Policy Memo #2

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Policy Analysis
Fall 2010
Leigh Graham

Policy Analysis Memo # 2
Due: Beginning of Class, Wednesday, October 27th

Read and analyze the case, “Bridge over Tempisque River.” (Download from KSG)

Assume it is 1994 and the bridge has not been built but there have been new elections and Costa Rica’s Ministry of Public Works and Transport (MOPT) is still considering constructing a bridge over the Tempisque River. There is no new information in the case, but the Minister wants your analysis of the situation as a senior analyst at the MOPT. She wants your analysis in a brief memo, including what recommendation you would make on whether the bridge should be built or not. You should make your case using all the supporting evidence from your analysis.

Write a brief, five-page memo addressed to the MOPT Minister, which provides your analysis of the case. In doing so you might want to consider some of the following questions:

• Is the previous MOPT analysis convincing? Why or why not? What does the earlier study show? What problems did you identify?

• What are the benefits and costs to building the bridge? Are these the right ones? Are there any missing? Are they appropriately (correctly) valued?

• The MOPT thinks of the bridge entirely as a transportation project, and considers only the transportation costs and benefits. Accepting this interpretation, is the analysis convincing?

• Which of the benefits and costs cited by the environmentalists and tourist industry officials should be considered? How can they be valued in dollar terms? Do you agree with Professor Castro’s valuation?

• What criteria, if any, besides costs and benefits should she use to decide what to do?

In developing your argument (memo and analysis) you may find it useful to rework the spreadsheet from the previous MOPT analysis, but do not bother to change the base year from 1992 to 1994. It does not change the analysis materially. Further, it is not...
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