Public administration planning in developing countries a Bayesian decision theory approach

Decisionmaking under uncertainty is visualized as a game against nature. The policymaker is the player and has a set of alternatives or strategies from which he desires to choose the most effective. He is confronted with a variety of possible states of nature that may evolve after his decision is made. The key states of nature are identified and their interactive relationship to the strategy options are specified. Important roles in the resulting analysis are played by the probabilities of successful project initiation and implementation. It is shown that neglect of the inherent uncertainty aspects leads to evaluations (benefit-cost ratios) of proposed reforms and projects which can be seriously upward biased.