Cost-benefit analysis of infrastructure projects in an enlarged European Union: an incentive-oriented approach.
May 2003
Draft-comments are welcome
Keywords: Cost-benefit analysis, Project Evaluation, Structural Funds, European Regional Policy
JEL Numbers: D61, H43, R58
ABSTRACT
The purpose of the paper is to analyse some results of cost-benefit analysis in a sample of ISPA (Structural Instrument for pre-accession countries) projects. The focus is particularly on the variability of financial and economic rates of return and how to integrate this information in the EU co-financing mechanism. We investigate, through the analysis of variance of co-financing rate, to which extent variability of rates is due to structural characteristics (sectors, countries) or to the existence of a residual variance due both to specificity of the project and discretional element of the appraisal method, which may constitute an information noise. We find that the variance of co-financing rate across countries is poorly explained by different composition of sectors of investment. This suggests the need to reinforce a more consistent approach to evaluation and co-financing. We suggest some possible solutions.
ACKNOWLEDGEMENTS
The authors are particularly grateful for lively discussions with A.Bougas, A. Mairate, J.C. Blain, Evaluation Unit, DG Regional Policy, European Commission. However any view expressed here is the sole responsibility of the authors and do not involve the EC or any other third party. A previous related paper has been presented at the conference 'Evaluation and EU Regional Policy: New Questions and New Challenges', Aix-en-Provence, France 31st May and 1st June 2002.
INTRODUCTION
With the new programming period 2000-20 ...