Do Cost-Benefit Analyses Really Influence Transport Investment Decisions? Experiences from the Swedish National Transport Investment Plan 2010-2021

This paper discusses how cost-benefit analysis (CBA) for transport investments is particularly useful for situations where a large number of investments have to be ranked against each other. The paper draws on experiences from the development of the Swedish National Transport Investment Plan 2010-2021. The authors study how CBA results were used in the process of shaping the investment plan and what influence they had on investment decisions. The authors show that planners’ selection of investments is fairly strongly governed by benefit-cost ratios, in particular for low and moderate benefit-cost ratios. Politicians’ investment selection, on the other hand, does not show any sign to be affected by benefit-cost ratios. By interviewing planners and decision-makers about how CBA was used in the process, the authors clarify what role CBA actually played in the planning process. We find that not only did the CBAs play a role for the selections, they also helped developing more cost-efficient investments. Further, the authors explore planners’ implicit valuations, as revealed by their investment selections. The authors find that freight benefits were implicitly valued higher and traffic safety lower than the officially recommended CBA weights. Finally, the authors identify the most important areas for improvement of CBA state-of-practice methodology.