Discount Rates for Economic Appraisal of Public Sector Expenditures

Glenn Jenkins ()

Development Discussion Papers from JDI Executive Programs

Abstract: The question of what is the appropriate discount rate to employ in public sector investment appraisal has been the subject of a theoretical debate in the economics literature for over a decade. In recent years, however, most of the points of disagreement in the theory have become better understood and hence a large degree of reconciliation has taken place. Central to this controversy was whether the appropriate parameter to use as the social discount rate should be the social value of the marginal product of investment in the private sector, the social rate of time preference or the social opportunity cost of capital. This paper presents the different arguments on the Discount Rates for Economic Appraisal of Public Sector Expenditures.

Keywords: Discount rates; economic appraisal; expenditure; public sector (search for similar items in EconPapers)
JEL-codes: H43 (search for similar items in EconPapers)
Pages: 8 Pages
Date: 1980
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Citations: View citations in EconPapers (2)

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