Social Cost-Benefit Analysis (SCBA)

Social Cost-Benefit Analysis (SCBA)

• SCBA is a vital tool for decision-making, providing a systematic framework to evaluate the costs and benefits of projects, policies, or interventions from a societal perspective.

Rationale for SCBA

• SCBA supports decision-making for national, provincial, and municipal governments.
• It is used for infrastructural projects, area development projects, sustainable energy development, and water and nature issues.

Scope of SCBA

• SCBA can be applied to both public and private investments.
• In public investments, SCBA is crucial, especially for developing countries where the government plays a significant role in economic development.
• In private investments, SCBA is important as private investments require approval from governmental and quasi-governmental agencies.

Objectives of SCBA

• The main focus of SCBA is to determine: • Economic benefits of the project in terms of shadow prices. • The impact of the project on the level of saving and investment in society. • The impact of the project on the distribution of income in society. • The contribution of the project towards fulfilling certain merit wants (self-sufficiency, employment, etc.).