THE CASE FOR USING COST BENEFIT ANALYSIS TO EVALUATE THE SUPPLY OF PUBLIC GOODS IN THE MARITIME INDUSTRY

Abstract

In an era in which economists have rediscovered their belief in the economic efficiency of free markets and espoused privatization as a policy means of achieving these benefits, perhaps it is advisable to consider some of the difficulties markets have in supplying public and merit goods. In the following article, the case of the Hydrographic Service is used to illustrate the problem of relying on free markets to provide maritime safety services and the difficulties of using traditional accounting methods to assess the adequacy of that provision. It is also argued that the technique of cost benefit analysis should be used to assess the adequacy of the supply of public goods and a framework is suggested for the evaluative structure.