Assessing the welfare impacts of public spending

Many policy decisions are now based on quantitative assessments of the impacts of public spending on living standards, particularly of the poor. How reliable are such assessments? This paper surveys the methods most often found in practice. These can be classified into "benefit incidence studies" and "behavioral approaches." Both have their strengths and weaknesses. Some recent studies usefully combine the two approaches. In delving into the current state of the subject, an attempt is made to identify some of the limitations of current practices and draw implications for best practice in future work. (C) 1998 Elsevier Science Ltd. All rights reserved.