Book contents
- Frontmatter
- Contents
- List of figures
- List of economic models and tables
- Preface
- Part I: Introduction to welfare economics
- Part II: Project and policy appraisal in developing countries
- 5 Project appraisal: an overview
- 6 Shadow prices for traded and non-traded commodities in an open economy
- 7 Trade policy, exchange rates and structural adjustment
- 8 Labour markets in developing countries
- 9 The social value of labour
- 10 Intertemporal costs and benefits (1): a market-based approach
- 11 Intertemporal costs and benefits (2): a social planning approach
- Part III: Missing markets
- Retrospect
- Bibliography
- Index
5 - Project appraisal: an overview
Published online by Cambridge University Press: 22 October 2009
- Frontmatter
- Contents
- List of figures
- List of economic models and tables
- Preface
- Part I: Introduction to welfare economics
- Part II: Project and policy appraisal in developing countries
- 5 Project appraisal: an overview
- 6 Shadow prices for traded and non-traded commodities in an open economy
- 7 Trade policy, exchange rates and structural adjustment
- 8 Labour markets in developing countries
- 9 The social value of labour
- 10 Intertemporal costs and benefits (1): a market-based approach
- 11 Intertemporal costs and benefits (2): a social planning approach
- Part III: Missing markets
- Retrospect
- Bibliography
- Index
Summary
In part I of this book we considered ways of measuring improvements in social welfare brought about by increases in the quantity of goods and services available for consumption. Much of the analysis was concerned with the responses of producers and consumers to the price changes caused by perturbations in the economic system. Not much attention was paid, however, to the source of these perturbations. In part II, we alter the focus of our discussion and ask what projects should be undertaken and, specifically, what criteria should be used to determine whether the introduction of a particular project or policy will be welfare improving. The analysis will be conducted within the same framework as that of part I: we shall continue to assume that individual consumers and private sector producers respond in an optimising manner to changes in the economic environment and, where appropriate, we shall use a general equilibrium framework for our analysis. We shall also continue to assume that an improvement in economic welfare can be identified with an increase in social welfare, defined in terms of the utility of the individuals who make up society.
This overview chapter opens with a short description in section 5.1 of the background to the theory and practice of project appraisal in developing countries. This topic is related in section 5.2 to the general discussion of welfare economics in part I of the book; the distinction between private and social approaches to investment appraisal is discussed in section 5.3 and in section 5.4 the concepts of shadow prices and government control variables are introduced.
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- Publisher: Cambridge University PressPrint publication year: 1996