The paper is too tong for conveying the messagethat shadow pri~ing used as a method of analysis in micro-economic issues of project selection is also useful for analysing macr8.economic issues, such as foreign and domestic borrowing by the government, eihigration, etc. Much of the methodological discussion in the paper is available in a readily accessible form in several publications of each of the coauthors. In contrast, the specific application of the methodology to Pakistani problems is much too cavalier. While it is hard to disagree with the authors' claim that shadow pricing "constitutes a relatively informal attempt to capture general equilibrium effects" (p. 89, emphasis added), their depiction of traditional analysis is a bit of a caricature: . essentially it sets up a strawman to knock down. Mter all in the traditional partial equilibrium analysis, the caveat is always entered that the results are possibly sensitive to violation of the ceteris paribus assumptions of the analysis, though often the analysts will claim that extreme sensitivity is unlikely. Analogously, the shadow pricing method presumes "stationarity" of shadow prices in the sense that they are "independel).t of policy changes under review" (p. 90). The essential point to be noted is that the validity of this assertion or of the "not too extreme sensitivity" assertion of partial equilibrium analysts can be tested only with a full scale general equilibrium model! At any rate this reviewer would not pose the issue as one of traditional- partial equilibrium macro-analysis versus shadow pricing as an approximate general equilibrium analysis, but would prefer a description of project analysis as an approach in which a macro-generalequilibrium model of a manageable size (implicit or explicit) is used to derive a set of key shadow prices which are then used in a detailed micro -analysis of projects. The formulae for CRI, ARI, etc. are reproduced (with some terse attempts at their derivation) from other publications. This re~der is not persuaded that the paper will be any less intelligible if just a brief description of the role of CRIandARI and the procedure of their computation is given. If a derivation is to be givenat
