Cost-benefit analysis of brownfield developments

Abstract

In Hungary the industrial structure has changed and depressed industrial areas have developed thanks to the lack of resources and the careless industrial policy. In 2000, the Hungarian legislators listed 6 subregions into this category based on the following indicators:

• in 1990 share of employment in the industry was more than one and a half times the national average,
• decline in industrial employment between 1990-1999
• and unemployment above the national average.

In 2004 Ballabás-Volter expanded the number of these subregions to 11 by adding the difference in migration to the indicators (instead of the unemployment rate). Setting up the above mentioned category they did not take into account the brownfield belts, the results of the changes in the industrial structure, which are most typical in Northern Hungary and Southern Transdanubia. The basic hypothesis of my investigation is that the revitalization of brownfield sites in Hungary did not emphasize enough job creation and putting these areas back on economic growth track. The legislators paid great attention on employment when they defined the depressed areas. The money spent on the revitalization of brownfield areas was not very effective due to insufficiently conceptualized revitalization as a concept. To support my hypothesis, I have done a cost-benefit analysis. The significance of this research topic was also pointed out by Tölle et al. (2009). The public sector (central government, local government, support decision-making authority) is obliged to do the economic-social cost-benefit analysis of brownfield revitalization projects.