nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2007‒11‒24
four papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Risk, Delegation, and Project Scope By Andreas Roider
  3. How relevant is targeting to the success of an antipoverty program ? By Ravallion, Martin
  4. The Sydney Olympics, seven years on: an ex-post dynamic CGE assessment By James A Giesecke; John R Madden

  1. By: Andreas Roider (University of Bonn, CEPR and IZA)
    Abstract: This paper studies a partial-contracting model where an agent may provide effort to increase a project’s scope before some later decisions have to be taken. Consistent with existing empirical evidence, we find a positive relationship between exogenous risk and delegation. That is, we show that only if exogenous risk is sufficiently large, the risk-neutral principal may prefer to delegate authority over decisions to the risk-averse agent. Intuitively, for incentive reasons, the principal may optimally want to allow the agent to reduce his risk exposure. Nevertheless, even endogenous risk may be higher when the risk-averse agent has control.
    Keywords: delegation, authority, risk, partial contracting
    JEL: D86 D21 D23 G34 L14
    Date: 2007–10
  2. By: Manuel Portugal Ferreira (Instituto Politécnico de Leiria, Portugal); Sungu Armagan (Florida International University, USA); Dan Li (Indiana University, USA)
    Abstract: Based on a case study of a Portuguese packaging firm, this paper examines how vertical integration of the supplier serves as a vehicle for the full outsourcing of the client firms' needs in a solution that reduces transaction costs, favors specialization, and permits small and mediumsized firms to develop competencies that may be exploited in a wide array of projects. Vertical integration by the supplier (a governance decision) is a strategic response to changes in the sourcing model of the clients. Client-supplier relationships have inter-spatial and inter-temporal value that surpasses spot market exchanges.
    Keywords: strategic outsourcing, vertical integration, internationalization, case study
    JEL: M1
    Date: 2007–09
  3. By: Ravallion, Martin
    Abstract: Policy-oriented discussions often assume that " better targeting " implies larger impacts on poverty or more cost-effective interventions. The literature on the economics of targeting warns against that assumption, but evidence has been scarce. The paper begins with a critical review of the strengths and weaknesses of the targeting measures found in practice. It then exploits an unusually large micro data set for China to estimate aggregate and local-level poverty impacts of the country ' s main urban antipoverty program. Standard measures of targeting are found to be uninformative, or even deceptive, about impacts on poverty and cost-effectiveness in reducing poverty. In program design and evaluation, it would be better to focus directly on the program ' s outcomes for poor people than to rely on prevailing measures of targeting.
    Keywords: Services & Transfers to Poor,Poverty Monitoring & Analysis,Population Policies,Poverty Impact Evaluation,Poverty Reduction Strategies
    Date: 2007–11–01
  4. By: James A Giesecke; John R Madden
    Abstract: A recent development in ex-ante analysis of mega events is the use of computable general equilibrium (CGE) models. CGE models improve greatly on the input-output model, which they have largely displaced, since they incorporate fixed factors and substitution effects. However, like input-output, the method is still subject to the risk of over-optimistic estimation of benefits. We see three sources of such risk: (i) failure to treat public inputs as costs; (ii) elastic factor supply assumptions; and (iii) overestimation of foreign demand shocks via inclusion of "induced tourism" expenditure. In this paper, we undertake an ex-post analysis of the Olympics that addresses each of these risks. We handle the first two directly: public services used to support the Games (such as security services) are treated as Games-specific inputs, and we model the national labour market in full employment. For the third risk, we undertake an historical simulation to uncover the extent, if any, of induced tourism. We find no evidence of an induced tourism effect, and so exclude it from our analysis. With these assumptions, we find the Sydney Olympics generated a net consumption loss of approximately $2.1 billion.
    Keywords: Olympics economic impact, major projects, regional dynamic CGE
    JEL: R13 H43 C68
    Date: 2007–09

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