What I still don’t get is how you can simultaneously state that previous attempts at policy criteria have not been particularly successful, and continue advocating such an old technique as cost-benefit analysis. If it’s failed in the past, why do you think it will suddenly start to work again in the future? You haven’t answered that question. (Nor have you answered mine about what it means to correlate a policy position to an organisation).

Perhaps I can’t generalize this into a consistent rule of conduct…

So then why are you advocating it as a policy approach? I would have thought that a fundamental requirement for a policy approach would be that it could be applied with some consistency.

I’m not an ethicist which is why I keep hoping a few will enter debates on economic justifications for public policy, but…

Cost/benefit is where Ford decides to save $10 per Pinto on a reinforced gas tank because the amount they may have to pay out later won’t equal the amount they save. It is based upon probability and is totally amoral (or immoral, if you prefer).

Ethics is where society decides to forgo additional taxes on those that can afford it instead of using the money so generated to cover the health needs of the uninsured. There is no probability involved here, we know how to correct an immediate social wrong, but the powerful prevent it.

Perhaps I can’t generalize this into a consistent rule of conduct, but it is clear that we are talking about different categories of costs and benefits in the two cases.

What would it mean to correlate a moral position to a political organisation?

… or prescribe social policies that will lead to the preferred goals. This is also a problem for many others who use economics as a support for social policy recommendations.

This is really really odd. Your suggested policy criteria of “if a policy improves the lot of many people and does little harm to the “haves”" sounds to me exactly like standard cost-benefit analysis. But in the line above you climaed that “none of the other attempts have been particularly successful so far.” If standard cost-benefit analysis has not been particularly succcessful so far, why do you suggest using it again? What’s special about the future that makes you think it will work now, when it hasn’t, at least according to you, in the past.

And yes, Easterly and Collier do have the problem that they don’t know what social policies will lead to the preferred goals. This is a problem of ignorance. I don’t see how standard cost-benefit analysis as you describe deals with this problem of ignorance. After all, it’s all very easy to say that we should adopt a policy when the benefits outweigh the costs, the problem is in measuring the benefits and the costs. See this critique by Friends of Earth for a starting point for the problems with cost-benefit analysis such as you advocate.

Economics is not a morality free endeavor no matter how much some claim. Focus on morality and ethics first.

Nope. Focus on understanding the world first. Morality and ethics are useless, or worse, if you don’t know what you’re applying them to. For example, what is moral about advocating continuing procedures that have failed again and again in the past, just becuase they sound attractive at first glance from a moral viewpoint? I know of nothing in morality and ethics that requires us to be ignorant or stupid.

According to an article in the LA times http://tinyurl.com/ot9ppw

“The director of a London-based think tank called the study an interesting paper on a pertinent topic, but said it is ruined by the ideological assumptions it manages to smuggle in.”

Nathan dismantles Collier’s work with great finesse, citing “…unsubstantiated explanations of results; incomplete, inaccurate and biased data; and theoretical and analytical flaws that preclude an adequate understanding of the causes of civil war. The greatest problem is that [Collier & co-author] seek to ascertain the causes of civil war without studying civil wars, and attempt to determine the motives of rebels without studying rebels and rebellions. Their most prominent finding – that dependence on natural resources heightens a country’s risk of war because it affords rebels an opportunity for extortion – is not based on any evidence of rebel behaviour; it is an inference drawn from a correlation between the onset of civil war and the ratio of primary commodity exports to GDP. To borrow a felicitous phrase from Keynes, the C&H model suffers from a “frightful inadequacy of most of the statistics”

The problem is that they can’t correlate moral positions to political organizations or prescribe social policies that will lead to the preferred goals. This is also a problem for many others who use economics as a support for social policy recommendations.

Perhaps it is time to try a different approach, none of the other attempts have been particularly successful so far.

I suggest basing policy on morality and fairness, or even happiness. If a policy improves the lot of many people and does little harm to the “haves” then it is worth carrying out regardless of how it measures on some arbitrary economic scale. For example it is clear the providing health care in the US to all is a “good thing” from a moral point of view. Once this has been set as a goal then economists can be called in (along with other social scientists) to offer advice on the costs of various approaches.

The same is true with international development. Raising the poor to a decent level of income is the moral objective, but this is not universally agreed on. Many who oppose it are disingenuous and support the status quo of excessive wealth maldistribution, but instead of revealing their self interest they make claims about dependency of the poor on aid or debasement of entrepreneurship or other such claims.

Economics is not a morality free endeavor no matter how much some claim. Focus on morality and ethics first.