Does benefit/cost-efficiency influence transport investment decisions?
AbstractWe explore how benefit-cost efficiency and electoral support affect road investment decisions in Sweden and Norway. In Norway, neither benefits nor costs seem to affect project selection. In Sweden, civil servants’ decisions are strongly affected by projects’ benefit-cost ratios, with a stronger effect for more expensive projects, while politicians’ decisions are only weakly affected, and only for small projects. In both countries, governments tend to favour investments in regions where they enjoy strong local electoral support. Using cost efficiency as a final selection criterion seems to filter out many inefficient projects already at an early stage of the planning process. We argue that even if political decisionmakers are apparently mostly governed by other concerns than cost efficiency, civil servants at the administrations should not shy away from preparing efficient project suggestions for decisionmakers to choose from.
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Bibliographic InfoPaper provided by CTS - Centre for Transport Studies Stockholm (KTH and VTI) in its series Working papers in Transport Economics with number 2014:6.
Length: 19 pages
Date of creation: 01 Apr 2014
Date of revision:
Contact details of provider:
Postal: Centrum för Transportstudier (CTS), Teknikringen 10, 100 44 Stockholm, Sweden
Web page: http://www.kth.se/abe/om_skolan/organisation/centra/cts
Cost benefit analysis; Project appraisal; Public decision making; Transport investments;
Find related papers by JEL classification:
- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
- R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-04-11 (All new papers)
- NEP-CDM-2014-04-11 (Collective Decision-Making)
- NEP-EUR-2014-04-11 (Microeconomic European Issues)
- NEP-GER-2014-04-11 (German Papers)
- NEP-POL-2014-04-11 (Positive Political Economics)
- NEP-REG-2014-04-11 (Regulation)
- NEP-TRE-2014-04-11 (Transport Economics)
- NEP-URE-2014-04-11 (Urban & Real Estate Economics)
You can help add them by filling out this form.
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