eleonore, Ferguson, Eamonn, and Tunney, Richard J. 2019. “Do Our Risk Preferences Change When We Make Decisions for Others? A Meta-analysis of Self-other Differences in Decisions Involving Risk.” PLoS ONE, 14 (5). https://doi.org/10.1371/journal.pone.0216566.CrossRefGoogle ScholarPubMed
Bendor, Jonathan, Glazer, Amihai, and Hammond, Thomas H. 2001. “Theories of Delegation in Political Science.” Annual Review of Political Science, 4: 235–269.CrossRefGoogle Scholar
Bendor, Jonathan, and Meirowitz, Adam. 2004. “Spatial Models of Delegation.” American Political Science Review, 98 (2): 293–310.CrossRefGoogle Scholar
Boardman, Anthony E, Greenberg, David H., Vining, Aidan R., and Weimer, David L.. 2018. Cost-Benefit Analysis: Concepts and Practice. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Börjesson, Maria, Eliasson, Jonas, and Lundberg, Mattias. 2014. “Is CBA Ranking of Transport Investments Robust?” Journal of Transport Economics and Policy, 48 (2): 189–204.Google Scholar
Bosted, Göran, Mustonen, Mika, and Gong, Peichen. 2015. Increasing Forest Biomass Supply in Northern Europe – Countrywide Estimates and Economic Perspectives . CERE Working Paper 2015:5, Umeå: Centre for Environmental and Resource Economics (CERE).CrossRefGoogle Scholar
Carlsson, Fredrik, Kataria, Mitesh, and Lampi, Elina. 2011. “Do EPA Administrators Recommend Environmental Policies that Citizens Want?” Land Economics, 87: 60–74.CrossRefGoogle Scholar
Carrigan, Christopher, and Shapiro, Stuart. 2016. “What’s Wrong with the Back of the Envelope? A Call for Simple (and Timely) Benefit-Cost Analysis.” Regulation & Governance, 11: 203–212.CrossRefGoogle Scholar
Casullo, Lorenzo, and Zhivov, Nathan. (2017) Assessing Regulatory Changes in the Transport Sector. An Introduction. Paris: International Transport Forum Discussion Paper 2017–05.Google Scholar
De Francesco, Fabrizio, Radaelli, Claudio M., and Troeger, Vera E.. 2011. “Implementing Regulatory Innovations in Europe: The Case of Impact Assessment.” Journal of European Public Policy, 19(4): 491–511.CrossRefGoogle Scholar
Delbeke, J, Klaassen, G, van Ierland, T, and Zapfel, P. 2010. “The Role of Environmental Economics in Recent Policy Making at the European Commission.” Review of Environmental Economics and Policy, 4 (1): 24–43.CrossRefGoogle Scholar
Donkers, Bas, Melenberg, Bertrand, and Van Soest, Arthur. 2001. “Estimating Risk Attitudes Using Lotteries: A Large Sample Approach.” Journal of Risk and Uncertainty, 22 (2): 165–195.CrossRefGoogle Scholar
Eggert, Håkan, Kataria, Mitesh, and Lampi, Elina. 2016. “Difference in Preferences or in Preference Orderings? Comparing Choices of Environmental Bureaucrats, Recreational Anglers, and the Public .” Working Papers in Economics No 669. Gothenburg, Sweden: University of Gothenburg.Google Scholar
Eliasson, Jonas, Börjesson, Maria, Odeck, James, and Welde, Morten. 2015. “Does Benefit-Cost Efficiency Influence Transport Investment Decisions?” Journal of Transport Economics and Policy, 49 (3): 377–396.Google Scholar
Eliasson, Jonas, and Lundberg, Mattias. 2012. “Do Cost-Benefit Analyses Influence Transport Investment Decisions?” Transport Reviews, 32 (1): 29–48.CrossRefGoogle Scholar
European Commission. 2015. Communication From the Commmission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Better Regulation for Better Results – and EU Agenda COM/2015/0215_final.Google Scholar
Farrow, Scott, and Hayakawa, Hiroshi. 2002. “Investing in Safety. An Analytical Precautionary Principle.” Journal of Safety Research, 33: 165–174.CrossRefGoogle ScholarPubMed
Forsstedt, Sara. (2018) Tänk efter före! En ESO-rapport om samhällsekonomiska konsekvensanalyser. Stockholm: Expertgruppen för Studier i Offentlig ekonomi 2018, p. 5.Google Scholar
