Methodological Approaches to the Assessment of Public Goods Produced by Rural Economies

Issue № 8, 2022, article № 2, pages 11-21

Section: Agrarian policy: problems and decisions

Language: Russian

Original language title: МЕТОДОЛОГИЧЕСКИЕ ПОДХОДЫ К ОЦЕНКЕ ОБЩЕСТВЕННЫХ БЛАГ, ПРОИЗВОДИМЫХ СЕЛЬСКОЙ ЭКОНОМИКОЙ

Keywords: PUBLIC GOODS, RURAL ECONOMY, ESTIMATED VALUE, PAYABLE DEMAND, OPPORTUNITY COST, COST PRINCIPLE, TRANSFERS, POLICY COSTS

Abstract: Value of public goods produced by the rural economy is relevant for two reasons. Firstly, to more accurately reflect its contribution to the gross welfare in comparison with other sectors (which is important for elaborating balanced strategies for the development of the country's economy). Secondly, to study the feasibility of reimbursement of its costs due to the incremental production of public goods. The paper reviews the principles of evaluation applied or applicable to the evaluation of public goods created by the rural economy. Their list is supplemented by the principle of policy costs, which, in comparison with others, is better aligned with R.Coase's arguments about financing public goods through taxes. A technique is proposed that implements this principle, based on a questionnaire survey of experts. In the application to the rural economy, the considered principles are ranked according to the criteria of objectivity, accuracy, laboriousness of assessment and data availability. Furthermore, the paper justifies the predominant use of the principles of hidden transfers and policy costs for evaluation in order to access the contribution of the rural economy to public welfare. To justify the reimbursement of the increase in the production of public goods of the rural economy, it is recommended to compare the assessment according to the cost principle with the assessment according to the principle of policy costs: the amount of financing of the increase should be such that the first of them does not exceed the second.

Authors: Svetlov Nikolai Mikhailovich