Hostname: page-component-8448b6f56d-m8qmq Total loading time: 0 Render date: 2024-04-25T03:49:23.046Z Has data issue: false hasContentIssue false

How Systems Analysis, Cost-Effectiveness Analysis, or Benefit-Cost Analysis First Became Influential in Federal Government Program Decision-Making

Published online by Cambridge University Press:  02 September 2019

Alain Enthoven*
Affiliation:
Marriner S. Eccles Professor of Public and Private Management (Emeritus), Knight Management Center, Stanford University, 655 Knight Way, Stanford, CA 94305, USA, e-mail: enthoven@stanford.edu

Abstract

In 1948, the RAND Corporation, formed to connect military planning with research and development decisions, became an independent nonprofit organization. Before then, cost-effectiveness analysis, benefit-cost analysis, and systems analysis had no established home in the federal government. In the 1950s, under the leadership of Charles Hitch, Chief, RAND Economics, undertook a program of activities they called “systems analysis,” including evaluation of the costs and effectiveness of weapon systems. In 1961, Robert McNamara appointed Hitch to be the Comptroller of the Department of Defense and invited Hitch to carry out his vision he described as “Programming and Systems Analysis.” Programming became the Planning, Programming, Budgeting System (PPBS) and the Five-Year Defense Program that linked strategies to forces to budgets. Systems Analysis assisted the Secretary to make choices of weapon systems and strategies. In 1965, Hitch returned to California and ultimately became President of the university. McNamara wanted Systems Analysis to report directly to him, and on his recommendation, President Lyndon Johnson appointed me Assistant Secretary for Systems Analysis. In 1966, the President directed that all departments in the executive branch establish offices based on the Systems Analysis model. In 1967, Henry S. Rowen became President of the RAND Corporation. He broadened RAND’s scope beyond the military to include Health Services, education, urban problems including homelessness, ethics in scientific research, and climate research. In 1970, Rowen led the establishment of the Pardee RAND Graduate School, offering a doctoral degree in Public Policy Analysis to extend widely the application of the RAND Systems Analysis approach to many fields.

Type
Commentary
Copyright
© Society for Benefit-Cost Analysis, 2019 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Congressional Budget Office. 2016. An Introduction to the Congressional Budget Office. Available at https://www.cbo.gov/sites/default/files/cbofiles/attachments/2016-IntroToCBO.pdf. (accessed June 13, 2019)Google Scholar
Enthoven, Alain and Smith, K. Wayne. 1971. How Much is Enough? Shaping the Defense Program 1961-1969. Santa Monica, CA: RAND Corporation.Google Scholar
Wikipedia. 2018. Director of Cost Assessment and Program Evaluation. Available at https://en.wikipedia.org/wiki/Director_of_Cost_Assessment_and_Program_Evaluation.Google Scholar
Wohlstetter, Albert, Rowen, Henry S., Hoffman, Fred, and Lutz, Robert. 1954. The Selection and Use of Strategic Air Bases. Santa Monica, CA: RAND Corporation. https://www.rand.org/pubs/reports/R0266.html.Google Scholar