Does Benefit-Cost Efficiency Influence Transport Investment Decisions?

We explore how benefit-cost efficiency and electoral support affect road investment decisions in Sweden and Norway. In Norway, neither benefits nor costs seem to affect project selection. In Sweden, civil servants' decisions are strongly affected by projects' benefit-cost ratios, with a st...

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Bibliographic Details
Published in:Journal of transport economics and policy 2015, Vol.49 (3), p.377-396
Main Authors: Eliasson, Jonas, Börjesson, Maria, Odeck, James, Welde, Morten
Format: Article
Language:English
Subjects:
02 Road: Economics
Cost benefit analysis
Cost efficiency
Decision process
Efficiency decisions
Financial investments
Government
Government (national)
Investment decisions
Investment plans
Investment policy
National government
Norway
Policy
Public administration
Public investments
Sweden
Transport infrastructure
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Summary:We explore how benefit-cost efficiency and electoral support affect road investment decisions in Sweden and Norway. In Norway, neither benefits nor costs seem to affect project selection. In Sweden, civil servants' decisions are strongly affected by projects' benefit-cost ratios, with a stronger effect for more expensive projects, while politicians' decisions are only weakly affected, and only for small projects. In both countries, governments tend to favour investments in regions where they enjoy strong local electoral support. Using cost efficiency as a final selection criterion seems to filter out many inefficient projects already at an early stage of the planning process.
ISSN:0022-5258
1754-5951
1754-5951