Cost benefit analysis, developing planning and the EU cohesion fund: learning from experience

Massimo Florio and Silvia Vignetti

Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano

Abstract: In this paper we consider the experience of transport and environmental evaluation in the framework of the Cohesion Fund, established by the EU in 1993 to co-finance through grants infrastructure projects in Spain, Portugal, Ireland and Greece, and more recently in the new Member States. We focus on the regulatory requirement to provide the Commission a cost-benefit analysis of the investment projects. We assess some recurrent conceptual issues in project appraisal for the Cohesion Fund. In particular we discuss typical omissions and errors we have observed in our reading of large samples of project applications and ex-post evaluations. We propose theoretically consistent and feasible solutions in the most critical areas for the CBA of Cohesion Funds projects: The choice of time horizon and the calculation of the residual value, the adoption of financial versus social discount rates, shadow pricing and the shadow wage, sensitivity and risk analysis

Keywords: Cost-benefit Analysis; Transport; Environment; Cohesion Fund; EU Regional Policy (search for similar items in EconPapers)
JEL-codes: H43 O22 R42 (search for similar items in EconPapers)
Date: 2004-01-01
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:mil:wpdepa:2004-31

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