- Issue Brief
Why Cost-Benefit Analysis Matters
In the current fiscal environment, most states face tough budget choices and lack the resources to support traditional levels of public services. Increasingly, policy makers seek programs and policies that yield the greatest benefits in the most cost-effective way. Rigorous analysis of available research can help state leaders:
- Systematically identify which programs work and which do not;
- Calculate potential returns on investment of funding alternative programs;
- Rank programs based on their projected benefits, costs, and investment risks;
- Identify ineffective programs that could be targeted for cuts or elimination; and
- Predict the impact of different policy options.
What Policy Makers Say about Cost-Benefit Analysis
Republican and Democratic leaders in Washington State report that this new approach, developed by the Washington State Institute for Public Policy, has helped produce bipartisan policies that improved results while saving more than a billion dollars.
"I came from the business sector where we relied on evidence on what was a good investment. In the legislature, I realized we needed to do the same thing. Otherwise, you make decisions based on opinions and anecdotes or one person’s favorite study that may be the exception."
—Skip Priest (R), former ranking Republican, Washington State House Committee on Education
"We have research showing ways to lower the crime rate and save money by investing in preventing crime in the first place. It has allowed us to consider policies that are the most effective even if they don’t sound like a sound bite."
—Senator Jim Hargrove (D), chair, Washington State Senate Committee on Human Services and Corrections
How We Conduct Our Work
We offer tools to states that more accurately assess the true costs and benefits of public programs. This allows policymakers to identify options that yield the greatest return on investment for taxpayers.
We also help states build a climate for decision-making based on research and evidence. This allows states to eliminate ineffective programs and shift resources to those that generate better outcomes for their citizens.
Results First in Your State
- Government Performance
The LATEST from the Project
- Press Release
- Pew-MacArthur Results First Initiative
The choices states make today about how to invest their limited resources will dramatically shape our nation’s future. more
This 2012 brief details how Results First, an initiative of the Pew Center on the States and the John D. and Catherine T. MacArthur Foundation with additional support from the Annie E. Casey Foundation, helped other states implement Washington’s model for use in criminal justice. Over time, this model can be implemented in policy areas such as child welfare, health care, housing, Pre-K-12 education, mental health, public assistance, substance abuse, and teen birth-prevention programs.