This book has become one of the classics of development literature in the 22 years since its original publication. The conceptual framework, the underlying principles, and the methods for estimating the relevant shadow prices have found wide acceptance. Its central ideas have been included in the guidelines of several development assistance agencies, including an official policy statement issued by the World Bank in 1980. It has also been widely used as a basic text in university courses on development economics. The authors recommend a more systematic and consistent estimation and application of shadow prices than many traditional methodologies used in the evaluation of development projects. They also favor and describe methods for calculating rates of return that take explicit account of the impact of a project on the distribution of income within a country, both between investment and consumption and between rich and poor.