Market Failure and Government Intervention
firms would never want to announce the premise that they were anywhere near closing; so they would never do such analysis formally and announce it. Cost effectiveness analysis is about the only type of study where there is any standardization of procedure and shared approach between government and the private sector. However that kind of analysis is extremely weak in defining the objectives and benefits of projects. It focuses cutting costs in delivering a given output, or maximizing output given a fixed budget. Don’t use it for figuring whether or not a project is worthwhile. Just use it to choose which project is the most efficient way to get something done.