In recent years, developing countries have begun to use cost-benefit analysis because they need to have better analytic resources to conduct assessments of complex environmental policy. This article describes the beginnings of this methodology as a tool supporting decision-making in developed countries. Also described are some of the potential advantages of cost-benefit analysis to developing countries. An explanation is provided of some of the challenges posed by including it in a context other than what it has largely been applied. Also analyzed is the special importance of studying matters of distribution in developing countries. Lastly, possible reforms are presented that could facilitate adapting this methodology to the needs and priorities of developing countries.

A PDF of the full text of this article is available in Spanish here.