Discretionary Wars, Cost-Benefit Analysis, and the Rashomon Effect: Searching for an Analytical Engine for Avoiding War

Abstract

Those of us who value analytic thinking about public policy and, in particular, about war, can learn a great deal from reading “Cost Benefit Analysis of Discretionary Wars” by Diane Hu and her coauthors.1 The article also raises many questions, and considering them spurs learning too. Their article contributes to the literature by formulating and implementing an approach to the cost-benefit analysis (CBA) of war that is tractable and amenable to empirical use. Notably, the authors add value by operationalizing several dimensions of war’s benefits, by introducing certain simplified methods of estimating the costs of war, and by applying their framework of measuring costs and benefits to five case-studies of discretionary war. As the authors note, they build on the work of Nordhaus (2002), Stiglitz and Bilmes (2008), and others regarding the costs to the United States of the Afghanistan and Iraq Wars, as well as on Hausken’s important theoretical framework for conducting a CBA of war (Hausken 2016). By abstracting from many complexities articulated by Hausken, the authors create an empirically oriented framework that can be populated with data from their case-studies of U.S. discretionary war.2 By examining a war’s benefits and assigning monetary values to them, the authors are able to juxtapose these monetized benefits to their estimates of these wars’ costs, thereby answering the question: Did the costs of these wars outweigh their benefits? The authors’ extensive attention to war’s benefits is distinctive, especially in estimating these benefits for five wars. (Other studies of a U.S. war’s monetized benefits focus on one war.3) Furthermore, they obtain a striking result: costs exceed benefits for all five wars. None, not even the First Gulf War or Korea, escapes the article’s grim verdict: negative net benefits should have ruled out these wars.