Cost-Benefit analysis of Public Projects

Public projects are still subject of heated discussions, especially with the respect to their efficiency that is usually not sufficient enough. In spite of existence of many ways how to increase their efficiency, it is readily possible to identify one fundamental criterion which is high-quality information for decision-making. It is important to deliver high-quality information to those who make decision in order to reduce wastage of the public funds on not efficient public projects. All substantial information about effects incurred by project's realization can be offered by the Cost-Benefit analysis. The Cost Benefit analysis should be prepared for each significant public project to prevent from realization of ineffective ones. It is essential to process each Cost-Benefit analysis in required qualitative level for making right decision. Purpose of this thesis is appraisal of usefulness of the Cost-Benefit analysis for specific purposes of the public sector and assessment of indexes used in the Analysis. In the thesis will be introduced public projects, related public sector and evaluation of public projects. Subsequently, the Cost-Benefit analysis itself will be presented as well as steps for processing high-quality Cost-Benefit analysis. The emphasis will be focused at discount rate and its determination, since I consider it as the critical issue of the Cost-Benefit analysis. A practical example of the Cost-Benefit analysis will be presented at the end of this thesis.