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Cost-benefit analysis and EU cohesion policy

Author

Listed:
  • Andrea MAIRATE

  • Francesco ANGELINI

Abstract

In the context of scarce EU budgetary resources and strained public finances, cost-benefit analysis (CBA) plays a crucial role in assisting policymakers’ public investment decisions. The purpose of this paper is to draw lessons from the CBA experience under the Structural and Cohesion Funds to date. The paper reviews the main developments over the last decade, highlighting the role played by the Commission in helping foster a sound project appraisal culture in the member states. It also points out the relevance of CBA in assisting the allocation of EU funds across projects. Particularly, it is shown how the new method that will be used to determine the level of Community assistance should prevent the crowding out of other sources of finance by increasing the leverage effect and creating incentives for attracting private capital. Finally, the paper will discuss the main policy implications in terms of affordability and sustainability issues.

Suggested Citation

  • Andrea MAIRATE & Francesco ANGELINI, 2006. "Cost-benefit analysis and EU cohesion policy," Departmental Working Papers 2006-34, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    • Handle: RePEc:mil:wpdepa:2006-34
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    File URL: http://wp.demm.unimi.it/files/wp/2006/DEMM-2006_034wp.pdf
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    References listed on IDEAS

    as
    1. Massimo Florio, 2006. "Cost-benefit analysis and the European union cohesion fund: On the social cost of capital and labour," Regional Studies, Taylor & Francis Journals, vol. 40(2), pages 211-224.
    2. Pearce, David, 1998. "Cost-Benefit Analysis and Environmental Policy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 14(4), pages 84-100, Winter.
    3. Andrea MAIRATE, 2006. "Does cohesion help economic growth?," Departmental Working Papers 2006-06, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    4. Massimo FLORIO & Silvia VIGNETTI, 2003. "Cost-benefit analysis of infrastructure projects in an enlarged European Union: an incentive-oriented approach," Departmental Working Papers 2003-13, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    5. Paul A. Grout, 2005. "Value-for-money measurement in public-private partnerships," EIB Papers 7/2005, European Investment Bank, Economics Department.
    6. Mr. Etienne B Yehoue & Miss Mona Hammami & Jean-François Ruhashyankiko, 2006. "Determinants of Public-Private Partnerships in Infrastructure," IMF Working Papers 2006/099, International Monetary Fund.
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    Cited by:

    1. Massimo Florio & Silvia Vignetti, 2008. "Building a bridge across CBA traditions: the contribution of EU Regional Policy," Working Papers 200908, CSIL Centre for Industrial Studies.

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    More about this item

    Keywords

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    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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