Friday, 10 June 2016

What is the multiplier effect of this government spending?

From the NAO, The Sale of Eurostar, 

In 2015 the Government sold its share in Eurostar.  Here's the NAO report.

In April 2014 the DfT appointed Freshfields as its legal adviser. The focus of Freshfields’ initial work was to transfer the shares from DfT to another government department. Eurostar was part of a consortium bidding for the East Coast franchise, which DfT was awarding later in 2014, so it was agreed that to avoid any perceived conflict of interest the shares should be transferred away from DfT. The legal advisers were originally asked to prepare to transfer the shares to the Department for Business, Innovation & Skills (BIS) but a few weeks before the transfer took place the government decided to transfer the shares to HM Treasury instead.

How much did this cost? Freshfields charged £0.511m for this task (figure 9, p.23).  The NAO says that the money was good value and there was no overcharging etc.  But I wonder what the multiplier effect of this spending was?

Behavioural Economics versus (Rational) Economics

I liked this slide as a summary of differences from a World Bank Conference on the State of the World.