ABSTRACT
Soil- and water-based development projects are complex activities that involve many technical linkages, affect many people’s lives, and are very difficult to value. Market prices may be highly distorted by institutional factors and markets may not even exist for some factors. Social cost-benefit analysis (SCBA) was developed in the 1960s to meet many of these problems and allow decisionmakers to allocate scarce investment resources in a globally, socially optimal pattern. It fell out of favour in the late 1970s when it over-reached itself in terms of claiming to offer technical closure to political questions. In the 1990s, SCBA has revived and taken to heart the challenges of valuing the physical environment. In this revived form, it can assist in evaluating soil- and water- based development activities at any stage in the project cycle. The chapter describes SCBA principles and practice and offers examples of small water-based projects in northern Pakistan.
