Hostname: page-component-78c5997874-8bhkd Total loading time: 0 Render date: 2024-11-05T06:19:32.687Z Has data issue: false hasContentIssue false
  • English
  • Français

Cost-Benefit Analysis and the Control of Public Expenditure: An Assessment of British Experience in the 1980s

Published online by Cambridge University Press:  28 November 2008

Massimo Florio
Massimo Florio
Affiliation:
Economics, University of Urbino
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper examines approaches to public investment appraisal as theyare currently recommended in the British Treasury and implemented byevaluation units within the Department of Health, Department of Transport and the Home Office. The evidence suggests that spending departments have reacted to the pressure for increased selectivity in their expenditures by adopting a heterogeneous blend of appraisal techniques, including financial analysis, cost-effectiveness and option appraisal, withcost-benefit analysis eventually playing a minor role. The imposition of cash limits rations capital expenditures. When these constraints bite departments differently, either a unique social discount rate for projectappraisal is inappropriate or the rations themselves are giving wrong signals to the departments The departments do not have an incentive todevote time and effort to cost benefit analysis and other techniques of a more limited scope are implemented.

Type
Articles
Information
Journal of Public Policy , Volume 10 , Issue 2 , April 1990 , pp. 103 - 131
Copyright
Copyright © Cambridge University Press 1990

