Q ..
When you first were with the Bureau and the Corps, benefit/cost was significantly
different than it is now, wasn't it?
Right. Now they've made a lot of sophisticated changes in benefit/cost analysis. Whether
A
they're getting any better at answers or not is maybe questionable but at least it looks
better. The sophistication makes it appear like we are getting better answers.
Q ..
But as far as I understand it, isn't it mostly to tighten up, to make fewer projects available
by making many more criteria?
Different people have different motivations for it. But obviously a Congressman who has
A
a potential project in his backyard, he isn't really so concerned about the benefit/cost ratio
as his colleague is in another part of the country who doesn't want to put out funds for that
guy's area unless he's dang sure that it is a good investment. So, it depends on what seat
you're in whether you're concerned about it or not.
But, anyway, the whole idea was when they went through many of these Congressional
committees and inter-agency committees to come up with ways of doing benefit/cost
analysis. They wanted to be consistent. The big problem was that everybody was doing
it different. They wanted to have a common approach to establishing the adequacy of
water resource projects.
And, of course, they didn't. They don't just use economics in deciding on whether a
project is worthwhile or not. They talk about maximum net economic benefits. Then they
talk about maximum net benefits. There is a difference between the two of them because
it's just hard to quantify the intangible benefits like preventing loss of life or reducing a
risk to the people downstream, inconvenience, reducing inconvenience, and all that kind
of stuff. It's hard to put a dollar value on it.
When you're doing one of these analyses you have a hard time explaining why this project
is really better than what the benefit/cost ratio says on it. You have to do it in words, it's
hard to do it in dollars and many people have attempted to do it. It's pretty hard to
convince anybody else that your computations are worth while.
Q ..
Isn't that one of the problems that the Corps ran into with recreation--how do you compute
the benefit of recreation from all these multiple-purpose developments?
A
Well, they had a hard time doing that but they did get to the point where, after making a
lot of surveys and studies that people are using recreational facilities, they were able to
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