An Assessment of Present State and Possible Improvements of Cost-Benefit Analysis in France

Cost-benefit analysis (CBA) has a long history in France and is quite widely used; every investment funded by the State is now subject to appraisal. CBA implementation is guided by the reports of working teams which are regularly commissioned and issue recommendations every five to ten years. These recommendations provide reference unit values such as the value of time, values for pollution or for carbon dioxide emissions; they provide also some values for parameters like the discount rate or the opportunity cost of public funds, and rules for calculating residual values or choosing the horizon of appraisal, as well as the definition of aggregated socioeconomic indicators. The aim of this paper is to present and discuss the conclusions of the most recent of these working teams, which has made an assessment of the current practice of CBA in France and proposes a large set of improvements. Both technical issues of CBA achievement and issues of CBA governance are addressed.