In its engagements, GAO may review economic analyses that are intended to inform decision-makers and stakeholders about the economic effects of a public action. The economic analyses that GAO reviews may have been performed to meet requirements described in Executive Order or related statutes, to propose or support an action, or to examine an action that has already been taken. The purpose of this report is to inform the public about the methodology that GAO may use to assess these economic analyses.
We prepared this report under the authority of the Comptroller General to answer the question: What are key methodological elements of an economic analysis that is intended to inform decision-makers and stakeholders? We answered this question by reviewing economic elements and concepts that serve as the basis for sound economic analysis. We considered a wide range of economics documents prepared by various government agencies and institutions on how economic analysis should be performed. These documents included, among others, Circulars released by the Office of Management and Budget (OMB) and handbooks for economic analysis from federal and international agencies, such as the U.S. Environmental Protection Agency, the U.S. Department of Defense, the U.S. Department of Transportation, the Organization for Economic Co-operation and Development (OECD), and HM Treasury Government of the United Kingdom. In addition, we consulted with experts on economic analysis of public actions. We synthesized economic concepts embodied in these documents into the present report for use by GAO in assessing economic analyses.
GAO’s commitment to informative and transparent economic analysis is in line with the Office of Management and Budget’s guidelines on achieving a high degree of transparency in data and methods in scientific information.
An important benefit of transparency is that the public can assess the structure of an analysis and, in particular, how much of an analytic result hinges on the specific choices made by the authors.
This transparency indicates the solidity of the analytic choices. For example, it allows the implication of these choices, related risks, and uncertainties to be readily assessed. This type of sensitivity analysis is regarded as an essential feature of high-quality analysis, and it cannot be undertaken without a high degree of transparency.
The key methodological elements we identify in this report are not intended to be exhaustive and to supplant or alter relevant federal and agency requirements for economic analysis. They simply serve to establish a sound baseline framework for the assessment of an economic analysis. GAO’s assessment methodology examines the extent to which an economic analysis properly dealt with these key elements and, accordingly, informed decision-makers and stakeholders about the economic effects analyzed.
We conducted our work from June 2017 to April 2018 in accordance with all sections of GAO’s Quality Assurance Framework that are relevant to our objectives. The framework requires that we plan and perform the engagement to obtain sufficient and appropriate evidence to meet our stated objectives and to discuss any limitations in our work. We believe that the information and data obtained, and the analysis conducted, provide a reasonable basis for any findings and conclusions in this product.
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John Stewart Editor, OutdoorWire.com Vice President, BlueRibbon Coalition
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