5.3. The formation of the spiritual world of a schoolchild in the process of analyzing a work of art (on the example of K.D. Balmont's poem "Ocean")

5.3. The study of the theory of literature as the basis for the analysis of a work of art Plan for mastering the topic Information of a theoretical and literary nature in school curricula (principles of inclusion in the school curriculum, correlation with the text of the work under study,

At the origins of psychological analysis F. M. Dostoevsky (Petersburg poem "The Double") F. M. Dostoevsky is rightfully considered the founder of psychological analysis in Russian literature. The experiments in this area of ​​all his predecessors (M. Yu. Lermontov, N. V. Gogol, V. F.

There is no collective choice mechanism that meets the following six conditions simultaneously.

1. An effective choice is feasible for any combination of individual preferences (universality).

2. If in relation to some pair of alternatives X and at all individuals have the same preferences xR i y , then for the collective choice xRy . For example, if no voter prefers a candidate BUT candidate B (choice B is Pareto optimal), then the procedure should not lead to the election BUT .

3. An individual is able to carry out a pairwise comparison of any two alternatives, without causing it by his attitude to extraneous alternatives. So, if two possible options for tax cuts are put up for vote: by 5 and 10%, the participant in the choice is able to compare them with each other, regardless of how he relates to other options for tax changes.

4. For any pair of alternatives X and at or xRy , or uRx , or both are true (in the latter case, the alternatives are equivalent). This condition fixes the requirement of completeness formulated earlier.

5. For any three alternatives X , at and z , if xRy and uRz ., then xRz (condition of transitivity).

6. There is no such individual (“dictator”) that his preference xR i y automatically entails xRy regardless of the preferences of other individuals.

The logic of the reasoning used in the course of the proofs of the theorem is to show the incompatibility of the first five conditions with the collective nature of the choice, that is, with the fact that the whole group actually influences the decision for any profile of preferences.

The voting paradox suggests that no group of individuals other than an absolute majority has advantages over others. The conditions of the impossibility theorem do not include such a strict requirement. The group that ultimately determines the collective decision can be arbitrarily small (that is, the procedure can be “oligarchic”), but as long as it includes at least two people, the voting paradox is reproduced.

Schematically, the proof is as follows. First of all, the concept decisive subsets of individuals. This is such a subset that if for all its members xR i y , then for the entire set of participants xRy . The simplest example of a decisive subset is a majority of voters, if the selection procedure assumes the majority principle. The essence of the proof is to show that, at least in some cases, a rational choice cannot be provided if the decisive subset includes more than one individual.

Let be V is the smallest decision subset. If it is not identical to the individual - the "dictator", then it can be divided into two: V 1 , and V 2 . Let be V 3 , is a subset that includes all participants in the choice that are not included in the V , that is, not belonging to the decisive subset.

If all members V 3 unanimous among themselves, as well as with all members V 1 , they can jointly block the choice made by members V 2 , because otherwise V 2 , not a wider subset V would be decisive. Similarly, the unanimity of all members V 2 and V 3 provides blocking of choices that members make V 1 .

Suppose there are three alternatives X , at and z , and each of the members of the subset V 1 ranks them in order X , at, z , each member of the subset V 2 - in order at , z, X, and each member V 3 - in order z , X, at.

Insofar as V 1 and V 2 together form a decisive subset V , then their coinciding preference uRz should be accepted as a collective position. However, members V 1 find allies in V 3 , when comparing X and at , and the members V 2 perform together with V 3 , when comparing z and X .

If the alternatives are not equal to those who compare them, the paradox of voting arises in an obvious way: a single position V 1 and V 3 determines the superiority X above y , and the general position V 2 and V 3 , - superiority z , above X . Thus, due to the transitivity zRu , which is incompatible with superiority at towards z set earlier.

There is no contradiction only if V indivisible (consists of one person), which excludes the possibility of confrontation V 1 and V 2 .

A rigorous proof involves an analysis of points omitted in this scheme. Thus, the assumption actually used above that if V plays the role of a decisive subset in the choice between X and at , then it also acts as a decisive factor in the choice between X and z . and between at and z .

In fact, using the transitivity of preferences, one can prove that when a subset is decisive with respect to one pair of alternatives, then it remains so with respect to any other pair.

Using the conditions of completeness and universality, it is proved that the theorem is true even if some particular alternatives X , at and z are recognized as equivalent.

However, a loose preference xRy (X surpasses at or equivalent) can be replaced by two different ratios: xpy (X strictly surpasses at ) and xIy (X equivalent at ). It is proved that for the absence of cyclic voting, it is sufficient that only strict preferences be transitive xpy , in this case, it is possible to introduce a universal procedure that does not involve a “dictator”. However, in the general case, such a procedure does not provide an effective choice: instead of one most preferred alternative, a whole set of non-comparable (equivalent) alternatives is allocated. This approach is ultimately consistent with the Pareto optimization principle.

So, if a public choice becomes a decision that is not reducible to Pareto improvements (assuming a broadly understood redistribution), it is not always possible to make this choice both rational and “non-dictatorial”.

In order to achieve the most rational use of public funds, it is necessary to determine their return as accurately as possible, compare it with costs, and compare different program options in terms of costs and benefits. What is the amount of funds needed by the public sector to carry out the functions assigned to it? How to optimize the cost structure? How to achieve the desired results at the lowest cost? These questions constantly arise during the development and execution of budgets.

