In the context of scarce EU budgetary resources and strained public finances, cost-benefit analysis (CBA) plays a crucial role in assisting policymakers’ public investment decisions. The purpose of this paper is to draw lessons from the CBA experience under the Structural and Cohesion Funds to date. The paper reviews the main developments over the last decade, highlighting the role played by the Commission in helping foster a sound project appraisal culture in the member states. It also points out the relevance of CBA in assisting the allocation of EU funds across projects. Particularly, it is shown how the new method that will be used to determine the level of Community assistance should prevent the crowding out of other sources of finance by increasing the leverage effect and creating incentives for attracting private capital. Finally, the paper will discuss the main policy implications in terms of affordability and sustainability issues.
Cost-Benefit Analysis, Project Evaluation, Structural Funds, European Regional Policy
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