THE PAKISTAN DEVELOPMENT REVIEW
Public Sector Investment Planning for Developing Countries By E. V. K. FitzGerald. London : MacMillan Press Ltd. 1978. xv + 200 pp.Price : £ Stg. 3.50.
While the book under review provides a critical evaluation of cost-benefit analysis, it mainly focuses on the relevance and utility of project evaluation techniques for development planning. It has been argued in the book that no project can be meaningfully evaluated in isolation because its impact not only is confined to the project itself but tends to spill over to other projects as well. Such spill-over effects become all the more critical when the induced economic effects of that project are not marginal. In addition to the interdependence between projects, the author has drawn attention to an oft-neglected but very important aspect of cost-benefit analysis: Shadow prices are not very meaningful in the context of project evaluation exercise in the real world if they are computed without considering the structure of the economy, the pace of development and income distribution.