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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Chapter

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

SEMAINE D'ÉTUDE SUR LE ROLE DE L’ ANALYSE ECONOMETRIOUE ETC. 21 that the procedures you outline relate essentially to all types of government investments. By that I mean those government invest- ments where there is essentially a monopoly, on the one hand, and no private individual is engaged in such activities — in most eco- nomies — building roads or schools. The questions that I wish to bring up with respect to technique relate to those cases in which the government output is to a degree comparable to private output — public or private electric power and relative to other forms of energy such as natural gas. And the two points are these: first, though it is true that in making its investments a private firm includes only those returns which it can capture, many of the kinds of returns that come from government investments of the external or social sort where the social and private return diverge, will also exist in the case of pri- vate investment. That is, for example, when General Motors builds an assembly plant, there are substantial social gains to the particular community involved — higher property values, various increases for certain other services and so on. And it seems to me that the procedure that you outlined tends to ignore these retums in the case of the private investment and where there is competition between the public and the private sector not really take them into account in comparing private and government investments [f this is true, there is a bias in favour of government investments. The second point is really along the same lines and this is the question, of how one again creates a real competition between the public and private output, whether it is direct, as in electric power or somewhat indirect, as between electric power and natural gas How are the taxes paid by the private sector included in the ana lysis? In some industries, such taxes may amount to a significant fraction of the total value of the output, and here again it seems to me that this is not taken into account, and you again bias the decisions in favour of the government’s investments Dorfman - pag. 25

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