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Explain why it is necessary for the government to apply a cost-benefit approach to the appraisal of major new road schemes in the UK

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Introduction

Explain why it is necessary for the government to apply a cost-benefit approach to the appraisal of major new road schemes in the UK A cost benefit analysis is the identification, measurement and weighing up of the costs and benefits of a project in order to decide whether or not it should go ahead. It is necessary for the government to use this because it is important that they determine whether or not the project will be detrimental to the economy, society or both. If the costs to society are greater than the benefits to society, then society will end up suffering. This is very important to governments, because of the short term populist voting cycle in many modern democracies. ...read more.

Middle

The government does not want excessive inflation, because it will affect groups of voters adversely. People on fixed pensions (the majority and therefore a more powerful voting bloc) lose, whereas others in better positions (the minority, a less powerful voting bloc) gain. It also raises taxes though fiscal drag, which will not please either of these groups. It redistributes wealth from lenders to borrowers; in inflation the rate of inflation may be well above the interest rate. Lenders are paying a real negative interest rate to borrowers for the privilege of lending to them. This will disadvantage banks and lending institutions and the rate of interest may well be lowered, which does not benefit prudence or reduce people s propensity to invest in banks. ...read more.

Conclusion

and forcing them to eat it would not be viable because it would be too expensive even if it did lower cancer deaths and improve the health of the nation. If a policy is sustainable it allows our generation to meet our own needs without impairing the ability of future generations to meet theirs. This is important because it is in the interest of the government to have a healthy economy and society in the future and not just in the short term. In conclusion, it is very important for a government to use a cost benefit analysis in order to measure the future ramifications on society and to prevent these ramifications if too extreme or condone them if they are a benefit to society. ...read more.

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