Precision Assessment of the Economic Impact of Public Projects: An Analysis of the Expenditures

The present article presents an additional refinement of the input-output approach to the evaluation of the economic implications of spending on public projects. The methodology covered in this paper involves gathering more detailed information on the structure of the expenditure of contractors who participate in bidding. Such estimates should contribute to the reliability of the impact evaluation. More specifically, the method links the specific tasks of the project specifications to the operating budgets of the main contractor and the sub-contractors. The analysis provides more reliable estimates of employment generated by undertaking the project. Investigation of the detailed requirements of the public projects and the operating budgets of the contractors enables the preparation of the "shopping-list" for different projects. Allocation of the tasks as final demands or uses permits the in-depth study of the macro-economic implication of the projects at the sectoral level.