Resumo

PIENAAR, WJ. The coherence of and distinctions between social cost-benefit analysis and economic impact analysis of road projects. Tydskr. geesteswet. [online]. 2024, vol.64, n.1, pp.53-66. ISSN 2224-7912.  http://dx.doi.org/10.17159/2224-7912/2024/v64n1a3.

This article deals with the nature of social cost-benefit analysis (SCBA) and economic impact analysis (ECIA) of road projects and describes the coherence of and distinctions between the two types of analysis. In the final part of the article, the reasons are given for not including in an SCBA the economic impacts of a road as determined through an ECIA, regardless of how positive they may be. The SCBA of a road project is a systematic procedure to determine the economic viability of the road project by considering the costs and benefits that accrue when the road is constructed and during the service period of the project. The cost component in the SCBA of a road project is the once-off investment or capital cost of taking the road into service or improving it. The benefit component in the SCBA of a road is the difference between recurring costs associated with an improved road and without the road improvement. Recurring costs of a road include (a) road user costs, (b) external costs arising from road use and (c) maintenance costs to protect and preserve the usefulness of the road. The beneficiaries in an SCBA are the road users. The following road user groups can be distinguished: (i) Normal traffic (consisting of existing, normal-growth and non-induced development traffic; (ii) diverted traffic; and (iii) induced traffic (consisting of generated, induced development, and transferred traffic.) To assess the efficiency of resource allocation, an SCBA is based on the consideration of social cost. From the perspective of allocative efficiency, as determined by an SCBA, a road project is regarded as economically viable when the current value of the reduction in recurring costs associated with the road during its service life exceeds the current value of the once-off investment cost of taking the road into service. Road provision and use have economic impacts. Unlike an SCBA, which focuses on the efficiency with which a road project increases accessibility for and the mobility of road users, a regional economic impact analysis (ECIA) focuses on the effectiveness of a project to affect the performance of the economy of a region by enhancing time and place utilities creation by non-road-users. Consequently, an analysis of the effect construction, operation and use of a road will have on regional economic performance should focus on their expected income multiplier and accelerator effects on the number and size of activities in the economy of a region. The following non-road-user groups can be distinguished: (a) The public, (b) landowners, occupants and land users, (c) roadside enterprises, (d) utility enterprises and (e) goods consignors and consignees (in their capacity as non-road-users). An ECIA is based on a consideration of market prices. In an ECIA the following objectives serve as criteria for judging the impact of a road project on the performance of the economy: • Economic growth (including economic development) • Full employment • Price stability • Balance of payments stability • Equitable distribution of income These impacts, regardless of how positive they may be, are not included in an SCBA for the following reasons: • A comprehensive economic assessment consists of two components that are performed in tandem, namely an SCBA and an ECIA. An SCBA relies on allocative efficiency as assessment criterion, while an ECIA relies on output effectiveness as assessment criterion. The inclusion of effectiveness criteria among efficiency criteria in an SCBA will result in a misrepresentation of project viability. • Double counting of benefits will occur when road user cost savings and economic impacts are combined. • Not all the economic benefits obtained through coordinated investment in various sectors, one of which may be a road, can be ascribed to the investment in the road alone. The reason for conducting an ECIA of a road project is to determine to what measure the analysed road is expected to affect the performance of the economy of the region concerned. Although the results of an ECIA do not form part of the outcome of an SCBA, an ECIA can be used as an instrument in the pursuit of the economic policy objectives of a government.

Palavras-chave : Social cost-benefit analysis; economic impact analysis; normal traffic; diverted traffic; induced traffic; economic growth; economic development; full employment; price stability; balance of payments stability; efficiency; effectiveness.

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