Clear formalized procedures for evaluating and comparing costs and results can serve as an alternative, on the one hand, to voluntaristic decision-making, ultimately subordinated to the interests of the bureaucracy, and on the other, to planning future expenses “from the achieved level”, when costs are determined not so much by considerations of rationality as pre-established proportions. The inertia of public spending, which is characteristic of planning from what has been achieved, is fraught with two kinds of dangers. First, there is a tendency to repeatedly repeat mistakes once made. Second, even if the cost structure has been close to optimal in the past, its excessively long mothballing inevitably comes into conflict with changing needs and new opportunities.

Budgeting “from the achieved level” is more or less acceptable when the society is highly satisfied with the state of the public sector and is not itself in the process of profound changes. The deeper and more intense the shifts in the objective conditions for the development of the public sector and the demands that it is designed to satisfy, the more urgent the need for reforming this sector itself, the less acceptable it is to rely on previous models. Search comes into focus alternative options use of public funds and comparison of these options with each other in order to choose the optimal one. The rationalization of the selection of options that best meet the requirements of efficiency is the essence of the cost-benefit methods that this chapter is devoted to.

Before proceeding to characterize these methods, it should be emphasized that they do not replace political decisions, but rather provide information useful for making them . Society cannot and does not seek to entrust the allocation of its resources to some impersonal formalized procedures. Procedures and rules are developed by people and in this case serve to reflect the interests of taxpayers as completely, accurately and systematically as possible. Naturally, the application of these procedures is built into the political process, and they should be seen as nothing more than information support tools for decision-making.

Given this circumstance, it makes no sense to impose excessively high demands on assessments, in particular, to expect that on their basis it will be possible to find solutions that completely harmonize objectively discordant interests. Often, the analysis cannot do without some simplifications, subjective assumptions, etc. There are no ideal formalized methods for assessing costs and results in the public sector, otherwise the preparation and adoption of the budget could be turned into a purely technical operation. However, the use of available analytical methods gives a huge gain, allowing you to cut off obviously worse options, find successful alternatives that would otherwise remain in the shadows, avoid internal contradictions in estimates, take into account various side effects, make intertemporal comparisons, etc. In short, these methods make it possible to achieve much more rationality public choice than is usually possible without their help (as noted in Chapter Three, the rationality of choice implies completeness and transitivity).

The development and application of analytical procedures to help make informed decisions is in itself a specific activity in the public sector and incurs costs. The more complete and perfect information is supposed to be used, the more time and money, as a rule, have to be spent on obtaining it. This applies to both the collection of raw data and its processing. Refinement of information can be depreciated by its too late receipt and excessive growth of its cost. In this regard, in practice, all theoretically available reserves for improving estimates and decisions based on them are not always realized. Accordingly, there remains some, albeit significantly narrowed, space for purely volitional, intuitive decisions, and for planning “from what has been achieved”.

Even if the situation does not allow the use of complex methods and labor-intensive calculations, it is extremely useful to be able to comprehend the real processes of allocation and use of public funds from the standpoint of those fundamental approaches that the theory of cost-benefit analysis offers. The purpose of this chapter is to acquaint the reader with the methods of finding optimal solutions in the field of using public funds at the level of general fundamental approaches.

Evaluation and comparison of costs and benefits allow you to make informed decisions not only in the public sector, but also in the private business sector. In both cases, it is required to determine as fully and accurately as possible, firstly, the cost components, secondly, the range of consequences, the results to which they lead, and thirdly, economic indicators that allow evaluating various elements of costs and results on a single scale, fourthly, net return, that is, the difference between results and costs. However, these tasks are solved in different ways, depending on whose interests dictate economic decisions. In the business sector, it is natural to proceed from the private interests of investors; in the public sector, from the general interests of citizens (taxpayers).

For a private firm acting in the interests of its owners, the components of the costs are the paid labor of its own personnel, as well as raw materials purchased on the market, materials and other goods and services necessary for the production process. The immediate results of these costs are embodied in the firm's output, which also enters the market. In the role of adequate economic measures of costs and results are those market prices at which purchases and sales are actually carried out. Net return is characterized by profit.

When it comes to the public sector, the situation is more complicated. Costs and benefits must be assessed from the standpoint of the whole society. The net return to be maximized is the difference between social benefits and social costs .

From this, it first of all follows that both the cost components and the range of results to be achieved follow assess externalities . If a private firm has a negative impact on the natural environment without being penalized for it, it should not be expected that it will include the corresponding losses to society in its own costs. After all, even if the owners live in the same area, they bear only an insignificant part of the total losses. If, on the other hand, tougher legislation forces the firm to pay a corrective tax or purchase better treatment plants, its costs will increase and its profits will decrease, so that the interests of the owners will suffer. However, as soon as any activity is carried out in the public sector or financed by public spending, its negative externalities should be fully taken into account in the composition of costs, and their reduction should be considered as a positive result, since it is in the public interest.

At the same time, positive externalities must be taken into account as part of the benefits received by society. When positive externalities are attributable to the costs of a private firm, the income of its owners does not increase from this, and the firm does not take such effects into account when determining the effectiveness of its work. But for society as a whole, positive externalities mean an increase in well-being.

