Does Benefit-Cost Efficiency Influence Transport Investment Decisions?

Jonas Eliasson (), Maria Börjesson, James Odeck and Morten Welde

Journal of Transport Economics and Policy, 2015, vol. 49, issue 3, 377-396

Abstract: We explore how benefit-cost efficiency and electoral support affect road investment decisions in Sweden and Norway. In Norway, neither benefits nor costs seem to affect project selection. In Sweden, civil servants' decisions are strongly affected by projects' benefit-cost ratios, with a stronger effect for more expensive projects, while politicians' decisions are only weakly affected, and only for small projects. In both countries, governments tend to favour investments in regions where they enjoy strong local electoral support. Using cost efficiency as a final selection criterion seems to filter out many inefficient projects already at an early stage of the planning process. © 2015 LSE and the University of Bath

Date: 2015
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Working Paper: Does benefit/cost-efficiency influence transport investment decisions? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:tpe:jtecpo:v:49:y:2015:i:3:p:377-396

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