Democracy and sustainable development—what is the alternative to cost–benefit analysis?

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Abstract

Cost–benefit analysis (CBA) is part of neoclassical economics, a specific paradigm, or theoretical perspective. In searching for alternatives to CBA, competing theoretical frameworks in economics appear to be a natural starting point. Positional analysis (PA) as an alternative to CBA is built on institutional theory and a different set of assumptions about human beings, organizations, markets, etc. Sustainable development (SD) is a multidimensional concept that includes social and ecological dimensions in addition to monetary aspects. If the political commitment to SD in the European Union and elsewhere is taken seriously, then approaches to decision making should be chosen that 1st open the door for multidimensional analysis rather than close it. Sustainable development suggests a direction for development in a broad sense but is still open to different interpretations. Each such interpretation is political in kind, and a 2nd criterion for judging different approaches is whether they are ideologically open rather than closed. Although methods for decision making have traditionally been connected with mathematical objective functions and optimization, the purpose of PA is to illuminate a decision situation in a many-sided way with respect to possibly relevant ideological orientations, alternatives, and consequences. Decisions are understood in terms of matching the ideological orientation of each decision maker with the expected effects profile of each alternative considered. Appropriateness and pattern recognition are other concepts in understanding this process.

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