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

BIBLIOGRAPHY

Arrow, K. S. and Raynaud, M. (1986) Social Choice and Multicriterion Decision-making. MIT Press, Cambridge, Mass.Google Scholar
Bridges, G. A. and Winpenny, J. T. (1983) Planning Development Projects. HMSO, London.Google Scholar
Bristow, J. and McDonagh, j. (eds.) Public expenditure-the key issue. Institute of Public Administration, Dublin.Google Scholar
Burrows, J. and Tarling, R. (1982) Clearing up Crime. Home Office Research Study, London.Google Scholar
Carr-Hill, R. A. and Stern, N. H. (1979) Crime, the police, and criminal statistics. Academic Press, London.Google Scholar
Cmnd 7131. (1978). The Nationalized Industries. London.Google Scholar
Cockle, P. (ed.). (1984). Public Expenditure Polity 1984–85. Macmillan, London.Google Scholar
Cockle, P. (ed.). (1985). Public Expenditure Policy 1985-86. Macmillan, London.Google Scholar
Committee of Public Accounts. The use of investment appraisal in straightforward spending decisions by government departments. House of Commons, Session 1981–1982.Google Scholar
Cromien, S. and Pender, A. (eds.) (1987). Managing Public Money. Institute of Public Administration,Dublin.Google Scholar
Department of Health and Social Security (1987). Health Buildings schemes. Approval in Principle, AIP bulletin 1, London.Google Scholar
Department of Health and Social Security (1987). Option Appraisal. A guide for the National Health Service', HMSO, London.Google Scholar
Department of Health and Social Securi, CAPRICODEty (1986). Health Buildings procedure. HMSO.Google Scholar
Department of Transport (1981). COBA 9 Manual. London.Google Scholar
Department of Transport (1984). Getting the best Roads for our money. The TAM traffic appraisal, London.Google Scholar
Department of Transport (1984). National Road Traffic Forecasts, London.Google Scholar
Department of Transport (1983) Getting the best Roads for our money. The COBA method of appraisal, London.Google Scholar
Department of Transport (1987) Manual of Environmental Appraisal. London.Google Scholar
Department of Transport (1982) QUADRO 2 Manual, London.Google Scholar
Department of Transport (1980) Traffic Appraisal Manual, London.Google Scholar
Department of Transport (1987) Values for journey time savings and accident prevention, London.Google Scholar
Despontin, N.Nijkamp, P. and Spronk, J. (eds.) (1984) Macroeconomic Planning with conflicting Goals. Springer, Berlin.CrossRefGoogle Scholar
Drèze, J. and Stern, N. (1987) The theory of Cost Benefit Analysis. Handbook of Public Economics. vol. II, eds. Auerbach, J. and Feldstein, M., Elsevier, Amsterdam.Google Scholar
Drummond, M. F. (1980). Economic Appraisal in Health Care. Oxford University Press.Google Scholar
Fandel, G. and Spronk, J. (eds.) (1985). Multiple criteria decision methods and applications. Springer, Berlin.Google Scholar
Florio, M. (1989a). Cost benefit analysis under a regime of cash limits: UK in the '80s, TIDI Discussion Paper, no. 134, ST/ICERD, London School of Economics.Google Scholar
Florio, M. (1989b). Investment appraisal in the public sector: the experience in the USA federal and local government. Mimeo, Washington D.C.Google Scholar
Florio, M. (1990). Cost benefit analysis and macroeconomic policy objectives: Lessons from experience (in French; English version available), in Annals of Public and Cooperative Economics, January.Google Scholar
Glaister, S. (1981). Fundamentals of Transport Economics. Basil Blackwell, Oxford.Google Scholar
HM Treasury (1979). The test discount rate and the required rate of return on investment. Government Economic Service, Working Paper n. 22, London.Google Scholar
HM Treasury (1983). Investment appraisal in the public sector: a management guide for Government departments, London.Google Scholar
HM Treasury (1984a). Investment appraisal in the public sector: a technical guide for Government departments, London.Google Scholar
HM Treasury (1984b). Investment appraisal in the public sector. Supplementary note 2. Further guidance on the appraisal of Public Purchasing decisions, London.Google Scholar
HM Treasury (1987) Government Purchasing. Progress report to the Prime Minister from the Central Unit on Purchasing. HMSO, London.Google Scholar
HM Treasury (1987). The Government's Expenditure Plans 1987–1988 to 1989–1990. HMSO, London.Google Scholar
HM Treasury (1988). Autumn statement 1988, HMSO, London.Google Scholar
HM Treasury (1988). Policy evaluation: a guide for managers. HMSO, London.Google Scholar
HM Treasury (1988). The Government's Expenditure Plans 1988–1989 to 1990–1991. HMSO, London.Google Scholar
HM Treasury (1989). The Government's Expenditure Plans 1989–1990 to 1991–1992. Ch. 21 –supplementary analysis and index, HMSO.Google Scholar
Home Office (1986). Magistrates Courts and Probation Office Buildings. revised procedures. London.Google Scholar
Home Office (1986). Police buildings, revised procedures. HOMC 74/86, London.Google Scholar
Jackson, P. (ed.) (1985). Implementing Government Policy Initiatives: the Thatcher administration Royal Institute of Public Administration, London.Google Scholar
Jowett, P. and Rothwell, M. (1988) Performance indicators in tht public sector. Macmillan, London.Google Scholar
Joyce, M. A. S. and Levitt, M. S. (1987). The growth and efficiency of public spending. NIESR Occasional Papers. Cambridge University Press, Cambridge.Google Scholar
Little, I. and Mirrlees, j. (1984). Project appraisal and planning for developing countries. Heineman, London.Google Scholar
O'Donnell, A. T. and Rhodes, T. E. (1983). Risk uncertainty and Public Sector Investment. Government Economic Service Working Paper, n. 63, HM Treasury.Google Scholar
OECD (1988). OECD Economic Survey: United Kingdom. Paris.Google Scholar
Overseas Development Administration. (1972). A guide to project appraisal in developing countries. HMSO, London: revised (1988).Google Scholar
Pliatzky, L. (1985). Paying and Choosing. Basil Blackwell, London.Google Scholar
Pyle, D. J. (1983) The Economics of Crime and Law Enforcement. Macmillan, London.CrossRefGoogle Scholar
Walshe, G. (1988) Planning Public Spending in the U.K. Macmillan, London.Google Scholar
Weinstein, M. and Zeckhauser, R. (1973). Critical ratios and efficient allocation. Journal of Public Economics, n. 2.Google Scholar
Willis, K. G. (1983) Spatial variations in crime in England and Wales, testing an economic model. Regional Studies, n. 4.Google Scholar