Benefit-Cost Analysis in the Chehalis Basin: A West Coast Saga Exemplifies How These Analyses Can Create More Controversy Than They Resolve
Scott, Ryan, Zerbe, Richard O., Jr., Scott, Tyler, Regulation
For decades, academics have worked to develop an effective method for evaluating the costs and benefits of different policy responses to a public problem. The result of those labors, benefit-cost analysis (BCA), has been adopted by policymakers, government agencies, and other political actors. However, their application of BCA diverges widely from academic efforts. To illustrate the difference between what we call "ideal BCA" and "bureaucratic BCA," we offer the following story of how BCA has been used in watershed management and flood control policymaking in the Chehalis Basin of Washington state.
The Chehalis Basin, the second largest in Washington, has been a site of political rancor over flood control and infrastructure policy for over a century. The use of BCA has failed to alleviate--and has even contributed to--policy gridlock and controversy in the region. The Chehalis Basin is a "typical case" of using BCA to evaluate a river basin's flood control policies; put simply, the tale we tell is exemplary, not extraordinary.
In his 1995 book Trust in Numbers, historian Theodore M. Porter points out that the "history of cost-benefit analysis in the United States bureaucracy from the 1920s until about 1960 ... is not a story of academic research, but of political pressure and administrative conflict." Porter reveals how a set of "bureaucratic practices" was transformed into a "set of rationalized economic principles." Yet little attention has been given to the application of BCA in its bureaucratic setting. The bureaucratic lens focuses not only on the value of benefits and costs, but also on how a bureaucrat may utilize BCA to structure or influence the decisionmaking process itself.
The Case: A Problem in the Chehalis Basin
The Chehalis River, which is located in southwestern Washington approximately 80 miles south of the city of Seattle and almost an equal distance north of Portland, Ore., is the second largest river basin in the state. It drains an area reaching from the Olympic Mountains to the north, the Willapa hills to the south, and the Cascade Mountains to the east, before it enters the Pacific Ocean at Grays Harbor. The total population of the basin is approximately 130,000 people.
When the Chehalis River topped its banks on December 3, 2007, it reinvigorated a century-old debate about how to prevent the river from inundating the towns of the basin. The economic cost of the flooding was $166 million, according to one damage estimate. The flood affected the broader state economy as well. Flooding closed part of Interstate 5, the major north-south vehicle corridor on the West Coast, for five days, and closed the primary north-south freight railway corridor as well. Gov. Christine Gregoire declared the basin a disaster area and pledged to provide funding to prevent a flood from occurring again.
However, two years later, before any policy actions had taken place, the river again sprung its banks, flooding the same areas and again dosing I-5. With two floods having dosed the highway and damaged the local economy in just a few years, local stakeholders, the Washington State Department of Transportation, and the governor's office began working toward identifying and funding a policy solution. Thus, they joined the same policy debate that local citizens, regional governments, state and federal agencies, and Indian tribes have engaged in regarding flooding in the Chehalis Basin since the beginning of federal flood control programs in the early 20th century.
The Chehalis River has always posed a vexing flood problem. Since the first settling farmers laid down their plots in the 1800s on what were then camas prairies (named for the plant camassia) inhabited by the local Chehalis tribes, flooding has disrupted agricultural practices and interrupted the major transportation route between the Puget Sound region and the Columbia River. …