States that use cost-benefit analyses tend to make better investments of public dollars by identifying programs and policies that deliver high returns, a new study has found.
The majority of states, however, have yet to consistently use this approach when making critical decisions, according to a report released Monday by the Pew-MacArthur Results First Initiative, a project of The Pew Charitable Trusts and the John D. and Catherine T. MacArthur Foundations.
Today, states struggle under continuing pressure to direct limited dollars toward the most cost-effective programs and policies while curbing spending on those that fail to deliver.
The study found that 10 states–Florida, Kansas, Minnesota, Missouri, New York, North Carolina, Utah, Virginia, Washington and Wisconsin–were in the vanguard using cost-benefit analyses to generate answers about programs’ return on investment and to drive policy decisions, particularly in their largest budget areas.
Twenty-nine states and the District of Columbia were using cost-benefit analyses, but less effectively or consistently. Eleven states trailed: Arizona, Idaho, Kentucky, Montana, Nevada, North Dakota, Rhode Island, South Carolina, South Dakota, West Virginia and Wyoming.
“Many policymakers are looking for information that would allow them to target cuts more strategically, rather than make across-the-board reductions that treat effective and ineffective programs alike,” Gary VanLandingham, director of the Results First Initiative, said in a statement.