While private firms are market oriented, the public sector often has to adjust market prices . This applies not only to prices for material goods, but also, for example, wage rates and the rate of interest, which makes it possible to measure current and future consumption and serves as the basis for the allocation of resources over time.

Let us assume that the public sector uses the monopolist's product as one of its cost components. Due to the imperfection of the market for this product, its price does not meet the conditions for the optimal allocation of resources from the point of view of society. This may give grounds for adjusting the calculations. Accounting for externalities, as discussed above, can also be carried out with the help of estimated price adjustments for input and output elements.

When analyzing the rationality of public spending, it is necessary evaluate those components of costs and results that do not become objects of market relations . A private firm living by the laws of the market will not produce products that cannot be sold at a profit, and it considers resources that do not need to be purchased for a fee, such as air, as free. As for the public sector, its functions include meeting the needs for public goods that do not have market prices. The return on public spending, of course, cannot be determined without taking into account goods for which there are no markets. However, when the resource being expended is not marketable but not inexhaustible, it may make sense from a societal point of view to attempt to give it a settlement price.

So, in order to adjust market prices and to take into account the value of goods not entering the market, we need settlement prices , adequately reflecting the preferences of society and the opportunity cost of the resources expended. Such prices, used in the analysis of social costs and benefits, are commonly called shadow .

We have seen that in the public sector, unlike the private sector, one cannot rely uncritically on the information provided by the market. This is natural, since the public sector operates mainly in areas of market flaws. It is in these zones that the signals generated within the framework of market pricing do not accurately orient consumers and producers to achieve Pareto-optimal states. At the same time, the market behavior of individuals and organizations provides the most important input for determining social costs and benefits.

The rationality of public spending is determined by their economy, the productivity of the resources used and the effectiveness of costs.

economy characterizes the cost (resource) side of efficiency. Economical solutions are those in which resources of the required composition, quantity and quality are acquired and used at the lowest possible cost. Economical means not being extravagant, i.e. drawing excess resources into the public sector, creating excess stocks, paying cost components at prices above the minimum, etc.

Performance – This is the ratio of the quantity of products or services to the value of the costs of their production. In the public sector, as well as in the private sector, indicators are used that reflect the productivity of labor and other individual types of resource costs, as well as integral indicators that involve the comparison of costs of all types with each other.

Efficiency characterizes the correspondence of public expenditures and the results achieved with their help to the specific goals that the public sector is called upon to serve in one case or another. If, when evaluating productivity, attention is focused on products as such, then when analyzing performance, it is rather on the extent to which it meets certain needs, preferences of society.

It is obvious that economy, productivity and effectiveness are closely related and can be isolated from each other only with a certain degree of conventionality. Indeed, in fact, they express only various aspects, sides efficiency public spending. As a rule, more economical solutions provide the highest performance, which in turn leads to proper performance.

However, distinguishing between complementary aspects of analysis helps to streamline it. In addition, in some cases, conflicts arise between these criteria. For example, if there are economies of scale, productivity is higher the larger the amount of work, while from the point of view of efficiency it may be advisable to limit the amount to a small amount. Let's say a publicly funded school can reduce its cost per student by 20% if the student population doubles. Whether it makes sense to go for a corresponding increase in total costs depends on the need for specialists in this profile. If it is far from being saturated and the society's goal is to fill the gap, increasing productivity will undoubtedly help to achieve greater performance. But if the need was sufficiently met with the same number of students, productivity considerations should not dominate.

In areas of activity associated with risk and uncertainty, sometimes it is necessary to sacrifice some degree of economy in order to more reliably guarantee results. For example, in the public health system, resources may be acquired for contingencies that are not absolutely necessary in terms of current need.

Other examples can be given when the requirements of efficiency and productivity, taken in isolation, conflict with the performance criterion. Ultimately, the latter is crucial, and efficiency is often synonymous with efficiency.

In the rational preparation of decisions, the idea of ​​effectiveness is taken as the starting point. From the point of view of the goals chosen by society, the main requirements for products and services that must be created with the help of the public sector are determined (note that in the business sector, the production program is determined by market conditions). Then, on this basis, the problem of achieving the maximum possible productivity is posed and an economical selection of resources is carried out. However, this is an iterative process, in which the results of subsequent stages may lead to some adjustment of the previous ones.

In order to compare options for public spending in terms of economy, it is necessary to know the composition of the costs and their prices (perhaps calculated, built taking into account the circumstances mentioned above). To assess productivity, along with this, indicators are also required that characterize the products and services created at the expense of the public sector, for example, the number of housing commissioned, the volume of medical care, etc. The greatest difficulties in this are usually associated with taking into account quality products and services. Thus, housing equipped with modern conveniences is a different blessing compared to housing that does not have such amenities, and, naturally, this is reflected in the amount of costs. In this regard, when determining productivity, it is necessary to differentiate the results achieved based on quality standards and take into account the comparative resource intensity of the implementation of each of them.

As for performance evaluation, the inability to focus on universal indicators of profitability makes it necessary to develop special indicators of achievement of goals . In particular, indicators characterizing the timeliness and completeness of the implementation of a particular function are widely used. So, to judge the work of ambulance, fire brigade and emergency services, the characteristics of the average and maximum speed of response to a call help.

