Discounting future flows is a critical step in Cost Benefit or Cost Effectiveness. Many institutions still use relatively high discount rates, which might not be applicable to projects where benefits-or costs- will happen way in the future in a world of rapidly declining cost of capital. Is it time to reconsider discount rates estimates for development projects, particularly in … [Read more...] about In the long run we are all dead
Cost Benefit
White elephants
John Kay’s column in the Financial Times is always an interesting read. In one of his last columns (ungated here) he pungently questioned the pertinence and value of Cost Benefit Analysis. His point: if the London sewerage system had been subject to present-day Cost Benefit rules it would never had been built. The Thames would still be a fetid cesspool and leisure walkers, … [Read more...] about White elephants
The cost of inaction
I just finished reading The Cost of Inaction, Case Studies from Rwanda and Angola by Sudhir Anand and others. T he Foreword, by Amartya Sen, is worth the whole price-tag. According to Professor Sen this is a far-reaching book that goes well beyond the two case studies and its “modest title” and provides a good occasion to think about some foundational issues in the … [Read more...] about The cost of inaction
The best investment
A few weeks ago, we published a short blog on the critical importance of early childhood development. A recent paper by James Heckman and Gabriella Conti explores the economics of child well-being that: … [Read more...] about The best investment
The best investment
A few weeks ago, we published a short blog on the critical importance of early childhood development. A recent paper by James Heckman and Gabriella Conti explores the economics of child well-being that: … [Read more...] about The best investment