Social Cost Benefit Analysis and Soil Erosion

Abstract

The theory of social cost-benefit analysis, although originally much motivated by public water management problems, did not until recently take much note of investment projects in which environmental resources are a prominent item. For example, the several treatises on investment planning and social cost-benefit analysis written during the decade of the 1970s (e.g., Dasgupta et al., 1972) and Little and Mirrlees (1969, 1974) made no mention of environmental resources. While these publications spelt out in detail the social costs of employing unskilled labour, tradeable commodities, public versus private investment, and so forth, the specific problems that are associated with the valuation of environmental resources were untouched in such discussions. This omission is presumably a reflection of the fact that environmental resources, until recently, did not enter the agenda of economic debates in developing countries. It is tempting to speculate why this may have been so.KeywordsInterest RateForeign ExchangeEnvironmental ResourceShadow PriceSocial RateThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.