This book provides an original framework to assess public investment policies co-financed by Union (Federal) governments. This framework is applied to two important case studies: the EU Cohesion Policy and the US Federal Investment Policies.

Cost-Benefit Analysis of Multi-Level Government sheds light on a number of outstanding issues of economic theory by extending the theory of shadow prices, and provides guidance to real-world decision makers. In particular, the following questions are addressed:

• Under which theoretical circumstances, higher level government intervention in Member States through investment policies is justified?

• Is there any new welfare economics rationale underpinning interregional equity? What is the relationship between interregional and interpersonal income distribution? How can social exclusion be included in cost-benefit tests?

• How can higher level government budget funds to investment policies before it bargains programming documents with lower tiers of government by considering also their response function?

• In these circumstances, how can optimal matching rates be derived assuming binding and non binding budgetary constraints?

• Can such a theoretical framework be applied for guidance to real-world decision makers?

The book will be of interest to policy makers, postgraduate students and researchers in cost-benefit analysis, welfare economics, public choice, public finance, multi-level government economics, and income distribution issues.