POVERTY-ORIENTED COST-BENEFIT APPROACH TO THE ANALYSIS OF DEVELOPMENT-PROJECTS

This essay presents a form of cost-benefit analysis where benefits are defined in terms of contributions to basic human capabilities. This c apabilities approach to project analysis is contrasted with the US Age ncy for International Development's logical framework approach, the Wo rld Bank's economic cost-benefit approach, and distributionally sensit ive economic cost-benefit analysis. I argue that international develop ment agencies' concessional resource transfers could contribute more t o the well-being of the world's poor if guided by this cost-benefit ap proach than they do under current arrangements. The notion of capabili ties as fundamental requirements for well-being has been developed by Amartya Sen.