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Cost-benefit analysis of infrastructure projects in an enlarged European Union: an incentive-oriented approach

Author

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  • Massimo FLORIO
  • Silvia VIGNETTI

Abstract

The purpose of the paper is to analyse some results of cost-benefit analysis in a sample of ISPA (Structural Instrument for pre-accession countries) projects. The focus is particularly on the variability of financial and economic rates of return and how to integrate this information in the EU co-financing mechanism. We investigate, through the analysis of variance of co-financing rate, to which extent variability of rates is due to structural characteristics (sectors, countries) or to the existence of a residual variance due both to specificity of the project and discretional element of the appraisal method, which may constitute an information noise. We find that the variance of co-financing rate across countries is poorly explained by different composition of sectors of investment. This suggests the need to reinforce a more consistent approach to evaluation and co-financing. We suggest some possible solutions.

Suggested Citation

  • Massimo FLORIO & Silvia VIGNETTI, 2003. "Cost-benefit analysis of infrastructure projects in an enlarged European Union: an incentive-oriented approach," Departmental Working Papers 2003-013, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    • Handle: RePEc:mil:wpdepa:2003-013
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    More about this item

    Keywords

    Cost-benefit analysis; Project Evaluation; Structural Funds; European Regional Policy;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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