For some activities, it is possible to find simple generalizing performance indicators, for others, systems of indicators are needed, including expert assessments.

The relationship between performance and effectiveness can be explained with the help of the following examples. Let it be about professional retraining of the unemployed for the purpose of employment. Productivity in this case is determined by the expenditure of resources per student, but in order to characterize the effectiveness, it is important to take into account, among other things, the share of those who were actually able to get a job in the total number of those who underwent retraining.

Another example relates to the construction of public housing. Productivity is characterized by the ratio of the number of housing to the cost of its construction, and from the point of view of efficiency, it is not so much the number of square meters commissioned that is important, but the number of families who received apartments of an acceptable quality for them. Obviously, when choosing solutions, it is necessary to pay attention to the structure of families and the nature of their requests, in particular, the relative urgency, on the one hand, to obtain housing as soon as possible, and on the other hand, to improve its qualitative characteristics. It is clear that given resource opportunities, one can be achieved to a certain extent at the expense of the other, so it is important to capture the real preferences of consumers.

Evaluation of consumer preferences and their satisfaction with the state of the public sector is of paramount importance for improving existing service systems. Population surveys may be conducted to obtain relevant information.

Without touching on more specific methodological problems associated with the construction of indicators, it is advisable, however, to emphasize the desirability of their use in almost all cases when public spending is planned and carried out. Clearly defined goals and a set of economic, performance, and performance characteristics not only help inform investment decisions, but also track program progress, identify efficiency gains, and select the best use of funds.

The term “cost-benefit analysis” refers to a set of analytical techniques that allow you to determine the expenditure of resources to achieve a particular goal set for the public sector, and choose the best, from this point of view, solutions. The scope of such an analysis covers not only performance assessments per se, but also productivity and economy, as they directly affect performance. At the same time, cost-benefit analysis does not imply a comparison of heterogeneous results among themselves.

Let's say, for example, that the city administration has set clear goals regarding the improvement of kindergartens and public transport. In this case, there are two dissimilar tasks, for each of which it is appropriate to apply a cost-benefit analysis. In both cases, it will be necessary to select indicators that are adequate to a specific type of activity and the specifics of the goals set. Since both activities and goals are significantly different, the indicators are likely to be directly incomparable with each other. But this is not a disadvantage when, in practice, tasks can be sufficiently isolated from each other. Thus, for a unit responsible for transport, it is often not only legitimate, but also desirable to operate with characteristics that reflect the specifics of the industry to the maximum extent, even if they were not applicable to other industries.

This, however, is not enough when it comes to allocating public sector resources among different activities. Cost-benefit analysis is useful when there are limits on funds for both public transport and kindergartens, and the challenge is to improve their use in each area. However, such an analysis does not allow to give a reasonable answer to the question in which of the areas it is more appropriate to invest additional funds. After all, the question presupposes comparable assessments of the return that society receives from spending in both areas. This requires more complex and time-consuming analytical procedures, which are discussed below.

At first glance, cost-benefit analysis can be reduced to a simple determination of the average expenditure of resources per unit of result. Of course, the relevant indicators are of great practical importance. However, when preparing allocation decisions in the public sector, as in the economy in general, marginal values ​​deserve special attention.

Let the city purchase an additional batch of buses and decide on which routes to send them, and as a performance criterion, the reduction in the time spent by passengers waiting at stops is taken. It is unlikely that an advantage should be given to the route, which is already characterized by the least loss of time per passenger. Obviously, each additional bus should be directed to the route on which its appearance will provide the maximum saving of time, and the distribution of the entire lot according to this principle will equalize the differences between the routes in terms of the resulting indicator.

In cases where an activity is evaluated that leads to a whole range of results, and also when the results can vary significantly not only in quantity but also in quality, it is advisable to use cost-utility analysis, which is a somewhat complicated modification of cost-benefit analysis. The difference between them lies in the fact that in the analysis of costs and utility, a conditional comparison of similar results is used. It is achieved, as a rule, on the basis of weighting coefficients, most often determined by an expert.

Thus, improved medical care leads to a reduction in morbidity, disability and mortality. Let us assume that a specific measure to improve health care makes it possible, by preventing the premature death of a certain number of people, to provide them with a total A additional years of life, and also leads to a decrease in the cumulative time spent on disability by B years and periods of temporary disability due to illness With years. We can say that this event brings society additional A + B + C person-years of disease-free life. However, the time of illness cannot, of course, unconditionally be equated with the years lost due to premature death. At the same time, when choosing the best option for an event, one should take into account all types of results, and not just one of them, albeit the most important one. Therefore, it makes sense, on the basis of expert assessments, to give indicators BUT, AT and With various weights a, b, c (a > b > c) and then choose the option that has the best ratio of costs to the weighted sum aA + bB + cC. This simplified example provides insight into cost-utility analysis and, in particular, the approach to estimating “quality-adjusted life years” ( QALY), with which such analysis is often carried out in the health sector.

