Journal article

Cost-benefit analysis as operationalized neoclassical economics: from evidence to folklore

Economics Banks and banking Financial services industry Fiscal policy

Neoclassical economics is an imposing theoretical edifice. But at another level it provides detailed operational guidance for public policy. At this operational level it is a technocratic tool that gives the appearance of scientific precision and evidence-based policy to underpin the day-to-day work that public servants do. This ‘deep embeddedness’ within the routine operation of government makes it difficult to dislodge the influence of neoclassical economics, even when it has been subjected to sustained theoretical critique, and even when there is a generalized sense that its impact on policy has been harmful. By providing tools that public officials use to resolve the workaday choices they confront, it becomes part of ‘business as usual’; a set of ‘engineering’ instructions that are followed without much critical assessment.

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