Frykblom, Peter. 1997. “Hypothetical Question Models and Real Willingness to Pay.” Journal of Environmental Economics and Management, 34: 275–287.CrossRefGoogle Scholar
Hammes, Johanna Jussila. (2017) The Impact of Career Concerns and Cognitive Dissonance on Bureaucrats’ Use of Cost-Benefit Analysis. Stockholm: S-WoPEc 2017, p. 5.Google Scholar
Hammes, Johanna Jussila, and Nilsson, Jan-Eric. 2016. “The Allocation of Transport Infrastructure in Swedish Municipalities: Welfare Maximization, Political Economy or Both?” Economics of Transportation, 7–8: 53–64.CrossRefGoogle Scholar
Hansson, Lisa. 2019. “Public Administrators’ Roles in the Policy Adaptation of Transport Directives: How Knowledge Is Created and Reproduced.” Transport Policy.Google Scholar
Hansson, Lisa, and Nerhagen, Lena. 2019. “Regulatory Measurements in I Policy Coordinated Practices: The Case of Promoting Renewable Energy and Cleaner Transport in Sweden.” Sustainability, 11 (6): 1–18.CrossRefGoogle Scholar
Henning, D. 2015. Beskrivning av beräkningar av minskade växthusgasutsläpp för ansökningar i Klimatklivet. Ärendenr: NV-06064-15, Stockholm: Naturvårdsverket skrivelse.Google Scholar
Hiriart, Yolande, and Martimort, David. 2012. “How Much Discretion for Risk Regulators?” RAND Journal of Economics, 43 (2): 283–314.CrossRefGoogle Scholar
Hultkrantz, Lars. 2009. “Ett styvbarn.” Ekonomisk debatt, 37 (7): 3–5.Google Scholar
Hultkrantz, Lars, and Svensson, Mikael. 2017. “A Comparison of Cost-Benefit and Cost-Effectiveness Analysis in Practice: Divergent Policy Practices in Sweden.” Nordic Journal of Health Economics, 5: 41–53.Google Scholar
Iaryczower, Matias, Lewis, Garrett, and Shum, Matthew. 2013. “To Elect or to Appoint? Bias, Information, and Responsiveness of Bureaucrats and Politicians.” Journal of Public Economics, 97: 230–244.CrossRefGoogle Scholar
Jehle, Geoffrey A., and Reny, Philip J.. 1998. Advanced Microeconomic Theory. Reading, MA: Addison-Wesley.Google Scholar
Khalil, Fahad, Kim, Doyoung, and Lawarrée, Jacques. 2013. “Contracts Offered by Bureaucrats.” RAND Journal of Economics, 44 (4): 686–711.CrossRefGoogle Scholar
Konjunkturinstitutet. 2016. Kostnadseffektiv styrning mot mål om förnybar energi . Specialstudie Nr 51, Stockholm: Konjunkturinstitutet.Google Scholar
Kriström, Bengt. 1990. “A Non-parametric Approach to the Estimation of Welfare Measures in Discrete Response Valuation Studies.” Land Economics, 66 (2): 135–139.CrossRefGoogle Scholar
Kungliga ingenjörsveternskapsakademien (IVA). 2016. Fem vägval för Sverige. Syntesrapport . Stockholm: IVA-projekt Vägval el. IVA-M 471.Google Scholar
Lindvall, Johannes, and Rothstein, Bo. 2006. “Sweden: The Fall of the Strong State.” Scandinavian Political Studies, 29 (1): 47–63.CrossRefGoogle Scholar
Löfstedt, Ragnar E. 2004. “The Swing of the Regulatory Pendulum in Europe: From Precautionary Principle to (Regulatory) Impact Analysis.” The Journal of Risk and Uncertainty, 28 (3): 237–260.CrossRefGoogle Scholar
Miljömålsberedningen. 2016a. En klimat- och luftvårdsstrategi för Sverige. Stockholm: Wolter Kluwer Sverige AB.Google Scholar
Miljömålsberedningen. 2016b. Ett klimatpolitiskt ramverk för Sverige. Stockholm: Wolters Kluwer Sverige AB.Google Scholar
Ministry of Enterprise and Innovation 2016. Sveriges handlingsprogram för infrastrukturen för alternativa drivmedel i enlighet med direktiv 2014/94/EU . N2016/07176/MRT, Stockholm: Regeringskansliet.Google Scholar
Mouter, Niek. 2016. Dutch Politicians’ Use of Cost-Benefit Analysis. Washington: Meeting of the Transportation Research Board.Google Scholar
Mouter, Niek. 2017. “Dutch Politicians’ Attitudes Towards Cost-Benefit Analysis.” Transport Policy, 54: 1–10.CrossRefGoogle Scholar