To optimize public spending, it is necessary not only to make the best use of resources in each of the areas of the public sector, but also to reasonably distribute them between areas. To do this, as already noted, it is necessary to compare the results of dissimilar activities that are fundamentally different in nature, and therefore go beyond the analysis of costs and effectiveness. In this framework, the costs are evaluated either in kind or in cash, and the results - in kind or with the help of specially constructed indicators that directly reflect industry characteristics and goals. In a more general case, the task is to measure the costs and results of projects implemented in the public sector in universal monetary terms , just as it happens in the business sector with the help of market prices. The solution of this problem is achieved on the basis of evaluation procedures, which are called cost benefit analysis .

When it is required to measure among themselves, on the one hand, ordinary goods, and, on the other hand, goods that are not subject to purchase and sale, this causes not only serious technical difficulties, but sometimes rejection. Let's go back to an example from the healthcare industry. The result of improved medical care can be the saving of human lives. By the way, the same is true of improving the condition of the road network, which reduces the number of accidents, and many other areas of activity financed by public funds. Is it right to give a monetary value to saved lives, commensurating them, on the one hand, with the resources expended, and, on the other hand, with the results of the work of museums or the expansion of the trolleybus network, for example?

The answer is that cost-benefit analysis should use estimates that are adequate to the real preferences of a particular society and the practice of public choice . If a society actually rates even a slight extension of the life of any of its members immeasurably higher than the work of museums, this means that it prefers to sell museum valuables in order to purchase additional medicines and medical equipment. As soon as a society is not inclined to act in this way, it clearly follows that its preferences are more complex and it is ready to sacrifice some of the opportunities for increasing the average life expectancy in favor of goods that make life richer, more meaningful, more satisfying. Of course, it should be remembered that we are talking about the position of society in relation to shifts in average life expectancy, and not about an individual's assessment of his own life, which is of a different nature.

So, since social resources in practice are not concentrated in any single area or on the achievement of any one, albeit the most attractive goal, then, consequently, society gives different goals and activities only relative, not absolute priority. However, when this happens implicitly, the inconsistency (intransitivity) of the choice is almost inevitable, and hence its irrationality. If allocation decisions are made solely on the basis of intuition, there is, in particular, a great danger that the same factor of well-being will be given a different value in different cases.

The danger increases especially when the influence of special interest groups is felt. Thus, a group interested in increasing purchases of a specific type of medical equipment can effectively lobby for a specific medical program, citing the importance of saving human lives, but at the same time other medical programs, as well as environmental protection and injury reduction measures, on which the reduction also depends. mortality, will not find support. Undoubtedly, it is better when the most diverse projects are explicitly placed in a common row on the basis of a more or less unified and relatively stable system of their comparative evaluation.

The analysis should reflect the usefulness of the respective goods to consumers , in other words, willingness of taxpayers to pay for certain benefits created with the help of the public sector. Of course, apart from the market, this readiness can only be assessed with errors, often conditionally, but even rough estimates can be of significant benefit.

How, in principle, to express in monetary terms the value of the project, the result of which is not the market sale of goods and services at adequate prices? Each project corresponds to its actual cost, but in this case we are interested not only in it, but in the monetary value of the benefits, the comparison of which with the costs would make it possible to judge the feasibility of implementing this project. So, let's temporarily put aside the actual cost (costs) and imagine that the project was carried out for nothing. How highly do consumers rate the benefits delivered to them? In terms of willingness to pay, this question can be reformulated as follows: what is the maximum amount of money taxpayers would be willing to pay in order not to lose the benefits received as a result of the project? If this amount is higher than the actual cost of the project, then the benefits exceed the costs.

It is easy to see that the described approach to assessing the willingness to pay implements the already known principle of determining compensatory change.Alternative (also legitimate) approach to interpreting willingness to pay is based on the idea equivalent change . In this case, the answer is given to the question of what minimum amount of money paid to consumers instead of implementing the project would be equivalent in their eyes to the benefits of the project (the increase in welfare that it would be able to bring in case of its free implementation). For projects of relatively small scale and economic importance, which are most often dealt with, the difference between the two approaches is hardly perceptible, and the willingness to pay function can be considered as an analogue of the usual demand function. Benefits can then be interpreted in terms of consumer surplus as understood by Marshall.

The difference between the monetary benefits and costs of a project is net benefit , a kind of analogue of profit in relation to the public sector. Speaking of this, we must, of course, keep in mind the differences between public costs and benefits and private ones discussed at the beginning of the chapter. Such solutions are to be implemented for which the net benefit is positive and reaches a maximum . When the marginal willingness to pay exceeds the marginal cost, the expansion of the project leads to an increase in the net benefit (this does not mean, however, that it will necessarily be positive; it may be limited to reducing the net loss). The maximum value of the net benefit corresponds to the point at which the marginal cost balances the marginal willingness to pay after the latter has exceeded the former.

Let the issue of creating a new park in the city be decided. For simplicity, let us assume that the proposed projects are qualitatively homogeneous and their differences relate only to the area of ​​the park and, of course, costs. On fig. 11–1 S - square, P - monetary scale, MS - marginal cost AC - average cost per unit area, D" - marginal willingness to pay. Another simplifying assumption is that D" – straight line. S1 corresponds to the first intersection of the lines D" and MS, S 2 – their second intersection at a point E. A - the initial value of the costs (relatively speaking, the cost of a park with an area of ​​1 sq. m.), AT is the initial value of the willingness to pay, With - marginal cost at the area S2, F – average costs for the same area.

