Sustainable Development Assignment.doc

Sustainable Development Assignment.doc - Department Of...

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Department Of Development Studies Bed_3202: Sustainable Development Assignment NAME: Kowthar Hassn Shaffat BDS/2014/57950 1. What criteria would you use to determine ‘effectiveness’ of analysis? What information would you need in order to improve our understanding of ‘technology’ in the context of sustainable development? There are many ways to measure the effectiveness of an organization. Campbell (1977) lists over 30 different criteria from productivity, profits, growth, turnover, stability and cohesion. Different theoretical perspectives can account for the diversity in usage of effectiveness measurements. Rational perspectives emphasize goal attainment and focus on output variables such as quality, productivity, and efficiency. Natural system perspectives focus on the support goals of the organization such as participant satisfaction, morale, interpersonal skills, etc. Open system perspectives focus on the exchanges with the environment -- this includes information processing, profitability, flexibility, and adaptability. Cost-effectiveness analysis (CEA) is an alternative to cost-benefit analysis (CBA). The technique compares the relative costs to the outcomes (effects) of two or more courses of action. CEA is most useful when analysts face constraints which prevent them from conducting cost-benefit analysis. The most common constraint is the inability of analysts
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to monetize benefits. CEA is commonly used in healthcare, for example, where it is difficult to put a value on outcomes, but where outcomes themselves can be counted and compared, e.g. ‘the number of lives saved’. Cost-effectiveness analysis entails the monetization of all (or the most important) costs and benefits related to existing public intervention or all viable alternatives at hand. CEA is mostly used during the appraisal stage of a new intervention. In its most recurrent form, it disregards distributional impacts and only focuses on the selection of the regulatory alternative that exhibits the highest net benefit. Accordingly, the most common methodology in cost-benefit analysis is the “net benefits” calculation, which differs from the “benefit/cost ratio” method that is typically used in cost-effectiveness analysis (being benefit minus costs, rather than benefits divided by costs). There are pros and cons of choosing CEA as the method to be used in comparing policy proposals. The principal advantage in the ability of CEA to use an objective unit of measurement (monetized values) to compare alternative options and choose the one that maximizes the “size of the pie”, i.e. societal welfare as described in mainstream economics. The shortcomings, however, are often quite critical for CBA, and mostly refer to the assumption that income can be a proxy for happiness or satisfaction, the fact that it willingly ignores distributional effects (despite some attempts to adjust the methodology to reflect them), and its lack of objectivity when it comes to the selection of certain parameters (e.g. the inter-temporal discount rate), which can tilt the balance in favour of certain regulatory options over others.
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