Methodology for impact evaluation of the administrative division with a cost-benefit analysis

Abstract

The article includes an example of using cost-benefit analysis to assess the projects of a division of local provinces. The elements of financial and economic analysis and new tools for the analysis of external effects of the proposed administrative changes are presented. The theoretical considerations may form the basis of research and empirical analysis, taking into account issues of regional development policy and socio-economic cohesion of the regions. The use of cost-benefit analysis extends the use of this methodology for assessing the impact of changes within territorial units in Poland. In the analysis the theory about the absorption of active and passive funds by region was included. The article emphasizes the need to incorporate variable analysis such as the rating of the region, the tendency of domestic and foreign direct investment, the capacity development of enterprises, network of economic and functional development potential of municipalities and counties, the costs of social change in the structure of the administration, transaction costs associated with the rupture business networks and functional social costs associated with the reduction of the development potential of the region and social capital. The active and passive absorption of funds theory was included to analyze separate regions. The aspects of current policy planning and development programming using the European Union structural funds were also included. The methodology takes into account the necessity of accepting the assumptions resulting from the current legal status and portraying shifts in the level of allocation of financial resources. The presented methodology can be a starting point for comparing positive and negative effects of the proposed changes.