Abstract

While cost-benefit analysis allows superior economic evaluation compared with previous techniques, its approach to evaluating alternatives gives scope for unsatisfactory manipulation. Omission or cursory treatment of alternatives may reduce the status of the analysis to that of a ""rubber-stamping"", while shadow pricing may give a falsely favourable value to projects to which no positive alternative is specified. Both tactics have been applied in past evaluations of British forestry. In developing countries, the balanced appraisal of highly beneficial alternatives is hampered by narrowly sectoral objectives and definition of projects. Often when a project is chosen on technical grounds and justified by cost-benefit analysis, it proves that more desirable means to a given end can be distinguished, and even alternative objectives may bear consideration. Alternative institutional arrangements are also important, given the avowed income redistribution objectives of governments