however, there is a major problem. To total costs and to total benefits it is
necessary (a) to allocate a numerical value to all costs and benefits, (b) to
allocate this value according to a single measure and (c) for this measure to
constitute a ratio scale.
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In practice this represents a major problem. This
problem is discussed in the next chapter.
Use of Net Benefit
Is the game worth the candle?
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Not surprisingly, since it is so manifestly rational, the net benefit rule is a
standard rule of decision making, recognised in many disciplines. These
include law,
311
public administration, organisational behaviour,
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economics,
finance and cognitive psychology.
313
For example, McShane and Von Glinow
assert that expectancy theory, which is underpinned by net benefit, “offers one
of the best models available for predicting work effort and motivation”.
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Changeover Costs and Benefits
Foolish consistency is the hobgoblin of little minds, adored by little
statesmen.
315
Introduction
Changeover costs and benefits are comprised of benefits and costs accruing
from a legislature or court dismantling the old rule – a statute, a common law
rule or an interpretation of one of these - and setting up the new rule. There are
two common types of changeover costs and benefits –
economic costs
(which are instrumental) and symbolic costs. There are also liberty costs, but
these relate to the special case of excessive judicial legislation and will not be
further considered.
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Benefits
By its nature a changeover from one statutory or judicial rule to another will
incur costs. While there may not necessarily be changeover benefits, they are
always possible. For example, when a legislative scheme is dismantled there
may be gains from the sale of plant or equipment that is no longer needed.
___________________
309
Howell (1997)
310
This is a proverb, possibly first used by Dr Raphael C Thomas.
311
Evans (2000) p 201
312
McShane (2001) p 78
313
Reeve (2001) pp 264-267
314
McShane 2001 p 78
315
Ralph Waldo Emerson
316
Where courts exercise excessive legislative function they create a liberty
cost. They interfere with the democratic liberty and right of a citizen to have the
legislative rule created by an elected legislature and not an unelected judiciary.
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