The previous five chapters have discussed how principles based on economic theory can be developed to act as guidelines for public policy decision-making. The various arguments showed clearly some problems of applying ‘abstract’ economic ideas to the practical world, even though there was no detailed attempt to develop policy rules as such. That is the objective of this and the next three chapters, and many more difficulties will arise in the move towards interpreting as concrete policy criteria the principles developed earlier. The division of decision-making areas between the four chapters of this section is largely for convenience, since it is impossible to consider any part of public policy in isolation from the rest, but without some categorisation the problem becomes very unwieldy.
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Suggestions for Further Reading
- K. J. ARROW, ‘Discounting and Public Investment Criteria’, in Water Resources Research, ed. A. V. Kneese and S. C. Smith (Baltimore: Johns Hopkins Press, 1966).Google Scholar
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- W. J. BAUMOL, Economic Theory and Operations Analysis, 3rd edn (Englewood Cliffs, N.J.: Prentice-Hall, 1972).Google Scholar
- G. CORTI, ‘Risk, Uncertainty and Cost Benefit: Some Notes on Practical Difficulties for Project Appraisals’, in Cost Benefit and Cost Effectiveness, ed. J. N. Wolfe (London: Allen & Unwin, 1973).Google Scholar
- M. S. FELDSTEIN, ‘Net Social Benefits and the Public Investment Decision’, Oxford Economic Papers, vol. 16 (1964).Google Scholar
- M. S. FELDSTEIN AND J. M. FLEMING, ‘The Problem of Time-Stream Evaluation: Present Value versus Internal Rate of Return Rules’, Bulletin of the Oxford University Institute of Economics and Statistics, vol. 26 (1964).Google Scholar
- F. H. KNIGHT, Risk, Uncertainty and Profit (New York: Harper & Row, 1921).Google Scholar
- S. A. MARGLIN, ‘The Social Rate of Discount and the Optimum Rate of Investment’, Quarterly Journal of Economics, vol. 77 (1963).Google Scholar
- A. J. MERRET AND A. SYKES, The Finance and Analysis of Capital Projects (London: Longmans, 1963).Google Scholar
- E. J. MISHAN, Elements of Cost Benefit Analysis (London: Allen & Unwin, 1972).Google Scholar
- RALPH TURVEY, ‘Present Value vs. Internal Rate of Return’, Economic Journal, vol. 57 (1963).Google Scholar