1st Edition

Cost-Benefit Analysis of Multi-Level Government
The Case of EU Cohesion Policy and of US Federal Investment Policies

ISBN 9780415568210
Published April 12, 2010 by Routledge
352 Pages

USD $170.00

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Book Description

This book provides an original theoretical framework for assessing public investment policies co-financed by Union (Federal) governments. This framework is applied to two important case studies: the EU Cohesion Policy and the US Federal Investment Policies.

Cost-Benefit Analysis of Multi-Level Government sheds light on a number of outstanding issues of economic theory by extending the theory of shadow prices, and provides guidance to real-world decision makers. In particular, the following questions are addressed:

  • In which circumstances is intervention by higher level government in Member States through investment policies justified?

  • Is there a welfare economics rationale to underpin interregional equity? What is the relationship between interregional and interpersonal income distribution? How can social exclusion be included in cost-benefit tests?

  • How can a higher level of government allocate financial resources to investment policies before it bargains over the related programming documents with lower levels of government?

  • In these circumstances, how can optimal matching rates be derived under binding or non binding budgetary constraints?

  • How can such an analytical framework provide guidance for real-world decision makers?

Guidelines such as the Impact Assessment Guidelines (European Commission), the Green Book (British Treasury), and Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs (Executive Office of the US President) are also analyzed.

The book will be of interest to policy makers, postgraduate students and researchers in cost-benefit analysis, welfare economics, public choice, public finance, multi-level government economics, and income distribution issues.

Table of Contents

Part 1: Introduction 1. The Economic Theory of Shadow Pricing Part 2: Case Studies 2. The Cohesion Policy of the European Union 3. The Federal Investment Policies of the United States of America Part 3: The New Theoretical Framework 4. The Case for EU Intervention: Discussion 5. The Case for EU Intervention: Formalisation 6. The Impact of EU Intervention 7. Welfare Weights 8. Social Discount Rates 9. Shadow Wage Rates Part 4: Theoretical Insights and Policy Implications 10. Theoretical Insights and Extensions 11. Insights and Methodological Directions for the Case Studies

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Dr Alessandro Ferrara gained his PhD in Economics at the Department of Economics and Related Studies, University of York, UK. After having been responsible for cost-benefit analysis at the Evaluation Unit, Directorate General Regional Policy, European Commission, he is currently working as a specialist in economic modelling at the Unit of Economic and Quantitative Analysis, Additionality of the same Directorate General.