Abstract
In general, the techniques of the policy evaluation are classified into two categories: ex-ante evaluation and ex-post evaluation. The role of the ex-ante evaluation is to remove the inefficiency in the allocation of the scarce budget. On the other hand, the role of the ex-post evaluation is ambiguous and its methodology is not well established. However, it is also true that the ex-post evaluation is strongly requested for the efficient public investment. Therefore, this paper aims to answer the following questions: “What is the role of the ex-post evaluation and which kind of methodology is needed?”
Based on the contract theory, we analyzed for the mechanism which induces the undistorted implementation of the ex-ante evaluation. Further, we examined the role of the ex-post evaluation interpreting the results of the model analysis. From the results, we concluded that i) the role of the ex-post evaluation is to give the incentive for the undistorted implementation of the ex-ante evaluation to the analyst who implements the ex-ante evaluation, and ii) the methodology of the ex-post evaluation is one of the following two: to measure the realized social net benefit or to confirm the probability of the realized social state in the ex-ante forecast.
