Cost-benefit analysis is promoted as a method for making social policy decisions more rational. A review of its goals, procedures, assumptions, and recent applications exposes technological shortcomings and implicit value preferences. If the method is to be useful, it must be balanced by the judgment of decision makers. Consequently, the power of cost-benefit analysis to improve policy decisions depends on the political context. In a conservative environment this analysis provides a rationalization for disinvesting in social welfare. At such times social reformers would be wise to engage in political action and to challenge cost-benefit analysis.
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