The Ex-Ante Economic Analysis of Investments in Large Dams: A Brief History

Abstract

This paper provides an overview of six developments in the ex ante economic analyses of large dams: Adding Systems Analysis; Incorporating Multiple Objectives; Incorporating Environment and Social Losses; Recognizing Economy-Wide Linkages; Modeling Non-cooperative Behavior; and Dealing with Uncertainty. The paper briefly discusses the evolution of each development and summarizes how the research findings have been integrated into the practice of using economic analysis to evaluate potential public investments in large dams. The paper also considers how ex post analyses of dams have been conducted and whether the insights from them have influenced the ex ante analyses that followed that research.