Project appraisal and income distribution

In spite of much lip service being paid to the equity and employment objectives, these objectives continue to be sacrified to the objective of increasing aggregate income. The first part of this paper criticizes three of the most commonly accepted justifications of the neglect of income distribution. The second part discusses the more recent attempt of incorporating income distribution weights in social cost-benefit analysis. It is argued that the result of this attempt has been satisfying neither to science nor to conscience. Blame is laid on the persistent tendency to aggregate costs and benifits accruing to highly heterogeneous social groups, as well as the tendency to replace unquantifiable phenomena by quantifiable ones.