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A sad story of cost-benefit analysis April 5, 2009

Posted by Sverre in : Public Policy , 1 comment so far

In public policy, it’s very popular to do a cost-benefit analysis as background for an investment decision. And I’ve got the impression that more often than not, some important cost gets lef out of the equation. Either accidentially or by design to make it easier to get the project passed. This is the true, sad story of such an analysis.

Today was Saturday. I was going to be a good student and go to campus anyway, but my bus pass had run out. But the snow has mostly melted by now, and we haven’t had frost for a while, so I decided today was a good day to take out my bike from the shed. So I did and went to campus. (more…)

Norwegian roads and swing voters February 24, 2009

Posted by Sverre in : Norwegian politics, Political economy, Public Policy , 2comments

navarseteIn recent weeks, there has been som controversy in Norwegian media over an article by Leif Helland and Rune J. Sørensen of the Norwegian School of Management (BI) about a systemic skew in Norwegian road building. Their research shows that there appears to be systematic self-serving rational choice behavior by Norwegian politicians, as districts with important swing voters tend to get more grants for road building, and that this affects the social efficiency of road building in general. Read the article (link at the bottom) for more on their findings.

This was picked up by Norwegian media when Norwegian parliamentarians met with Swedish counterparts and presented under the heading “Met by laughter in Sweden”. What the Swedes were laughing at was the level of micromanagement in road building that the Norwegian parliament is involved in. In Norway, every road builiding project is a parliament issue, and Helland and Sørensen have proved that this leads to non-optimal distributions of road construction money.

Norwegian Secretary of Transportation Liv Signe Navarsete doesn’t get the most important point:

(more…)