Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/163080
Authors: 
Bell, Clive
Year of Publication: 
2017
Series/Report no.: 
WIDER Working Paper 2017/111
Abstract: 
This paper makes the case for the systematic appraisal of public sector projects using shadow prices as the signals of social scarcities. In so doing, it attempts to redress the balance between estimating inputs and outputs, central though that task is, and valuing them correctly. The account of how to estimate shadow prices for this purpose pays particular attention to the social discount rate and how to treat uncertainty at both the project and economy-wide levels. There follows an illustration of the ideas and apparatus in practice using an evaluation of India's large rural roads programme (PMGSY) in connection with a World Bank loan. A discussion of the more general uses of shadow prices in evaluating decisions in the public sector is complemented by a series of proposals for the implementation of systematic procedures for project appraisal in government and international donors.
Subjects: 
cost-benefit analysis
shadow prices
uncertainty
JEL: 
D61
D81
H43
O22
ISBN: 
978-92-9256-335-6
Document Type: 
Working Paper

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