nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2007‒03‒10
twelve papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Environmental valuation: a brief overview of options By Giles ATKINSON; Susana MOURATO
  2. Evaluating A Program Of Public Funding Of Private Innovation Activities. An Econometric Study Of FONTAR In Argentina. By Daniel Chudnovsky; Andrés López; Martín Rossi; Diego Ubfal
  3. Evaluating A Program Of Public Funding Of Scientific Activity. A Case Study of Foncyt In Argentina. By Daniel Chudnovsky; Andrés López; Martín Rossi; Diego Ubfal
  5. Walking up the down escalator : public investment and fiscal stability By Easter ly, William; Irwin, Timothy; Serven, Luis
  6. The Hope for Hysteresis in Foreign Aid By Gil S. Epstein; Ira N Gang
  7. Biotechnology as a Competitive Edge for the Finnish Forest Cluster By Terhi Hakala; Olli Haltia; Raine Hermans; Martti Kulvik; Hanna Nikinmaa; Albert Porcar-Castell; Tiina Pursula
  8. Targeted Transfers, Investment Spillovers, and the Tax Environment By Lynne Pepall; Daniel Richards
  9. Measurement of Non-Market Output in Education and Health By Peter C Smith; Andrew Street
  10. Public Voluntary Programs Reconsidered By Thomas P. Lyon; John W. Maxwell
  11. Impact of Municipal Regulations on SMMEs By AFReC; BEES; MCA
  12. Payments for Environmental Services in Costa Rica By Pagiola, Stefano

  1. By: Giles ATKINSON; Susana MOURATO
    Abstract: This paper provides a brief overview of the options available for environmental valuation and is organised as follows. After an introduction, section 2 discusses the concept of total economic value that provides a framework for describing, in economic terms, the ways in which environmental changes might affect peoples’ well-being. Sections 3 and 4 then review the main techniques that have been used to estimate total economic value (or its components). Some of these techniques estimate original values while others make use of (or ‘transfer’ to use the jargon) the findings of existing studies and apply to a new policy or project context. Finally, some concluding comments are offered.
    Keywords: Environmental valuation, Cost-benefits analysis, Benefit transfers
    JEL: H43 G23 D61
    Date: 2007–03
  2. By: Daniel Chudnovsky (Centro de Investigaciones para la Transformación (CENIT).); Andrés López (Centro de Investigaciones para la Transformación (CENIT).); Martín Rossi (Universidad de San Andrés); Diego Ubfal (Inter-American Development Bank)
    Abstract: The paper contains and impact evaluation of matching grants to promote investments in innovation on firm financed R&D and other output variables.
    Keywords: innovation, matching grants, program evaluation, fixed effects, common support, Latin America, Argentina.
    JEL: O32 O38 C23
    Date: 2006–12
  3. By: Daniel Chudnovsky (Centro de Investigaciones para la Transformación (CENIT).); Andrés López (Centro de Investigaciones para la Transformación (CENIT).); Martín Rossi (Universidad de San Andrés); Diego Ubfal (Inter-American Development Bank)
    Abstract: The paper contains an impact evaluation of research subsidies on the academic performance of researchers in Argentina.
    Keywords: scientific research, program evaluation, propensity score matching, Latin America, Argentina.
    JEL: H50 O38
    Date: 2006–12
  4. By: Jean-Paul Faguet; Fabio Sánchez
    Abstract: The effects of decentralization on public sector outputs is much debated but little agreed upon. This paper compares the remarkable case of Bolivia with the more complex case of Colombia to explore decentralization’s effects on public education outcomes. In Colombia, decentralization of education finance improved enrollment rates in public schools. In Bolivia, decentralization made government more responsive by re-directing public investment to areas of greatest need. In both countries, investment shifted from infrastructure to primary social services. In both, it was the behavior of smaller, poorer, more rural municipalities that drove these changes.
    Date: 2006–03–25
  5. By: Easter ly, William; Irwin, Timothy; Serven, Luis
    Abstract: Fiscal adjustment becomes like walking up the down escalator when growth-promoting spending is cut so much as to lower growth and thus the present value of future tax revenues to a degree that more than offsets the improvement in the cash deficit. Although short-term cash flows matter, a preponderant focus on them encourages governments to invest too little. Cash flow targets also encourage governments to shift investment spending off budget, by seeking private investment in public projects-irrespective of its real fiscal or economic benefits. To evade the action of cash flow targets, some have suggested excluding from their scope certain investments (such as those undertaken by public enterprises deemed commercial or financed by multilaterals). These stopgap remedies might sometimes help protect investment, but they do not provide a satisfactory solution to the underlying problem. Governments can more effectively reduce the biases created by the focus on short-term cash flows by developing indicators of the long-term fiscal effects of their decisions, including accounting and economic measures of net worth, and where appropriate including such measures in fiscal targets or even fiscal rules, replacing the exclusive focus on liquidity and debt.
