Article



Dados n. 9 Rio de Janeiro 1972

Princípios Econômicos para a Avaliação Governamental de Projetos de Investimento

Bacha, Edmar L.

Abstract

The most important investment decisions in the Brazilian economy are, directly or indirectly, under the control of the Federal government. This control is frequently effected without an adequate appraisal of the relationships between investments decisions and economic development objectives. A financial feasibility or private profitability test is almost always adopted as the basic criterium for project's approval by the governmental agencies. The author argues that projet analyses based on private profits make little sense. Governmental agencies should analyze investment projects on the grounds of their national economic profitability, as estimated by shadow prices for inputs and outputs. The concept of shadow prices is discussed, and shadow prices' values are demonstrated to reflect both the macroeconomic scarcity of resources and governmental economic policy.

Full text

Princípios Econômicos para a Avaliação Governamental de Projetos de Investimento