The Normative Implications of Political Decision-Making for Benefit-Cost Analysis
The Potential Pareto criterion, or Kaldor-Hicks standard, presumes that costs are not fully compensated. Yet, uncompensated costs can incentivize costly political activity and create uncertainty about political outcomes. These consequences are not reckoned in the standard benefit-cost analysis. This study models political costs and uncertainty as a function of project parameters and political-institutional characteristics. The economic consequences of political behavior are then incorporated into an adjusted project evaluation standard. This standard assures that the project’s conventionally measured net benefits are sufficient to cover political costs and uncertainty about the decision-making outcome.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 3 (2012)
Issue (Month): 2 (May)
|Contact details of provider:|| Web page: https://www.degruyter.com|
|Order Information:||Web: https://www.degruyter.com/view/j/jbca|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daniel H. Cole & Peter Z. Grossman, 2002. "The Meaning of Property Rights: Law versus Economics?," Land Economics, University of Wisconsin Press, vol. 78(3), pages 317-330.
- Sterner, Thomas & Hoglund Isaksson, Lena, 2006. "Refunded emission payments theory, distribution of costs, and Swedish experience of NOx abatement," Ecological Economics, Elsevier, vol. 57(1), pages 93-106, April.
- Hamilton, Jonathan H. & Slutsky, Steven M., 1990.
"Endogenous timing in duopoly games: Stackelberg or cournot equilibria,"
Games and Economic Behavior,
Elsevier, vol. 2(1), pages 29-46, March.
- Hamilton, J.H. & Slutsky, S.M., 1988. "Endogenous Timing In Duopoly Games: Stackelberg Or Cournot Equilibria," Papers 88-4, Florida - College of Business Administration.
- J. Amegashie, 2006. "A contest success function with a tractable noise parameter," Public Choice, Springer, vol. 126(1), pages 135-144, January.
- John Pezzey, 2003.
"Emission Taxes and Tradeable Permits A Comparison of Views on Long-Run Efficiency,"
Environmental & Resource Economics,
Springer;European Association of Environmental and Resource Economists, vol. 26(2), pages 329-342, October.
- John C. V. Pezzey, 2002. "EmissionTaxes and Tradable Permits: A Comparison of views on Long Run Efficiency," Economics and Environment Network Working Papers 0210, Australian National University, Economics and Environment Network.
- Pezzey, John C.V., 2003. "Emission Taxes and Tradable Permits: A Comparison of Views on Long Run Efficiency," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 58198, Australian Agricultural and Resource Economics Society.
- Krueger, Anne O, 1990.
"Government Failures in Development,"
Journal of Economic Perspectives,
American Economic Association, vol. 4(3), pages 9-23, Summer.
- Skaperdas, Stergios, 1996.
"Contest Success Functions,"
Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 283-290, February.
- John W. Maxwell & Thomas P Lyon & Steven C.. Hackett, 1995.
"Self-Regulation and Social Welfare: The Political Economy of Corporate Environmentalism,"
University of Chicago - George G. Stigler Center for Study of Economy and State
122, Chicago - Center for Study of Economy and State.
- Maxwell, John W & Lyon, Thomas P & Hackett, Steven C, 2000. "Self-Regulation and Social Welfare: The Political Economy of Corporate Environmentalism," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 583-617, October.
- Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-1196, September.
- Bonnie G. Colby, 1990. "Transactions Costs and Efficiency in Western Water Allocation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(5), pages 1184-1192.
- Bev Dahlby, 2008. "The Marginal Cost of Public Funds: Theory and Applications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262042509.
- Parry, Ian W. H. & Williams III, Roberton C., 1999. "A second-best evaluation of eight policy instruments to reduce carbon emissions," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 347-373, August.
- Farrow, Scott, 1995. "The dual political economy of taxes and tradable permits," Economics Letters, Elsevier, vol. 49(2), pages 217-220, August.
- Bonnie G. Colby, 2000. "Cap-and-Trade Policy Challenges: A Tale of Three Markets," Land Economics, University of Wisconsin Press, vol. 76(4), pages 638-658.
- Nitzan, Shmuel, 1994. "Modelling rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 10(1), pages 41-60, May.
- Per Fredriksson, 2000. "The Siting of Hazardous Waste Facilities in Federal Systems: The Political Economy of NIMBY," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 15(1), pages 75-87, January.
- Dallas Burtraw & Karen Palmer, 2008. "Compensation rules for climate policy in the electricity sector," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(4), pages 819-847.
- Kerry Krutilla, 2005. "Using the Kaldor-Hicks tableau format for cost-benefit analysis and policy evaluation," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 24(4), pages 864-875.
- Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
- Cooter, Robert D & Rubinfeld, Daniel L, 1989. "Economic Analysis of Legal Disputes and Their Resolution," Journal of Economic Literature, American Economic Association, vol. 27(3), pages 1067-1097, September.
When requesting a correction, please mention this item's handle: RePEc:bpj:jbcacn:v:3:y:2012:i:2:n:2. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.