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Social discounting and the cost of public funds: a practitioner's perspective

Spackman, Michael (2020) Social discounting and the cost of public funds: a practitioner's perspective. Journal of Benefit-Cost Analysis, 11 (2). pp. 244-271. ISSN 2194-5888

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Identification Number: 10.1017/bca.2020.5

Abstract

Social discounting conventions vary widely. Some differences reflect institutional constraints, but many reflect differing assumptions about how a social discount rate should be derived and applied. The divide between advocates of social opportunity cost and social time preference (STP) frameworks seems unbridgeable. There is no consensus among STP advocates on whether the social cost of funding 1 of public spending is barely more than 1 of consumption or perhaps more than 2; or on whether the covariance of public service benefits with income merits a discount rate premium that is trivial or a few percentage points. The practicalities of government fund raising are sometimes overlooked. The issues are here reviewed in the light of the literature and of experience with developing and applying social discounting regimes and extended debates within government.

Item Type: Article
Additional Information: © 2020 Society for Benefit-Cost Analysis.
Divisions: Grantham Research Institute
Subjects: H Social Sciences
Date Deposited: 18 Aug 2022 10:30
Last Modified: 24 Aug 2022 09:21
URI: http://eprints.lse.ac.uk/id/eprint/116024

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