SMART researchers have once again proved that they are the best of the best.
Economist Joe Branigan, a senior research fellow at SMART, and associate research fellow Dr Fariba Ramezani have won the John Dickinson Memorial Award for best article in the Australasian Journal of Regional Studies for 2018.
Their paper was based on work they completed for the Illawarra Business Chamber, evaluating the economic impacts of the proposed South West Illawarra Rail Link (SWIRL), as well as previous theoretical work related to evaluating public infrastructure projects.
This long-discussed plan to link the Illawarra to the Sydney train network near Picton – also known as the Maldon-Dombarton link – was evaluated using two established methods.
Cost benefit analysis (CBA) and economic impact analysis (EIA) are widely used by governments to estimate the real social value of a project (CBA) and its regional impacts (EIA).
While CBA may estimate the real social value of a project, it does not necessarily take account of the regional impacts on employment and growth. Thus, it may not be adequate to properly measure regional impacts against related government policy objectives.
This is where CBA has to be combined with EIA techniques.
The paper reviewed the advantages and disadvantages of both approaches, using SWIRL as a case study.
“I think the paper was recognised with this award because it was timely and useful for policy makers and infrastructure professionals; there is currently a lot of debate around infrastructure investment and how governments evaluate competing projects,” Mr Branigan said.
“Essentially, governments only have a certain amount of money (a hard budget constraint), so they have to prioritise how they spend their money.
“I think the reason this paper has been recognised is that it sets outs when and how to use both methods and how to apply them to a specific, regional project.”
Mr Branigan said such analysis was particularly useful for new, relatively independent government organisations such as Infrastructure Australia and Infrastructure NSW, in helping them identify which projects deserved funding.
Dr Ramezani said it had been a privilege to work on the project with Mr Branigan, and said she was thrilled that their paper was picked as the best by the editorial board of the Australasian Journal of Regional Studies.
“The Australian governments always support the growth of regional economies as one third of Australians live and work outside capital cities.
“However, the limited public resources call for a precise and comprehensive evaluation of alternative public infrastructure projects. Such evaluation needs to be able to reflect government policy objectives as well.
“I hope moving from making policies based on traditional cost benefit analysis only to more comprehensive evaluation methods can help the governments to choose more efficient projects and lead to stronger regional economies.”