Final answer:
Risk management programs should operate economically and efficiently, employing cost-benefit analysis to ensure the benefits justify the costs. Evaluation efforts should match program complexity and performance measurement systems are vital for maintaining efficiency.
Step-by-step explanation:
Risk management programs should operate economically and efficiently, which means they should not incur substantial costs for slight benefits. Effective risk management involves careful consideration of costs and benefits to ensure resources are utilized wisely.
Cost-benefit analysis is a primary tool used in this process, comparing the additional costs and benefits incurred by adding an extra unit of the program. It's important to remember that the evaluation effort required should match the program's complexity, length, and cost. For instance, simple programs require simpler evaluations, while longer and more expensive programs may justify more elaborate evaluations.
Programs that demonstrate benefits greater than their costs should be prioritized for implementation and benchmarking is often used to compare the costs of these programs effectively. Program management and performance measurement systems are crucial to maintaining efficiency, especially in public bureaucratic organizations, where the motivation for efficiency might be less apparent due to different incentives compared to the private sector.