Mouter, Niek, Annema, Jan Anne, and van Wee, Bert. 2013. “Attitudes Towards the Role of Cost-Benefit Analysis in the Decision-Making Process for Spatial-Infrastructure Projects: A Dutch Case Study.” Transportation Research Part A, 58: 1–14.Google Scholar
Mouter, Niek, Annema, Jan Anne, and van Wee, Bert. 2015. “Managing the Insovable Limitations of Cost-Benefit Analysis: Results of an Interview Based Study.” Transportation, 42: 277–302.CrossRefGoogle Scholar
Nationellt skogsprogram. (2016) Främjande av biobaserade produkter och energi, smarta transporter, en skogsindustri i världsklass och ökad epoert. Underlagsrapport från arbetsgrupp 3 inom nationellt skogsprogram. Stockholm: Nationellt skogsprogram. http://www.regeringen.se/rapporter/2016/09/underlagsrapporter-till-arbetet-med-det-nationella-skogsprogrammet/.Google Scholar
Nerhagen, Lena, and Forsstedt, Sara 2019. Should Regulatory Impact Assessment Have a Role in Sweden’s Transport Planning? International Transport Forum Discussion Papers No 2019/09. Paris: OECD Publishing.Google Scholar
Nerhagen, Lena, Forsstedt, Sara, and Edvardsson, Karin 2018. The Precautionary Principle and Regulatory Impact Assessment: On the Need for Initial Screening of Hazards in Regulatory Work with Examples from Transport. CTS Working Paper 2018, Stockholm, p. 14.Google Scholar
Nerhagen, Lena, Forsstedt, Sara, and Hultkrantz, Lars. 2017. “Analyser av politikens samhällskonsekvensr är otillräckliga i Sverige.” Ekonomisk Debatt, 34 (3): 30–40.Google Scholar
Nilsson, Jan-Eric. 1991. “Investment Decisions in a Public Bureaucracy. A Case Study of Swedish Road Planning Practices.” Journal of Transport Economics and Policy, 10: 163–175.Google Scholar
Nyborg, Karine. 1998. “Some Norwegian Politicians’ Use of Cost-Benefit Analysis.” Public Choice, 95 (3–4): 381–401.CrossRefGoogle Scholar
Radaelli, Claudio M. 2009. “Measuring Policy Learning: Regulatory Impact Assessment in Europe.” Journal of European Public Policy, 16 (8): 1145–1164.CrossRefGoogle Scholar
Radaelli, Claudio M. 2010. “Rationality, Power, Management and Symbols: Four Images of Regulatory Impact Assessment.” Scandinavian Political Studies, 33 (2): 164–188.CrossRefGoogle Scholar
Rose-Ackerman, Susan. (2007) Public Choice, Public Law and Public Policy. Amsterdam: Keynote Address, First World Meeting of the Public Choice Society.Google Scholar
Sager, Tore Øivin, and Ravlum, Inger-Anne. 2005. “The Political Relevance of Planners’ Analysis: The Case of a Parliamentary Standing Committee.” Planning Theory, 4 (1): 33–65.CrossRefGoogle Scholar
Sunstein, Cass R. 2017. “Is Cost-Benefit Analysis a Foreign Language?” Quarterly Journal of Experimental Psychology, 72(1): 3–7.CrossRefGoogle Scholar
Sunstein, Cass R, and Pildes, Richard H. 1995. “Reinventing the Regulatory State.” The University of Chicago Law Review, 62 (1): 1–129.Google Scholar
Swedish Energy Agency 2015. Laddinfrastruktur inom Klimatklivet. Redovisnings – och utvärderingsrapport . Eskilstuna: Energimyndigheten. diarienummer 2015–5982.Google Scholar
Swedish Energy Agency. (2016) Drivmedel och biobränslen 2015. Mängder, komponenter och ursprung rapporterade i enlighet med drivmedelslagen och hållbarhetslagen. ER 2016:12. Eskilstuna: Statens Energimyndighet.Google Scholar
Swedish Transport Administration. (2016) Åtgärder för at tminska transportsektorns utsläpp av växthusgaser – ett regeringsuppdrag. Trafikverket: Borlänge, p. 111.Google Scholar
Uba, Katrin. 2010. “Who Formulates Renewable-Energy Policy?” Energy Policy 38 (11): 6674–6683.CrossRefGoogle Scholar
Wegrich, Kai. 2011. “Regulatory Impact Assessment: Ambition, Desigh and Politics.” In Handbook on the Politics of Regulation, edited by Levi-Faur, David. Edward Elgar, Cheltenham, UK, 397–410.Google Scholar
Supplementary material: File

Hammes et al. supplementary material

Appendix

Download Hammes et al. supplementary material(File)
File 21.5 KB