Neoclassical Economics, Institutional Theory and Democracy

Cost-benefit analysis (CBA) is a part of the neoclassical paradigm and is an example of the neoclassical ideology. But CBA is even more specific as an ideology. Proponents of the CBA approach insist that this tool can be used to evaluate alternatives in complex decision situations from the point of view of resource allocation. The CBA ideology is precise and ambitious with the promise of delivering what is best or an 'optimal' solution for society as a whole. These strong claims by advocates of CBA is at the heart of many of the disputes concerning decision-making in areas such as energy systems, dam construction and road planning. CBA exemplifies a tradition in science generally where only that which can be expressed in quantitative terms counts and where the scientist or analyst should be able to point out the 'best' alternative. Such a role for science and for the tools offered does not appear to go well with dominant ideas of democracy.