PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28 
DORFMAN 
Professor KooPMANS has asked a very searching question deal- 
ing with a very central issue. I should like to try to respond to it 
in two stages. First, it seems to be essential that there should be 
some rate of discount to be used in comparing results that mature at 
different times, If there is none, inconsistencies will certainly creep 
into the governments’ investment program. Different and conflict- 
ing choices will be made in designing different projects and projects 
mn different sectors of the economy. In some cases substantial 
resources will be expended to secure early accrual of benefits, and 
in others, the opposite choice will be made. The wastes resulting 
from such discrepancies can be avoided only by applying a uniform 
rate of time preference to all projects. I believe that Professor 
Koopmans would subscribe to that, but then he asks where are the 
necessary rates of time preference to come from. The second part 
of my response deals with that issue, 
In some project planning, in the United States, for example, an 
explicitly formulated rate of time preference is incorporated. More 
usually there is no explicit rate, but if one reviews the choices 
made in the project design, often an implicit rate can be discovered. 
The annals of project design and of legislative debate of projects 
submitted to legislatures should, I am conjecturing, disclose what 
these implicit rates of time discount are. I do not believe that there 
is any economic market from whose behavior the social rates of 
:ime preference can be ascertained. As a substitute for such a mar- 
ket, I suggest that we review from this point of view the behavior 
of governments, and particularly of their legislative branches. 
VIAHALANOBIS 
I should agree with Professor Koopmans on technical points 
which I may briefly mention; but I have got some points of a very 
different nature. On p. 4, education has been given as a leading 
31 Dorfman - pag. 28