Cost/Effectiveness Analysis of Foreign Policy Alternatives: Need, Approach, and Prospects

Three existing macro-approaches to the evaluation of foreign policy alternatives are identified. It is suggested that a variant of one such approach, cost/effectiveness analysis, is the most promising candidate to effect a rigorous, systematic, comprehensive, and fundamental evaluation of U.S. foreign policy. The advantage of this methodology include: (1) its ability to deal with objectives in a comprehensive manner and to explore the implications of alternative sets of objectives, (2) its insistence that the linkages between objectives, programs, costs, and effectiveness be made explicit, and the ability to test the significance of any such assumed relationships, (3) its ability to reveal to decision-makers, in terms of costs and effectiveness, the implications of alternative courses of action. The paper outlines eight steps comprising a cost/effectiveness analysis, describes the subanalyses and other processes contained in each, discusses relevant data sources, and identifies major problems that would be confronted by anyone undertaking such an analysis. The paper also explores the prospects for adoption of the proposed methodology in various sectors of the analysis community.