Quantitative Research and Cost Benefit Analysis in International Relations

 Photo credit: Sharon McCutcheon

Photo credit: Sharon McCutcheon

A well-rounded diplomat isn’t just skilled with words They also have a finesse for numbers. Quantitative skills are a valuable tool in diplomacy and international relations. Using statistics and data analysis can showcase new perspectives on information and can provide new knowledge for operations of small and large scale.

Quantitative analysis is evidence-based assessment that addresses gaps and flaws in existing policy, supports new initiatives, or used as a tool to choose between options. Utilising this skill can assist with operational pursuits in illustrating the value of diplomacy over war.

Performing cost and benefit analysis is an essential function for success, even in diplomacy. The need for benefits to outweigh costs is not just significant for businesses and corporations. In this field, it is a useful task to highlight the successes of operations, management, and even larger policy initiatives.

Some of the main quantifiable costs of operations for embassies include staffing expenses, overheads, revenue lost (gained), insurance expenses, fines/penalties, depreciation of property, plant and equipment, and public relations expenses. The number and type of activities or the quantity and quality of staff are also used to assess the effectiveness of spending public funds and whether diplomats on foreign missions are effective for the national interest. All of this information is relevant to what operations can be planned, how they can be implemented, and how successful they may be. Other factors that influence overall cost and benefits include state visits, imports and exports, trade, income, production and population.

It is necessary to consider both costs and benefits when determining the success of an operation, especially in relation to balancing the pros and cons of policy options and objectives. Let’s imagine a diplomatic operation has two options.

Option A is low cost but will gain small results. Option B stipulates a higher cost but with far greater results. The latter is tempting for the forecasted, proportionally high results but may risk future operations by requiring a large number of resources upfront. However, by applying the correct usage of quantitative skills, cost analysis can additionally identify a third option, in this case, option C.

Option C includes activities of Option A, plus additional alternative activities made possible by the cost difference between options A and B.

The comparison is then not between Option A and Option B, but between Option B and C. The question in weighing each option remains the same: which use of resources will equate inadequate results? Is the operation doing all that it can to meet its demands and yield the right results? While the activities may have increased, the final option through the balanced use of cost analysis promotes a more well-rounded operation of opportunity.

This cost differential analysis has been applied to large-scale policy decisions, notably the alternatives of war (or force) and diplomacy. As Bueno de Mesquita explains in The War Trap:

“Leader expecting a larger net gain through diplomacy than through war...should rationally elect to pursue their goals through diplomatic bargaining and negotiating. This is true even if the expected gross gain from war is larger than the gross gain from diplomacy, provided that the cost differential is large enough (as it frequently is) to make the net effect of diplomacy preferable to war.”

Whether looking at operations or diplomacy overall, quantitative analysis can provide new perspectives to information we already had or assumed. The ability to perform cost and benefit analysis will not only prove useful for management purposes, but also reiterates the value of diplomacy over war.


Sources

Peter A.G. van Bergeijk. (2011, August 25). Economic Diplomacy Economic and Political Perspectives. The Economic effectiveness of diplomatic representation.  Retrieved from https://books.google.co.uk/books?id=zHl1LUZUcu0C&pg=PA103&lpg=PA103&dq=cost+and+benefit+for+diplomacy&source=bl&ots=NLhFgwZjtR&sig=UVxvIxEp-0KzGl2qqx2m8D7Xp_Q&hl=en&sa=X&ved=0ahUKEwi8x-LgwtDaAhVdOMAKHVYLA5gQ6AEIWDAG#v=onepage&q=cost%20and%20benefit&f=false

David A Baldwin. (2000, March 22). Success and Failure in Foreign policy. Retrieved from https://www.princeton.edu/~dbaldwin/selected%20articles/Baldwin%20(2000)%20Success%20and%20Failure%20in%20Foreign%20Policy.pdf

Witold J. Henisz. (2016, April 15). The Costs and Benefits of Calculating the Net Present Value of Corporate Diplomacy. Retrieved from  https://journals.openedition.org/factsreports/4109