1for2: 1 School for 2 Opposing Political Groups' Children

1. USAID, 2004: Conducting a Conflict Assessment: A Framework for Strategy and Program Development 

2. UNDP, 2002: Handbook on Monitoring and Evaluating for Results

3. OECD, 2007: Encouraging Effecitve Evaluation of Conflict Prevention and Peacebuilding Activities: Towards DAC Guidance

4. Search for Common Ground, 2006: Designing for Results: Integrating, Monitoring, and Evaluation in Conflict Transformation Programs

Cost-benefit analysis

The cost of the school might be high, but its relative benefits might be a lot greater than any other conflict-resolution option for Cyprus, and perhaps great enough to overcome the intransigence of the stalemate. 

What is cost-benefit analysis?

1.      Economic assessment of a program’s impact taking costs into account

2.      Evaluation of alternatives according to their costs and benefits, when each is measured in monetary terms

3.      One way to determine the value of a program or intervention – and convince others that it has public value

4.      Usually builds on rigorous program evaluation

5.      Typically measures a wide range of outcomes

6.      Usually accounts for public benefits to society but may also consider benefits to individuals  and families

7.      Is both an art and a science – especially when assigning monetary values to benefits

8.      Allows for comparisons across programs, policies, and other types of interventions

Terminology used

1.      Financial costs vs. economic or opportunity costs

2.      Personal vs. public benefits

3.      Present value and discounting

4.      Net economic return = Benefits – Costs

5.      Benefit-cost ratio = Benefits / Costs

Conservative estimates as the basis

1.      Over-estimation of program costs

2.      Volunteer time and other “opportunity costs”

3.      Economy of scale – costs of running a program often go down over time

4.      Under-accounting of benefits

5.      Many benefits not easily assigned monetary value

6.      Anything not included in program evaluation design will not be included in benefits

7.      Diffusion of effects to other family members, classmates

Concerns

1.      A cost-benefit analysis is only as good as the  program evaluation it is based on

2.      Even if the cost-benefit ratio is low, a program may still be valuable

3.      Cost-benefit analysis doesn’t account for outcomes that can’t be monetized

4.      A focus on economic benefits can lead us to lose sight of other good reasons for providing services

5.      Cost-benefit analysis is only one of many factors when making program decisions

Click here to learn more about cost-benefit analysis.

Cost-effectiveness analysis

1.      Used to compare the costs and outcomes of alternative programs or policies seeking to achieve the same goals

2.      Key outcomes are identified, and different strategies that affect those outcomes are compared

3.      Monetary values are only assigned to costs, not to outcomes

4.      Other benefits beyond the target outcome are not taken into account

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