    Keywords: Public Sector Expenditure Analysis & Management,Public Sector Economics & Finance,Investment and Investment Climate,Economic Stabilization,Fiscal Adjustment
    Date: 2007–03–01
  6. By: Gil S. Epstein (Bar-Ilan University); Ira N Gang (Rutgers University)
    Abstract: We argue that a purpose of foreign aid is to whet the appetite of the recipient in order to bring about a long term commitment to what the donor perceives as a need, but which the recipient may rank lower down on his list of undertakings, or may be sufficiently resource constrained as to be unable to start the project. In other words, we explore the implications and conditions for success of a donor trying to affect long-term recipient policy by creating path dependence. Once the project is established, aid can be removed without reversing the process that has been set in motion. Quite simply, the donor wants its project to stick. We place a formal structure on this.
    Keywords: foreign aid, rent seeking, governance, decentralization
    JEL: O10 O19 F35
    Date: 2006–12–01
  7. By: Terhi Hakala; Olli Haltia; Raine Hermans; Martti Kulvik; Hanna Nikinmaa; Albert Porcar-Castell; Tiina Pursula
    Abstract: In this study we have collected information by interviewing all identified parties within the Finnish forest sector who might have a potential biotechnology connection : university research groups, research institutions, small and medium-sized biotechnology-companies and up to the largest forest companies. The ultimate goal was to assess how resources have been allocated and biotechnologies utilized within the value chain of the entire forest sector. This study aimed at providing answers to the following questions : • What are the current Finnish academic resources and projects related to forest industry biotechnology? • How much does the Finnish forest cluster invest in biotechnology R&D activity, and what are the key application areas in the value chain? • How well do the academic resources, company R&D investments and research needs converge to help secure the future competitiveness of the Finnish forest industries? In order to answer the questions above, the study approached the matter in consecutive steps. First, the existing forest industry related biotechnological knowledge base within the academia on one hand, and the resource base among firms on the other hand, were mapped. Following up on that, we evaluated the sales expectations of forestry related biotechnological applications within the domestic forestry cluster itself, other potential domestic industries and global export markets. The third step assessed whether the development of forestry related biotechnological applications is justifiable in the framework of comparative advantage. This was accomplished by comparing the relevant existing knowledge and other resource bases to their sales expectations. In order to evaluate the potential of biotechnology in the entire forest industry value chain, the study assessed four value chain modules. Module 1 represents the beginning of the value chain : forestry applications. Module 2 consists of the development of wood products, module 3 is related to the pulp and paper industry, and module 4 to utilization side streams for bioenergy, biochemicals and other food or pharmaceutical applications. The assessment of module 1 implies that there is a constant lack of resources. Basic research conducts some relatively long projects, which often seem too time-consuming in applied research and corporate R&D. There seems to be only few active links between the academic research projects and companies. Many new technologies already exist but since the individual forest owners hardly have incentives to invest in R&D due to e.g. the long breeding cycle, collaboration with companies seems as the only potential pathway to commercialization of forestry related biotechnologies. There were few biotechnology-based projects within the module 2. The research and product development seems to focus on physical modifications, and composite research is based on chemistry. Module 3, paper, pulp and board industry, seems to be the most active in research and product development activity. Their products generate positive cash flows, and research projects are abundantly funded. The companies are closely involved in the research projects as financiers and collaborators. This involvement impacts on the nature of the research, which seems highly applicable and linked closely to industrial applications. Consequently, biotechnology applications are already used in the pulp and paper industry. Some biotechnology applications are adopted rapidly. They, such as enzymes in reducing paper machine runnability problems, do not affect the quality of the fibers, intermediate or end products and are thus easier to take into use in production scale. We observed the research and product development within module 4 as a high priority for both the academia and industry. The research is anticipated to grow strongly and even more than in other modules. Biotechnologies are applied as substitutes to chemical and thermal technologies. However, all of these fields of technology are developed and applied by the industry. This provides some important implications for technology development and innovation policy. Due to the fuzziness between technology border-lines, it seems misleading to prioritize biotechnologies over some other technology; in contrast, the most efficient technology should be preferred. Accordingly, technology subsidies might be most efficient if the public technology programmes would be based on application segments instead of a specific technology. Our assessment of international patenting activity raised some interesting notions. Finland seemed to be comparatively most specialized in plant genetic engineering, food and food additive, and waste disposal and the environment applications. However, biotechnology based biofuels are not included as a source of comparative advantage, which also stresses the importance of parallel development of biotechnologies and other technology fields. A potential source of value creation could be the utilization of process side streams more efficiently, including refinement of by-products such as tall oil, to products with higher value added in other application areas.The paper and board making might also be strongly influenced by new packaging solutions, materials and methods; these utilize, however, only rarely or never biotechnologies as such. Finland has a good overall and mainly publicly maintained infrastructure. If the raw material’s high quality and some special features can compensate the relatively low growth rates, Finland should be able to attract the multinational pulp and paper industry also in the long term. We conclude that the development of biotechnologies should not contain any intrinsic value per se. The commercial value of the biotechnology could be benchmarked with the value of alternative technologies; and consequently, biotechnology could become part of the technology options for companies active in established and conventional industries. The Finnish forest cluster has financial resources to commercialize any new technology that can increase the process efficiency or provide other economic benefits in new application areas. This is a reason why we see this area exceptionally promising compared to any other high technology field without such a financial backbone.