As shown in the figure, when the park area is small, the costs exceed the benefits, and if the area is less S1 , the expansion of the project leads to more and more losses. As the area increases from S1 , before S2 , the cost-benefit ratio gradually improves and reaches an optimum at the area S2 . If the optimal option is chosen, then the benefit corresponds to the size of the figure OBES 2 and is S 2 C + 0.5S 2 (B - C) . The costs are equal S 2 F . The net benefit in this example is expressed as a monetary amount equal to S 2 (0.5B + ​​0.5C - F) .

Thus, it is theoretically clear what is meant when one speaks of the monetary value of benefits and their comparison with costs. Let us now turn to a description of some of the problems that arise in the analysis.

As already noted, the composition of social costs and benefits should include an assessment of the positive and negative externalities associated with the analyzed project. However, it is necessary to distinguish, on the one hand, real (or, they are also called, technical) externalities, and on the other hand, monetary externalities.

To understand the difference between them, imagine that a shorter and better highway is drawn between two cities, connected by a previously inconvenient winding road. Among the hypothetical positive consequences of construction, one can point out, in particular, a certain reduction in the cost of products manufactured in one city from raw materials delivered from another, as well as an increase in the income of service enterprises in settlements near which the highway passed. Among the negative consequences of the construction, we mention, for example, the deterioration of the air environment in the area of ​​the new highway and the drop in income for the owners of gas stations and shops located along the old road.

It is legitimate to consider all this as externalities, but their nature is not the same. The shift of demand from one service to another does not in itself mean either a win or a loss for society as a whole. Externalities in this case have redistributive character (recall the airport example from chapter three). Such externalities are called monetary , and it makes no sense to take them into account when determining social costs and benefits.

At the same time, reduced transport costs and environmental damage represent real, “technical” changes affecting efficiency resource use (according to the Kaldor-Hicks criterion). Real externalities need to be assessed as part of costs and benefits.

In practice, it is not always easy to distinguish between real and monetary externalities. After all, many processes contain both elements of changes in the level of efficiency, and elements of redistribution. Another difficult practical problem is related to the choice of the circle of the most significant externalities. As a rule, it is impossible to take into account all external effects without exception. After all, some indirect consequences of the project drag others along, and so on almost endlessly. It is often appropriate to confine oneself to taking into account immediate indirect results.

The considered example allows us to clarify the meaning of two more paired concepts used in the analysis of costs and benefits. The costs and benefits are called tangible , if they appear on the market, and intangible in the absence of direct market manifestations. The reduction in the cost of products and the change in the profitability of service enterprises in this sense are tangible, while the deterioration of the air environment is intangible.

Even when costs and benefits are tangible, as already noted, they often need to be estimated not at actual market prices, but using shadow prices. The latter, in theory, are designed to model the prices that could be formed if all elements of costs and results were realized in perfect markets. The adjustments are designed to eliminate the distortions introduced by monopolies, taxes, underemployment of resources, and so on. However, there are times when direct use of market prices is justified, even if they were not perfect in themselves.

Leaving aside the question of the technical methods of adjustment, we will try to understand its meaning more clearly. Let the construction financed by public spending use materials produced by the monopolist. In this case, it is natural to try to exclude from the composition of costs the rental income extracted by the monopolist. However, this is only justified when, in response to demand from the public sector, the production of these materials is increased. If there is no increase in output, that is, the project uses materials that would otherwise be used in the private sector, then the market price should be used to determine the costs.

Indeed, we are interested in what the project really costs society, in other words, what alternative possibilities it gives up in order to implement this project. Obviously, this is about defining opportunity cost of materials . When the output of materials increases, then for society as a whole, the costs are determined by the costs of resources for the production of their additional quantity. The fact that at the same time some members of society (the owners of the monopolist enterprise) also derive rental income can be regarded as a kind of redistribution. Indeed, compared with the situation of perfect competition, this is a monetary gain of some members of society at the expense of others.

But if the release of materials is strictly limited, then the implementation of a public project involves crowding out some projects carried out in the private sector. Private investors, buying materials at the market price, demonstrated their willingness to pay amounts for their own projects, including the monopolist's rental income. Consequently, the results achieved in the private sector with the help of these materials covered the costs calculated taking into account rental income. If output could not be increased, these results would be sacrificed to the public project. Thus, under the circumstances under consideration, the “inflated” market price of a cost element indirectly reflects the benefits of projects alternative to the one under consideration. Here why in such cases it is advisable to use market prices.

The same opportunity cost principle should also be applied when it comes to “clearing” market prices from taxes. If goods are used in the public sector, the purchase price of which includes a tax, then, in fact, some organizations in this sector pay the tax in favor of other organizations in it (and perhaps even themselves). In most cases, the amount of the tax should be excluded from the calculation of public costs. However, if the production of the taxed good cannot be increased when its use in the public sector as a consumable resource increases, an adjustment in market prices is undesirable for the reason already stated.

Let us now consider a situation where the implementation of a project in the public sector does not require an increase in the production of a resource, but, on the contrary, makes it possible to make fuller use of an existing resource, in particular, labor. The implementation of many projects entails the creation of new jobs and, as a result, a reduction in unemployment. Hiring additional workers requires costs that are in line with prevailing wage rates in the labor market. But what is the society really giving up by involving its members in the implementation of the project? At full employment, the project is fraught with crowding out private investment, and therefore, as in the situations just considered, it makes sense to estimate costs taking into account market prices for the resource (labor rates). However, when there is unemployment, the alternative to the project is the zero results of the economic activity of those who could be employed in it. Equating the relevant components of social costs to zero favors the adoption of projects that reduce unemployment.

