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Journal Articles
February 1997
Article
A cost-benefit approach to the evaluation of regional selective assistance
Type: Journal Articles
Authors: Kim Swales
ISSN: Print: 0143-5671 Online: 1475-5890
Volume, issue, pages: Vol. 18, No. 1, pp. 73-85
JEL classification: H20

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The 'Green Book' and the recent EGRUP report support exchequer cost per job as a key input in the ex-ante appraisal of individual applications for Regional Selective Assistance (RSA) and the ex-post evaluation of the RSA scheme as a whole. In this paper, following a recommendation in the House of Commons Trade and Industry Committee's report on regional policy, the merits of an alternative, explicitly cost-benefit, framework are outlined. This approach incorporates the administration and compliance costs of the subsidy, costs at present ignored in RSA evaluation studies. An optimal ex-ante appraisal rule is developed. This takes the form of a cost-per-job ceiling, and a representative value is calculated for this figure.

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