Combining Participatory Budget and Cost Benefit Analysis: A hybrid project evaluation framework

Abstract

This paper introduces a novel hybrid methodology proposes integrating Cost-Benefit Analysis (CBA) with Participatory Budgeting (PB) to enhance public sector decision-making. To highlight the approach, we assume that CBA has been conducted to evaluate twelve independent infrastructure and service projects, establishing their economic viability. Subsequently, PB is employed to elicit community preferences regarding the same projects, ensuring alignment with public values. The combined framework aims to reconcile technical efficiency with democratic legitimacy, promoting government outcomes that reflect both expert analysis and citizen priorities. Our findings reveal a strong community preference for projects that improve health outcomes and utility infrastructure, while initiatives focused on transport electrification received comparatively low support. These results underscore the importance of incorporating public sentiment into investment decisions, particularly in sectors where societal benefits may be perceived differently than economic returns.