THESIS: Ethical analysis incorporates the gauging of the acceptability of an action to all parties that have a stake in the subject matter while the cost-benefit analysis considers material gain only.
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- Condition for implementation of cost-benefit analyzed policy
- Similarities in the definitions of the analysis methods and their interdependence
- Appropriate fields of applications
- The significance of the private and public value
In undertaking any task, it is necessary to analyze the effectiveness of policies implemented or used to govern the operation of the person or people undertaking a particular task. Policy evaluation employs two major and contrasting methods of analysis.
The policy evaluation methods are cost-benefit analysis and the ethical analysis. In cost-benefit analysis, the magnitude of the gain resulting to the use of a certain policy is numerically evaluated. In addition, the evaluation and incorporation of losses into the final sum gives the net benefit. Furthermore, the moral and the ethical implications of the policy are ignored.
In this method, the financial implications are of cardinal importance. Ethical analysis considers the moral justification of an action and the perspective of the society concerning the policy under evaluation.1 Ethical analysis incorporates the gauging of the acceptability of an action to all parties that have a stake in the subject matter while the cost-benefit analysis considers material gain only.
In cost-benefit policy analysis, it is impossible to implement a policy if the cost is greater than the projected benefits. In addition, numerical representation of all the factors under consideration facilitates analysis, and the factors are compared to establish their net value.
This aspect of the mode of analysis contrasts with the ethical analysis, which is incomparable arithmetically. Ethical factors have no numerical value. It is vital to consider the values and beliefs of the parties affected by the policy in ethic analysis of a policy.
Ethic analysis may be beneficial to the parties using it to decide on the implementation of policies in the long run. However, the policies are often not be sustainable on the basis of cost in the long run when they are implemented on the basis of ethical analysis.2
This is because the cost of implementing the policy may exceed the benefits. In contrast, cost benefit is almost certain to be financially sustainable since the cost is less than the benefits. However, the concerned parties may reject the cost- benefit analysis due to the unaccounted moral and ethical questions. The lack of ethical justification may cause the rejection of the financially favorable results.
Ethical analysis may also serve to cement the conclusion of cost-benefit analysis this happens where the cost and benefits of a policy are a part of the ethical justification. In this case, the two methods of analysis serve more or less the same purpose. The end product of the policy justifies the means of obtaining it in the case where the ethical analysis supplements the cost benefit analysis.
In another case, the cost analysis could supplement the ethical analysis if the total ethical value of a situation where the cost exceeds benefit is zero, and there is an ethical value when the benefits of a policy exceed the cost of implementation. In this case, the two methods of policy analysis supplement each other. However, the two methods remain distinct.
Ethical analysis may be most appropriate in a case where the implications of implementing certain policy have serious implications in the society that surpass the monetary value of the whole process. This may be whereby the policy affects human life.
Moreover, the cost-benefit analysis may not be appropriate since the outcome of the most cost effective policy may have serious consequences on human life.3 On the other hand, cost benefit analysis is most appropriate for the policies that have no serious consequences on the society
When one takes a utilitarian view, the context of the ethical analysis becomes relative. An action normally perceived as ethically inappropriate may turn into an ethically correct action if the immediate action alleviates another possible greater negative consequence of avoiding the action. The validity of the cost-benefit analysis in this situation is in the immediate context and ceases to be viable in the future.
The ethical correctness that is found in the policy now is also temporary and reverses its state in the future. The utilitarian view regarding the policy at that particular time asserts that the implementation of the policy is ethically correct.
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In addition, this view seems to advocate that the ethical justification of any policy is relative to time and the state of affairs at that particular moment. This contrasts with the absolute ethical analysis, which considers ethical values constant with time.
The cost-benefit analysis ignores the public value of the policies. Public value of the policies includes the ethical arguments derived from the majority of the population in the society. The public values are used to judge the appropriateness of a policy to the recipient community. In addition, the benefit should be viewed from the community’s perspective in the case of public values.
The public values in most cases will include consideration of benefits and the moral justification of the policy. In contrast, ethical analysis also ignores the blended nature of the public values and assumes a completely ethical stance.
This ethical stance may not be necessarily loss making but may lack the properties of the public values, which to some extent take into consideration material gain of the policy. While the cost benefit analysis considers private gain alone, the ethical analysis does not take into account the private values
While the normal way of the human being to make judgment includes two steps, the cost effective method of analysis constitutes of only one step. This step includes taking into account the benefits of the private interests of the stakeholders. After this step, then a decision on whether to implement the policy or not is made. On the other hand, the ethical analysis takes into account the last step of a balanced evaluation of a policy.
The intention of this step is to establish the acceptance of the policy by the majority stakeholders of the policy. This component must be weighed against the benefits to come up with a conclusion. In some cases, the benefits could outweigh the ethical consideration and this would automatically favor the utilitarian theory.4
In a case were universal practices are involved, ethical analysis will be favored at the expense of the cost-benefit analysis. This is because of the acceptability of the universal practices as long standing rules based on human nature. However, in the modern society the majority in most populations may favor cost-benefit analysis. This is a consequence of diverse beliefs and secularism present today.
Different beliefs and ethical orientations of the world society necessitate the creation of a neutral standpoint that is free of ethical considerations. The secular society has also advocated the importance of tangible wealth, which is taken into account by the cost-benefit analysis.
This seems to breach the boundary between the two analysis methods since the ethical considerations become relative to the view of the majority in the society. In the event of a secular society, the cost-benefit analysis seems to be similar to the ethical analysis since the material gain of the parties involved is the only consideration that the parties are making.5
In conclusion, the two methods of analysis are dependent on the situation. The values and beliefs of the people involved are the cardinal determining factor of the most appropriate nature of the analysis. The definition of the methods is also dependent on the beliefs and values of the parties involved or those who are affected by the policies.
Anderson, Elizabeth. Value in ethics and economics. Cambridge, Mass.: Harvard University Press, 1993.
Bromley, Daniel W., and Jouni Paavola. Economics, ethics, and environmental policy: contested choices. Malden, MA: Blackwell Publishers, 2002.
Gillroy, John Martin, and Maurice L. Wade. The Moral dimensions of public policy choice: beyond the market paradigm. Pittsburgh, PA: University of Pittsburgh Press, 1992.
Layard, Peter R. G.. Cost benefit analysis. 2. ed. Cambridge [u.a.: Cambridge Univ. Press, 1999.
Weber, Leonard J.. Profits before people?: ethical standards and the marketing of prescription drugs. Bloomington: Indiana University Press, 2006.
1 Gillroy, John Martin, and Maurice L. Wade. The Moral dimensions of public policy choice: beyond the market paradigm. (Pittsburgh, PA: University of Pittsburgh Press, 1992), 15.
2 Anderson, Elizabeth. Value in ethics and economics. (Cambridge, Mass.: Harvard University Press, 1993), 35.
3 Weber, Leonard J.. Profits before people?: ethical standards and the marketing of prescription drugs. (Bloomington: Indiana University Press, 2006), 38.
4 Layard, Peter R. G.. Cost benefit analysis. 2. ed. (Cambridge [u.a.: Cambridge Univ. Press, 1999), 236.
5 Bromley, Daniel W., and Jouni Paavola. Economics, ethics, and environmental policy: contested choices. (Malden, MA: Blackwell Publishers, 2002), 28.