It can be argued that in the presence of unemployment, the alternative to employment in the public sector is not only the zero marginal return of labor resources, but also the need to pay benefits to the unemployed. However, these benefits are transfers. The analysis should include the costs and benefits of society as a whole; hence the funds transferred from one of its members to another should be left aside.

At the same time, a zero assessment of the labor components of costs is appropriate only insofar as measures leading to a decrease in unemployment do not cause negative indirect consequences. When implementing large-scale projects, it is possible that the reduction of unemployment in one region is associated with its growth in another or with the acceleration of inflation, which can lead to significant losses for the economy.

So, the key to adjusting market prices in the process of cost-benefit analysis is the ability to determine the opportunity cost of goods. Generally speaking, this should approximate the prices of perfect competition; however, in some cases this approach must be abandoned if alternative uses of resources, in turn, bear a clear imprint of market flaws. In such cases, not adjusting is in line with the “second best” principle.

Perhaps the greatest difficulty in constructing shadow prices is the assessment of goods that do not appear on the markets as objects of purchase and sale. These include, first of all, a variety of public goods. You can try to determine the value of any good for consumers using questionnaires, interviews, expert assessments, etc. Such methods are really resorted to when others cannot be applied. But, of course, such methods are very imperfect, since the estimates obtained with their help are not directly based on the analysis of real economic behavior.

Some possibilities for the economic evaluation of public goods are given by situations in which they act substitutes private benefits. For example, improved water purification in the city water supply eliminates the need for residents to install filters in their homes and apartments. Based on actual and projected spending on individual filters, useful information can be obtained on the willingness to pay for clean water and, as a result, on the social benefits of improved treatment facilities.

Another approach involves identifying the role that intangibles, including public goods, play as resources , used in the production of common goods and services. For example, many projects funded by public spending are aimed at saving taxpayers time. This goal is taken into account, in particular, when solving transport problems. Meanwhile, the economic value of time can be obtained on the basis of hourly wage rates, which show what amounts of money the saved time can in principle be “exchanged for”. Of course, this obscures the distinction between working and free time and does not directly take into account that an increase in the supply of labor would entail a change in its market price. But be that as it may, such an assessment gives some initial idea of ​​the monetary value of the time saved. Further, this estimate can be corrected, just as not quite adequate market prices are corrected in the analysis.

The time saved can be estimated not only as a resource, but also directly as consumer good . The material for this provides, for example, information about the willingness of people to pay a higher price for a trip by high-speed transport compared to conventional. If the allocation of resources in the economy were close to optimal, then the “resource” and “consumer” approaches to estimating the saved time and other intangible benefits would ultimately give identical results. In fact, quite significant discrepancies in estimates are possible, but even establishing a certain range that contains the actual monetary equivalent of the good in question helps the analysis significantly.

Approaches similar in many ways to those used to determine the economic value of time saved are also used to evaluate activities that save lives. These estimates are used in the analysis of medical, environmental, defense and many other projects.

The “resource” approach in this case assumes an assessment on the basis of the marginal productivity of labor, measured by its payment (in this case, of course, adjustments to actual rates can be made). In fact, an attempt is being made to answer the question, what is the increase in national income brought to society by saving one human life. Of course, the attitude towards a person as a resource used by society to create a national income is far from indisputable. However, since we are talking about estimates applied to some abstract, average member of society, it is fair to say that on average it is impossible to spend more on preserving one life than one person produces.

The “consumer” approach to the monetary value of life (more precisely, not life as such, but increasing the chances of its long-term preservation) can be implemented using information about what payment has to be offered in order to attract people to work in high-risk areas. This applies, for example, to business trips to turbulent regions, to work in production areas with a high level of injuries and to dangerous professions. However, claims are often made to the estimates obtained in this way. The fact is that people who choose dangerous work are likely to have a higher propensity to take risks than other members of society, and besides, they do not always have adequate information about the degree of danger and are not always fully aware of it. As a result, estimates may turn out to be somewhat underestimated, but they are undoubtedly useful nonetheless.

Cost-benefit analysis is most commonly used to evaluate investment projects that take more than one year to complete and are designed to deliver benefits long after the costs are incurred. This applies to the construction of airports and power plants, the development of new methods of treating diseases and improving weapons systems, and much more.

Every investor is forced to compare current and future benefits and costs. It is known that the possession of some goods today is valued higher than the prospect of receiving them, for example, in three years. Behind this is both a psychological phenomenon - the preference of current consumption over the future, and economic conditionality: economic growth creates a tendency towards a progressive expansion of the availability of most goods and, consequently, to a decrease in their marginal utility.

Thanks to the existence of the capital market, a private person. by limiting your current consumption to the amount Y 0 , can expect to receive through P years sum Y 0 (1 + r) n , where r - the rate of interest at which money is given to borrowers. Accordingly, the value of the sum Y 1 , which is supposed to be obtained through P years, can be reduced to the initial moment of time using the formula: Y 1 /(1 + r) n . Value r acts as discount rates ("markdowns") of future receipts compared to the present. The same trick is used to present the value of cost items.

