Evaluation of stakeholder impacts in cost-benefit analysis

Abstract

The scope of the analyses of public and private investment projects is expanded beyond the traditional criteria of financial and economic net present value. If the economic and financial analyses are carried out using a common numeraire, they can include issues of stakeholder impacts, poverty impacts, and an assessment of the long-term sustainability of the project. We can now assess the income impacts on different interest groups. This forces the analyst to do a reconciliation between the economic performance, the financial performance and the distributional impacts of a project. Three examples of projects in Cyprus, Bangladesh and the Philippines: traditional economic and financial analyses would not have identified many of the most important aspects of the process that determined whether or not the projects would be implemented and sustainable.