Improving the Practice of Transport Project Appraisal
Cost-benefit analysis (CBA) is indispensable for making good decisions on what transport
projects to fund. It essentially aims to figure out which projects offer the best
value for money. However, the practical relevance of CBA does not always live up
to its appeal in principle. One problem is that there is sometimes disagreement over
what to include in CBA, both on the cost side and the benefits side of the analysis.
As a result, value for money is not always fully transparent. More politically, value
for money is only a partial criterion for decision-making, leading to disagreement
about the relative importance of the results from CBA compared to other inputs to
the decision-making process.
This report examines the extent to which these shortcomings can be addressed. In terms
of what to include in CBA, discussion focuses on equity and distributional impacts,
productivity effects, agglomeration benefits and external costs. The focus then turns
to how best to present guidance on project selection to decision makers. The report
includes papers on the way CBA is used in three countries – France, Mexico and the
United Kingdom – and how it is evolving in response to changing policy priorities.
Published on April 06, 2011Also available in: French
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