This paper argues that the main problem with cost-benefit assessment (CBA) is not its incomplete identification of benefits but rather its inability to elicit consistently the investment decisions required to realise the benefits it identifies. The paper analyses two limits inherent to CBA - sectoral and national - which help to explain this inability, and proposes solutions in each case. It recommends the use of macroeconomic analysis to test the crowding-out counter-argument sometimes used by Finance Ministries whenever that counter-argument threatens to veto the CBA-passed projects of Transport Ministries and it recommends the use of supranational analysis to correct the problem of evaluation that arises whenever cross-border projects are funded as separate national sections. (A)
Abstract