Question

“Social Cost-Benefit Analysis (SCBA) is an assessment method used to determine the economic prudence of a project, programme, or policy to all relevant members of society”. Critically examine this statement.

Answer 1

Social Cost Benefit Analysis
The Social Cost Benefit Analysis is considered as a tool that helps to make decisions about effective and cost benefit approach in implementing a new project or policy. The analysis considers the cost of the project or policy and the probable social impact that the same could make. Even though it tries to detect the social impact, the question is who all are considered. The definition of the cost explained here is an impact which may not affect the entire society.
Let us consider examples of a new highway or metro project in a place. Analyzing with the tool of social cost benefit analysis determination of the cost of the project, which who all are affected and also who are benefitted. A cost benefit approach for the construction of the project may provide a very less compensation for the people who loose assets because of the project. Also the people who are highly benefitted from the project may not sacrifice anything for their welfare. This is an important drawback of the analysis of the mentioned social costs and the benefits trying to provide. The people who benefits are only a certain percentage when those who suffer and those are less benefitted are high for the project. Thus it makes a clear inequality in determining the social costs and benefits. The tool may not always consider the entire social member for the analysis.