economics paper study
An introduction to the economic assessment of drinking-water improvements 5
2.1 THE NEED FOR PUBLIC SECTOR INTERVENTIONS,
AND WHY AN ECONOMIC ASSESSMENT IS
The previous chapter set out the background to, and objectives of this publication. It pointed out that even if access to clean water is a constitutional human right as it is in many countries, it is likely that such improvements will only be provided if they are shown to be a good use of public funds in comparison with the whole cross-sectoral range of possible interventions. The primary purpose of this publication is to help policy makers and experts from a range of disciplines involved with drinking-water interventions understand the role economic assessments (see Box 2.1) can play in arriving at an informed judgement whether or not water supply improvements are a good use of public funds. 1
BOX 2.1: Forms of Economic Assessment
For the purposes of this publication, we have adopted a convention in terms of describing economic techniques used at different stages n the project cycle.
Economic assessment is used as an umbrella term when no specific stage in the project cycle is implied.
Economic appraisal refers to economic assessment carried out when possible interventions are being compared with to the objective of prioritising them for implementation.
Economic evaluation takes place after interventions and usually attempts to capture their total impact with a view to learning lessons and guiding future priorities for public sector investment.
As we will see, there are three forms of economic assessment that can be usefully applied to estimate whether the public sector should finance
(completely or in part) improvements in access to safe
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