Cost-benefit analysis of the ban on drugs in netherlands - Essay Example

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The case under study will consider the use of cost-benefit analysis as one of the economic approach to testing the cost that the society will incur if they opt for either of the mentioned policies (Cleveland, 2008, p. 563). On the other side of the coin, the benefit that each of the two options will accrue will also be measured, and the further systematic test procedure qualifies one to be adopted. Economic policies across the world have been influenced by both political and social factors. It is worth noting that the general welfare of people is given priority. In any economic idea in the society, critical analysis needs to be carried out to ascertain its benefit or loss to the people. Various concepts are applicable in this respect but their uses also depend on the nature of economic variables under question (Chris & Wilhite 2004, pp. 108-9). Cost-benefit analysis is an economic concept that has a wide use. In project appraisal it is one of the recommended methods of testing the viability of a project. . It is a double faced in-depth analysis of the various cost that would be incurred in making a given investment policy and comparing with the benefit that would be obtained from successfully undertaking the project under question. Its application is not only limited to economic projects but also covers the political decisions that are pegged on economic results. An example includes decisions by the government to introduce a given statute that will regulate a given behavior of a specific group of people. In this regard, the Netherlands is faced with a policy dilemma of whether to legalize the aforementioned drugs or to put a ban. Some of the challenges that it faces are the issue of a high influx of tourists who pose a threat to the law regulating the consumption of these drugs (Miron & Zwiebel, 2005, pp.67-8). It is, therefore, important to draw a cost-benefit model that would check which way is the best to go. Social cost of prohibition tends to be higher as it triggers various socials ills in the society, which translates to retrogressive economic direction of the country. On the other side, legalization comes with some costs of formulating and harmonizing the legal policy across the various groups of people that include citizens and foreigners without creating any negative impact on the diplomatic relations with other states and the tourism sector (Miron, 2001, p. 851). In estimating the costs, there is a breakdown of various tangible and intangible costs, and this is a characteristic of the legal proposals that the Dutch authorities are trying to put across. Benefits in terms of economic policy also have a wide use and sum up all the positive contributions of a given idea which includes reduction of negative factors. In applying the concept of cost-benefit analysis in the case of this country, we are simply assuming that the cost has a negative sign while the benefits have positive signs. When the two are summed up, a positive sign is deemed acceptable; the negative result, on the other hand, is considered a burden while zero may mean that other factors are taken into consideration. In relation to the case of imposing a ban on the drugs, a lot of social costs are eminent (Chris & Wilhite, 2004, p. 114; Cleveland, 2008, p. 577). One of them is the ...Download file to see next pagesRead More