METHODS OF ANALYSIS OF THE EFFECTIVENESS OF PUBLIC SECTOR PROJECTS: FEATURES AND CONSTRAINTS

• Main Authors: Volodymyr Lipkan, Lydmyla Vasutynska, Tetyana Syvak
• Format: Article
• Language: English
• Published: Izdevnieciba “Baltija Publishing” 2018-01-01
• Series: Baltic Journal of Economic Studies
• Subjects: cost-benefit analysis; social rate of discount; cost-effectiveness analysis; weighted cost-effectiveness analysis; cost-utility analysis
• Online Access: http://www.baltijapublishing.lv/index.php/issue/article/view/358/pdf

The purpose of the paper is to consider the main provisions of methods of analysis of the effectiveness of public sector projects. A number of issues remain controversial in the methodology of analysing costs and benefits. So, in addition to determining the costs and benefits to be included in the analysis, one should outline the problem of assessing in the monetary equivalent of the social effects that society receives from the project implementation. Methodology. The social nature and scale of tasks that are solved in the public sector deepen the issue of identification of social effects. Discounting costs and benefits and assessing the social effect in the cost-benefit analysis involves the application of the rate of time preference. The parameters of this rate are analysed and substantiated in the study. In addition to the CBA method, an attention is paid to other methods of efficiency analysis, in particular, the method of cost-effectiveness analysis, method of weighted cost-effectiveness analysis, method of cost-utility analysis. Each method has its own specific features and limitations that determine the direction of their application. Results. It is concluded that finding solutions in the direction of studying the relationship between the social rate of intergovernmental preferences and other methods of discounting will allow us to get an idea, in which range may be the value of social discount rate. The ability to determine the range will allow taking into account the specificity of the project being implemented.