Thresholds for Cost-Benefit Analysis

[petagny]

I've put together the attached note on international experience of thresholds for the application of cost-benefit analysis, i.e., the project values above which CBA becomes an obligatory requirement.

My inclination is to keep the value high, especially in countries where the necessary skills are in short supply: it's better to focus on getting the big decisions right than to set requirements that cannot be met.

It would be great to hear of any other examples that might be added to the note.

[PSCANDIZZO]

In Italy public law 144 approved in 1999 stated that for any public project with investment costs exceeding  10 million Euro the "ordinary" instrument of analysis was to be the feasibility study aand for projects exceeding 50 million euro it was mandatory to present a feasibility study with a full economic evaluation of the project. A series of interpretive secondary  norms, together with already established procedures, subsequently made clear that such an evaluation, although it could be extended to other forms of economic assessment , whould have to be based on cost benefit analysis.

[petagny]

Thanks for this information on practices in Italy. I shall add it to my note.

Personally, I favour relatively high thresholds like those adopted by Italy and Ireland. This makes sense for advanced countries, like these, but also for less advanced countries, where the necessary skills are in short supply.