Conclusions and implications

While cost-benefit analysis (CBA) may be used to appraise policy options, other analytical tools may be more relevant than CBA to option appraisal in this specific context. And some other tools are relevant to other early parts of the policy cycle about transformative change, such as tools which help imagine alternative plausible futures, understand complex systems and assess risk and uncertainty. These tools could be upweighted.

Greater long-term investment in analytical capability might be needed for policymakers and analysts to become more familiar with, and possibly use, new or under-utilised tools. This investment reflects that analysing transformative change is challenging, analytical capability in New Zealand has been found to be limited, selecting the right tool for the job requires knowledge of diverse tools, and perspectives on specific tools are deeply held and may be hard to shift. There is no quick fix to building deeper analytical capability.

However, there may be some shorter-term opportunities to improve analyses about transformative change. These opportunities include developing analytical tools that better reflect te ao Māori – a  recognised gap. They also include lowering discount rates in CBAx guidance and/or introducing a separate discount rate for long-term investments as used in many other countries, to prioritise future impacts.

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