Premium
A Cost–Benefit Approach to the Evaluation of Regional Selective Assistance
Author(s) -
SWALES KIM
Publication year - 1997
Publication title -
fiscal studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.63
H-Index - 40
eISSN - 1475-5890
pISSN - 0143-5671
DOI - 10.1111/j.1475-5890.1997.tb00254.x
Subject(s) - exchequer , ex ante , economics , subsidy , house of commons , macroeconomics , law , political science , market economy , parliament , politics
The ‘Green Book’ and the recent EGRUP report support exchequer cost per job as a key input in the ex‐ante appraisal of individual applications for Regional Selective Assistance (RSA) and the ex‐post evaluation of the RSA scheme as a whole. In this paper, following a recommendation in the House of Commons Trade and Industry Committee's report on regional policy, the merits of an alternative, explicitly cost‐benefit, framework are outlined. This approach incorporates the administration and compliance costs of the subsidy, costs at present ignored in RSA evaluation studies. An optimal ex‐ante appraisal rule is developed. This takes the form of a cost‐per‐job ceiling, and a representative value is calculated for this figure. JEL classification : H20.