Pew-MacArthur Results First Initiative Cost-Benefit Study
The Pew Charitable Trusts and the John D. and Catherine T. MacArthur Foundation joined to form the Pew-MacArthur Results First Initiative. The joint project works to partner with states in implementing cost-benefit analysis models.
The study detailed four basic findings.
- All states conducted cost-benefit analyses at least once between 2008 and 2011.
- 29 states and the District of Columbia conducted at least some studies that evaluated multiple policy options for "making smarter investments of public dollars."
- 36 states reported that at least one of their cost-benefit analyses influenced policy decisions or debate.
10 best states
According to the report, 10 states used cost-benefit analysis more than the rest of the states with respect to determining return on investment regarding state programs. In addition, these states were more likely to use cost-benefit analysis with respect to large budget areas and when making policy decisions. Those 10 states listed were:
29 states with mixed results
Twenty-nine states and the District of Columbia had mixed results, using cost-benefit analyses but less effectively or consistently. Those 29 states were:
11 worst states
Study authors found 11 states that made rare use of cost-benefit analyses in policy and budget debates. Those 11 states were:
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
Gary VanLandingham, director of the Pew-MacArthur Results First Initiative, issued the following quote when the study was released.
|“||States that are committed to ensuring that taxpayer funds are spent effectively are turning to cost-benefit analysis. Many policymakers are looking for information that would allow them to target cuts more strategically, rather than make across-the-board reductions that treat effective and ineffective programs alike. Policy and spending choices should be based on evidence about what works and what does not. The bottom line is while the use of cost-benefit analysis is growing, states should be making wider and better use of this approach.||”|
For this report, the authors evaluated the states on three criteria:
- The number of cost-benefit studies released per year during the four-year study period.
- Whether these studies assessed multiple program options to compare policy solutions.
- Whether and the extent to which study findings influenced budget and policy decisions.
To determine states' use of cost-benefit analyses, report authors conducted a systematic search and assessment of state cost-benefit studies released between 2008 and 2011.
The Pew-MacArthur Results First Initiative attributes the following values to the impact cost-benefit analyses can have for state legislators.
- 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.
About Results First
The Pew-MacArthur Results First Initiative "works with states to implement an innovative cost-benefit analysis approach that helps them invest in policies and programs that are proven to work." There are three basic questions the Initiative seeks to answer.
- Are states conducting cost-benefit analyses?
- Do they use the results when making policy and budget decisions?
- What challenges do states face in conducting and using these studies?
- Pew Charitable Trusts, "States' Use of Cost-Benefit Analysis (Project Summary)," July 29, 2013
- Pew Charitable Trusts and MacArthur Foundation, "States' Use of Cost-Benefit Analysis (Full Report)," July 2013
- Pew Charitable Trusts, "New Report Finds Cost-Benefit Analyses Improve Budget Choices & Taxpayer Results," July 29, 2013
- Pew Charitable Trusts, "State Work," accessed June 6, 2014
- Pew Charitable Trusts, "States’ Use of Cost-Benefit Analysis," July 29, 2013
- Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
- Pew Charitable Trust, "Pew-MacArthur Results First Initiative," accessed June 6, 2014