Study week on the econometric approach to development planning

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Monograph

Identifikator:: 1824422792

URN:: urn:nbn:de:zbw-retromon-217476

Document type:: Monograph

Title:: Study week on the econometric approach to development planning

Place of publication:: Amsterdam [u.a.]

Publisher:: North-Holland Publ. Co. [u.a.]

Year of publication:: 1965

Scope:: XLVII, 1259 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Econometric analysis for assessing the efficacy of public investment / R. Dorman, Harvard University - Cambridge, Mass. - U.S.A.

Collection:: Economics Books

PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28 to increase the income of some impoverished group by $.75. In that case, income to the group to be favored would receive a shadow price of $1.33. This proposal may seem visionary, but it contains the es- sence of all the proposals I am about to make, and, in fact, expresses a kind of comparison that is ineluctable and is made every day. For this reason it may not be as impracticable as it seems at first blush. Since these decisions are made fre- quently, a study of administrative or legislative records should disclose bounds, at least, on these shadow prices by showing the rates of trade-off between different objectives on projects. that are accepted and rejected. Such a study would have to assume that the shadow prices remain stable for reasonable periods. Perhaps they do, but perhaps also they change with changes in the political and economic climate. There is another difficulty, too, for this line of empirical research. Though in every project plan, choices of the sort at issue have to be made somewhere along the line, the form of benefit-cost analysis rather obscures them. As I mentioned,’two or three variants. of a project at best are submitted for decision by responsible authorities. These tend to differ in many dimensions, and the amount of trade-off between different objectives is not likely to be brought out very clearly. If variant A of a flood-control project provides more protection to property than variant B, it may also cost more, provide less protection to life, and provide better by-products in the form of recreational facilities but less hydro-electric power. Knowing that the legislature has preferred variant A tells little about the shadow prices; though more may be disclosed by inspecting the record of the debate. I emphasize this difficulty because it suggests that the entire process of generating a benefit-cost analysis which TI sketched above — the sharp distinction between the spheres of the engineer and the economist, the small number of variants produced — may be unsuitable for analyses of public invest- '31 Dorfman - pag. Q

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