Cost-Benefit Analysis in Developing Countries: What’s Different?
AbstractThere are both similarities and differences between conducting cost-benefit analysis in developed and developing countries . While the fundamental principles and theory underlying cost-benefit analysis maybe the same , the methodologies and the estimation techniques that are most appropriate in each context may substantially differ . The incompleteness and deficiencies of the labour , goods, and financial markets in developing economies may render revealed preference approaches to valuation unsuitable and inferior to stated preference models . But yet , even stated preference models are difficult to operationalize in developing countries where the literacy rates may not be too encouraging to allow for complete understanding of such valuation methods . It is largely because of the latter’s complexity that the paper here suggests the newer method of adapting to the damage schedules approach to yield meaningful and more straightforward valuation of non-market goods and services . Understanding the differences in applying cost-benefit analysis to developed and developing countries will go a long way to helping policy makers make informed decisions.
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Bibliographic InfoPaper provided by Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre in its series Economic Growth centre Working Paper Series with number 1205.
Length: 14 pages
Date of creation: May 2012
Date of revision:
Cost- benefit analysis; public project evaluation; policy economics; valuation methods; reviewed preference; related preference;
Find related papers by JEL classification:
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
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