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Government Time Discounting and Required Rates of Return: UK History and Current Issues

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  • Michael Spackman

Abstract

The UK government first set financial objectives for the nationalised industries in 1961 and subsequently promoted the use of ‘discounted cash flow’ for investment appraisal. The nationalised industry regime evolved until, in the 1990s, it was succeeded by economic regulation regimes for the privatised utilities. Meanwhile discounting conventions emerged and have continued to evolve for wider government policy analysis, including aspects of climate change. Issues about the size and functions of public expenditure notwithstanding, UK government conventions are currently fairly uncontroversial: however, in the world at large, government discounting remains subject to many academic and international controversies and misunderstandings.

Suggested Citation

  • Michael Spackman, 2013. "Government Time Discounting and Required Rates of Return: UK History and Current Issues," Economic Affairs, Wiley Blackwell, vol. 33(2), pages 190-206, June.
    • Handle: RePEc:bla:ecaffa:v:33:y:2013:i:2:p:190-206
    DOI: 10.1111/ecaf.12013
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    References listed on IDEAS

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    Cited by:

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    3. Mark A. Moore & Anthony E. Boardman & Aidan R. Vining, 2020. "Social Discount Rates for Seventeen Latin American Countries: Theory and Parameter Estimation," Public Finance Review, , vol. 48(1), pages 43-71, January.
    4. Michael Spackman, 2017. "Social discounting: the SOC/STP divide," GRI Working Papers 182, Grantham Research Institute on Climate Change and the Environment.

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