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The module 5 corresponds to the Fiscal, Financial and Economic Analysis (FFEA) of LAPs which contains elements of the three main modules.

Module 5: Fiscal Financial and Economic Analysis (FFEA)

The importance of FFEA

The aim of this section is to present the main concepts and empirical observations from which the cause-effect relations that lead to the fiscal, financial and economic benefits of LAPs are developed.

As seen in the various modules of this tool, not all LAP results can be translated into financial resources. It is therefore necessary to measure results that can be translated into monetary values with the aim of determining the feasibility of the LAP in relation to the Net Present Value (NPV) of flows and the Economic Rate of Return (ERR), through the Fiscal, Financial and Economic Analysis of LAPs. By determining flows, an increase in cash flow can be carried out which can be used to determine the increase caused by the action of the project. To carry out this type of analysis, the tool is based on the preliminary work of S. Pagiola (1999)1 and the recommendations of P. Belli and J. R. Anderson (2013)2.

The guide to carrying out cost-benefit analyses (CBA) shows practical examples for measuring the economic and financial benefits of LAPs.

The importance of FFEA for governance

The Land Governance Assessment Framework (LGAF) on Theme number 1, corresponding to the Legal and Institutional Framework, emphasizes the importance of estimating the costs of implementing land policies and comparing them with the benefits they bring with them. This framework similarly emphasizes the importance of ensuring that governments have sufficient financial resources to be able to implement policies of this type (LGI-6).

Theme 4 of the LGAF, concerning the public provision of land information, also highlights the need to take into account the costs of land administration services, stressing the importance of their efficiency, accessibility and sustainability.

Notes

1 Pagiola, S. (1999).
2 Belli, P., & Anderson, J.R. (2013).