    JEL: L69 O32 O34
    Date: 2007–03–05
  8. By: Lynne Pepall; Daniel Richards
    Abstract: We examine the informational role of targeted tax transfers used by local governments to attract corporate investment projects. The transfer may potentially be used to solve an information externality in which subsequent investments that follow the initial project may fail to occur even though they are profitable. The targeted transfer may be used to signal the profitability of such ancillary investments and thereby attract them. We show that this signaling role implies that an environment of either generally high corporate tax rates or low gains from secondary investments paradoxically yields an equilibrium in which the necessary government subsidy is lower.
    Keywords: taxes, transfers, externalities
    JEL: H23 H25
    Date: 2007
  9. By: Peter C Smith (Centre for Health Economics, University of York); Andrew Street (Centre for Health Economics, University of York)
    Abstract: In recent years considerable progress has been made in developing improved methodologies to measure non-market output in the National Accounts. Most EU Member States have supported the introduction of a legal framework to implement these methodologies and have introduced current best practice methods to measure output of health and education services. This report summarises contributions at a Workshop held in October 2006 that focussed on building on this foundation and further improving the measurement of non-market output in the National Accounts. The Workshop supports a project intended to provide detailed international guidelines for the further development of volume measures of non-market outputs, in particular for education and health.
    Date: 2007–02
  10. By: Thomas P. Lyon (Ross School of Business, University of Michigan); John W. Maxwell (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)
    Abstract: “Public voluntary programs” (PVPs) involve government offers of positive publicity and technical assistance to firms that reach certain environmental goals. A growing body of empirical evidence suggests these programs often have little impact on the behavior of their participants. A natural policy conclusion would be to eliminate these programs, but this paper offers several reasons not to jump to such a conclusion. We first present a political-economic framework in which PVPs are viewed as modest subsidies used when political opposition makes stronger environmental regulation infeasible. We then explore the design of PVPs in detail, showing how PVPs can potentially enhance the diffusion of cost-effective techniques for pollution abatement, so long as the information involved is not competitively sensitive. Identifying the effects of PVPs econometrically is difficult because information is likely to diffuse to non-participants. Thus, after the early phases of even a successful PVP, it may well be impossible to detect a difference in performance between participants and non-participants.
    Date: 2007
    Abstract: Abstract: The regulatory impact of municipalities on small enterprise is inextricably linked to their developmental and service delivery roles. A general lack of information about municipal regulations and their enforcement was also discerned among the small businesses interviewed. The most significant distinctions of four categories of micro, very small, small and medium enterprise are as follows: – Micro survivalist and micro non-survivalist businesses also classified as the informal sector. This category requires a specialised focus through standardised regulations and transparent and predictable service delivery arrangements. Where possible, targeted support for certain, highly viable micro businesses could assist them in becoming formalised and graduate to the very small status. – Very small businesses are on the threshold of becoming more established, small or medium enterprises. They are already formalised which means that the initial regulatory barrier posed through licensing and zoning applications has been crossed. This category requires municipal support in the form of business advice, training and reliable provision of utilities. – Small and medium enterprises stand to gain significantly from effective supply chain management policies of municipalities that rely on unbundling of larger projects, capacity building of businesses and regular monitoring and evaluation of the regulatory environment. A range of recommendations to enhance municipal regulatory role is offered in this paper.
    Keywords: small enterprises, regulatory impact, municipal regulations
    JEL: A1
    Date: 2006–05
  12. By: Pagiola, Stefano
    Abstract: Costa Rica pioneered the use of the payments for environmental services (PES) approach in developing countries by establishing a formal, country-wide program of payments, the PSA program. The PSA program has worked hard to develop mechanisms to charge the users of environmental services for the services they receive. It has made substantial progress in charging water users, and more limited progress in charging biodiversity and carbon sequestration users. Because of the way it makes payments to service providers (using approaches largely inherited from earlier programs), however, the PSA program has considerable room for improvement in the efficiency with which it generates environmental services. With experience, many of these weaknesses are being gradually corrected as the PSA program evolves towards a much more targeted and differentiated program. An important lesson is the need to be flexible and to adapt to lessons learned and to changing circumstances.
    Keywords: Payments for Environmental Services; Costa Rica; FONAFIFO
    JEL: Q58 Q25 Q20 Q57 Q50 Q28 Q23
    Date: 2006–12–20

This nep-ppm issue is ©2007 by Arvi Kuura. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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