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

188 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28 possibilities and might appropriate the funds for ‘the requisite investments. Beginning in the 1930’s in my country, and at other dates elsewhere this process has become increasingly formalized and bureaucratized. Now a project proposal must be accompanied by an elaborate dossier setting forth estimates of its various economic and non-economic consequences and purporting to justify it by appeal to objective criteria. If the American Congress or other local legislature doesn’t insist on such a formal justification the World Bank will. We have even extended the range of activities counted as government invest- ments. Expenditures on education, for example, are now fre- quently considered under that heading. It is therefore appropriate for us to consider the application of quantitative methods of economic analysis to the appraisal of proposed public investments. We shall assume throughout, as a background, a mixed economy, one in which the public and private sectors are both significant. The issue of public investment cannot arise, by definition, in a pure private eco- nomy, if theré is one anywhere in the world. It takes an ‘enti- rely different form and meaning in a pure public economy. Thus we shall assume a mixed economy, and though we shall concentrate on the public sector the private sector will always be visible in the background. The broad subject of government investment has already accumulated an imposing literature, which I shall not survey. Rather I shall advance a proposal concerning one central issue that the literature, as I know it, treats unduly lightly. The analysis of public investments is strongly analogous to the problem of capital budgeting in the context of a private firm. Both are motivated by the need for wise allocation of scarce resources, and similar conceptual issues arise in the two cases. In both cases the benefits promised by the project must be weighed against the costs it entails and competing projects laying claim to the same resources must be compared. But in the case of government undertakings both the benefits and the 3] Dorfman - pag. 2

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