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

92 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28 also constrained to take account of the effects. of investments on the- foreign balance of the nation, and, indeed, the general budgetary position. If financing the project will lead to a more inflationary (or less deflationary) budget, these are external consequences that must be taken into account. Furthermore, there is the problem of the « social rate of discount », an issue [ intend to avoid as much as possible. If the social rate of discount differs from the market rate, then the social value of investments that will be displaced by the government invest- ment will be different from the market value. In this cir- cumstance, the appraiser of a government investment is con- fronted by the problems of estimating how much private invest- ment the project will displace, if any, and of evaluating the social value of this displaced investment. In short, even when it comes to costs, the usual accountants’ and engineers’ estim- ates are likely to be unsuitable for economic analysis. Never- theless, we shall concentrate on the problems posed by benefit evaluation, though some of. the more important problems on the cost side will force themselves upon ,us. The essential problem on the benefit side is that the benefits expected to flow from a public investment tend to be diverse, non-monetary, ‘ incommensurable, and difficult to measure in any units. Several expedients for meeting this problem are available or conceivable. The only one much used in practice has come to be called « benefit-cost analysis », though, as we shall see, it hardly deserves this proud name. The first step in this procedure is to have engineers prepare preliminary designs for the physical facilities and to estimate the costs of construction and the outputs and other physical characteristics of the system. Frequently the engineers will submit two or three alternative designs. The economic analysis, which fol- lows, concentrates in the first instance on the monetary results of those designs. It consists essentially in placing values upon those physical outputs of the system that either have market prices or to which monetary values can be imputed readily. 3] Dorfman - pag. 6

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