Let be B i – measured in monetary terms, the benefits that the project brings to i year from the beginning of its implementation, and C i costs in the same year. Then net benefit from the project, discounted at the time it started , will amount to P years S i ((B i – C i)/(1 – r) i . In some years, especially at the beginning of the project (for example, during the construction period), the benefits In i , can be equal to zero at a high level of costs; in some other periods, costs may be zero, although usually some level of ongoing cost is needed to sustain the project as long as it continues to generate benefits. Be that as it may, it is typical that at first the difference (In i- WITH i) negative and then becomes positive. Other things being equal, the higher the discount rate , that is, the more preference is given to present benefits over future ones, the less attractive are projects that require large initial investments and bring returns only in a relatively distant future .

All this is not new to those who are familiar with the problems of private investment. However, when it comes to the public sector, not only the definition of benefits and costs for each individual year, but also the use of the discount rate to compare them has its own specifics. A private investor focuses on the market price of loan capital, that is, on interest (simply speaking, the investment is more profitable, the more its expected return exceeds what can be obtained by simply placing money in a bank, or, on the other hand, what needs to be given creditor if the investment is financed by borrowed funds). In the public sector, the choice of a specific discount rate requires justification.

There are two approaches to interpreting the social rate of discount. One of them involves trying comparison of current and future consumption from the positions of members of society as consumers of goods and services. Another approach focuses on opportunity cost , that is, on the question of what private investments are being crowded out (replaced) by public ones. If the economy were a set of perfect markets, then both approaches would give the same results (the capital market would accurately record intertemporal consumer preferences), but then, obviously, the public sector would not be needed.

Some proponents of the first approach argued for using a lower discount rate in the public sector than in the private sector (in other words, valuing the prospective return higher than private investors do). As arguments, for example, considerations were given about the “myopia” of entrepreneurial decisions and the fact that for society as a whole, concern for future generations is more important than for individuals.

For the proponents of the second approach, the argument that investing resources in the public sector is justified only if it does not deprive the private sector of the opportunity to use the same resources with greater returns is decisive. Too wide a gap between the public discount rate and that targeted by private investors would mean that the public sector would be willing to finance too many large-scale projects designed to reap benefits over time. The source of financing would presumably be taxes that reduce private investment. Meanwhile, entrepreneurs are often better than government officials at finding profitable, often unexpected, investment options that ultimately accelerate the growth of national income.

In fact, proponents of both approaches accept data on the capital market and returns on private investment as the basis for deriving adjusted estimates, although they apply adjustments that are not the same in nature and scale. Even based on the idea of ​​opportunity costs, one cannot unconditionally accept those rates of return that are characteristic of private investment. Thus, it is desirable to have a clear idea of ​​what kind of potential investment could actually be “crowded out” by the project being evaluated and, accordingly, what market parameters should be taken into account. It is also necessary to take into account, for example, the fact that income from private investments is taxed, so that their return to society as a whole exceeds the benefits directly received by investors.

Having chosen the discount rate, it is possible to determine the net benefit from the project using the above formula, which is usually brought to the time of the analysis. This quantity, called net real value project is used in cost-benefit analysis to justify public investment and compare options.

Many projects implemented in the public sector are associated with uncertainty and risk. Suppose a decision is made to fund scientific research, the end result of which should be a new method of treating an epidemic disease. During the period when the decision is made, it is usually impossible to judge with full certainty either whether the research will lead to the creation of a truly effective method, or the epidemiological situation that will take place after the completion of the study and determine the extent of the practical use of its results. In such situations, it is necessary, when analyzing the project, to take into account the possibility of various outcomes.

Theoretically, the most correct approach, which, however, differs in maximum labor intensity and high requirements for the information used, involves an assessment of the probability of each of the possible consequences of the adoption of the project. If the probabilities are known, quantifiable expected outcome values . Let, for example, the benefits that the project is able to bring in a year k , can take three values: AT 1 k , AT 2 k and AT 3 k with probabilities R 1 , R 2 and R 3 (p 1 + R 2 + R 3 = 1) . Then the expected value of benefits in a given year is R 1 AT 1 k + p 2 AT 2 k + p 3 AT 3 k . If the probabilities are unknown, it sometimes makes sense to give them equal values ​​(in our example, assume that R 1 = R 2 = R 3 = 1/3 ). The net present value of projects, measured against expected outcomes, provides an indication of what to expect from a risky investment.

When several project options are generally comparable in terms of risk, a comparison of their net present value, calculated in this way, allows you to select the best one. Suppose, however, that two fundamentally different projects compete, one of which is associated with a significant risk of losses (that is, expenses that do not lead to a useful result), and the other provides a guaranteed return. At the same time, the net value of the first project is estimated, say, 10% higher than the second. In such circumstances, not only the objectively correct determination of the probabilities and expected values ​​of various outcomes is important, but also the degree risk aversion , which is inherent in the decision maker. In principle, it should reflect the risk preferences of taxpayers, which, as noted in Chapter Nine, manifest themselves in voluntary insurance. Based on the assessment of risk aversion, something like an insurance premium can be calculated, which is included in the costs of a risky project,