Basing decisions on evidence of cost-benefit

Integrate cost analysis into program evaluations

Lady looking laptop screen Government policymakers need to know more than whether a program works. They also need to know whether it's cost-effective. Policymaking becomes evidence-based when it determines the answers to important questions:

  • What does this program cost?
  • Is this program cost-effective?
  • Which version of this program is most cost-effective?

Going beyond gauging outcomes, information on costs and cost-effectiveness is valuable in identifying the programs and policies with the highest return on investment. The result is wiser spending of scarce government resources to achieve the public program goals.

Rather than guesses, integrating cost analyses into program evaluations produces reliable data for decisions.

To bring true change, federal agencies could start by requiring agency-funded program evaluations to assess costs. For proof of successful evidence-based approaches to informing policy and budget processes, the federal government can look to states and counties. New Mexico’s Legislative Finance Committee, for example, analyzed a range of policy areas to inform state leaders about programs with the highest return on investment. The results led to investments of more than $400 million in cost-effective programs, including increased spending on pre-kindergarten education.

Download and read “The Evidence-Based Policy Revolution Waiting to Happen” for more on the possibilities.


Stephen SparksAndy Feldman
Director, Strategy
T +1 571 444 1943