ISSN: 2173-8254

Nº 28 June 2025

Economic Evaluation of Infrastructure Policies, Programs, and Projects

Public policies should be subject to economic evaluation prior to their approval. Their social value derives from their impact on the well-being of the individuals who make up society. The implementation of major investment projects in economic and social infrastructure—as well as other interventions that significantly affect citizens’ well-being—must be accompanied by the identification and quantification of their social benefits and costs. Although there appears to be broad consensus among social actors on the need to evaluate public policies before implementation, such unanimity may in fact reveal a lack of shared understanding of what economic evaluation truly entails. In the economic literature, however, the matter is well established. Cost-benefit analysis is the most robust methodological tool available for the ex ante economic evaluation of public policies, and its methodology is thoroughly developed in an extensive body of literature. It is essential to distinguish cost-benefit analysis from impact studies and other reports often used by policy advocates to justify decisions already made under the guise of scientific rigor. The primary objective of this work is to explain the nature of cost-benefit analysis as applied to public policies and infrastructure investment projects, and to present its theoretical foundations as a basis for practical application. This work may be viewed as a guide to the basic economic principles and analytical framework underpinning international best practices in policy evaluation.