nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2009‒12‒11
five papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Crushed Aid: Fragmentation in Sectoral Aid By Frot, Emmanuel; Santiso, Javier
  2. Cairo Evaluation Clinic: Thoughts on Randomized Trials for Evaluation of Development By Karlan, Dean
  3. Accounting and economic measures:An integrated theory of capital budgeting By Carlo Alberto Magni
  4. Evaluation of the Impact of the Mother and Infant Health Project in Ukraine By Nizalova, Olena Y.; Vyshnya, Maria
  5. Low Income Shelter Financing in Slum Upgrading: India Urban Initiatives By Sally Merrill

  1. By: Frot, Emmanuel (Stockholm Institute of Transition Economics); Santiso, Javier (OECD Development Centre)
    Abstract: This paper measures and compares fragmentation in aid sectors. Past studies focused on aggregate country data but a sector analysis provides a better picture of fragmentation. We start by counting the number of aid projects in the developing world and find that, in 2007, more than 90 000 projects were running simultaneously. Project proliferation is on a steep upward trend and will certainly be reinforced by the emergence of new donors. Developing countries with the largest numbers of aid projects have more than 2 000 in a single year. In parallel to this boom of aid projects, there has been a major shift towards social sectors and, as a consequence, these are the most fragmented. We quantify fragmentation in each aid sector for donors and recipients and identify which exhibit the highest fragmentation. While fragmentation is usually seen as an issue when it is excessive, we also show that some countries suffer from too little fragmentation. An original contribution of this paper is to develop a monopoly index that identifies countries where a donor enjoys monopoly power. Finally, we characterise countries with high fragmentation levels. Countries that are poor, democratic and have a large population get more fragmented aid. However, this is only because poor and democratic countries attract more donors. Once we control for the number of donors in a country-sector, democratic countries do not appear different from non-democratic ones in any sector and poor countries actually have a slightly less fragmented aid allocation.
    Keywords: Aid; Fragmentation
    JEL: F35
    Date: 2009–12–02
  2. By: Karlan, Dean (Yale University and Innovations for Poverty Action)
    Abstract: We were asked to discuss specific methodological approaches to evaluating three hypothetical interventions. This article uses this forum to discuss three misperceptions about randomized trials. First, nobody argues that randomized trials are appropriate in all settings, and for all questions. Everyone agrees that asking the right question is the highest priority. Second, the decision about what to measure and how to measure it, i.e., through qualitative or participatory methods versus quantitative survey or administrative data methods, is independent of the decision about whether to conduct a randomized trial. Third, randomized trials can be used to evaluate complex and dynamic processes, not just simple and static interventions. Evaluators should aim to answer the most important questions for future decisions, and to do so as reliably as possible. Reliability is improved with randomized trials, when feasible, and with attention to underlying theory and tests of why interventions work or fail so that lessons can be transferred as best as possible to other settings.
    JEL: B41 D12 D73 H43 H54 J08 O12
    Date: 2009–06
  3. By: Carlo Alberto Magni
    Abstract: Accounting measures are traditionally considered not significant from an economic point of view. In particular, accounting rates of return are often regarded economically meaningless or, at the very best, poor surrogates for the IRR, which is held to be “the” economic yield. Likewise, residual income does not enjoy, in general, periodic consistency with the project NPV, so residual income maximization is not equivalent to NPV maximization. This paper shows that the opposition accounting/economic is artificial and, taking a capital budgeting perspective, illustrates the strong (formal and conceptual) connections existing between economic measures and accounting measures. In particular, the average accounting rate of return is the correct economic yield of a project; the traditional IRR is (whenever it exists) only a particular case of it. The average accounting rate generates a decision rule which is logically equivalent to the NPV rule for both accept/reject decisions and project ranking. The paper also shows that maximization of the simple arithmetic mean of residual incomes is equivalent to NPV maximization, owing to its periodic consistency in the sense of Egginton (1995). Such an index may then be used for incentive compensation as well. Moreover, asset pricing may be interpreted in accounting terms as the process whereby the market determines the income impact on the assets’ value. As a result, the paper harmonizes the notions of accounting rate of return, internal rate of return, residual income, net present value: they are just different ways of cognizing the same notion. This conciliation stems in a rather natural way from three sources: (i) a fundamental accounting identity, which links income and cash flow in a comprehensive way, (ii) the definition of Chisini mean, (iii) a notion of residual income which takes account of the “real” (comprehensive) cost of capital.
    Keywords: Capital budgeting; accounting rate of return; economic yield; internal rate of return; residual income; net present value; average; Chisini mean; cost of capital
    JEL: M41 G11 G12 G31 D81 M52
    Date: 2009–12
  4. By: Nizalova, Olena Y. (Kyiv School of Economics); Vyshnya, Maria (Kyiv Economics Institute)
    Abstract: This paper exploits a unique opportunity to evaluate the impact of the quality change in the labor and delivery services on maternal and infant health. Since basic medical care has been universally available in Ukraine, implementation of the Mother and Infant Health Project allows addressing quality rather than quantity effect of medical care. Employing program evaluation methods we find that the administrative units participating in the Project have exhibited greater improvements in both maternal and infant health compared to the control rayons. Among the infant health outcomes, the MIHP impact is most pronounced for infant mortality resulted from deviations in perinatal period and respiratory system failures. As for the maternal health, the MIHP is the most effective at addressing anemia, blood circulation, and urinary-genital system complications, as well as late toxicosis. The analysis suggests that the effects are due to early attendance of antenatal clinics, lower share of C-sections, and greater share of normal deliveries, and these effects are causal. Preliminary cost-effectiveness analysis shows enormous benefit per dollar spent on the project: the cost to benefit ratio is one to 122 taking into account both maternal and infant lives saved as well as cost savings due to changes in labor and delivery practices.
    Keywords: maternal health, maternal mortality, infant health, infant mortality, prenatal care
    JEL: I12 I18
    Date: 2009–11
  5. By: Sally Merrill
    Abstract: This report summarises findings from the USAID-sponsored project on models of financing for slum upgrading in India, undertaken on behalf of SPARC,a Mumbai-based NGO involved in slum upgrading and the National Housing Bank of India (NHB). This report primarily addresses the following topics: lack of finance for low income housing, lack of participation of banks in construction finance in slum projects, and suggestions for credit enhancements to better leverage subsidies and household contribution.
    Keywords: housing, low-income housing, finance, urban housing finance, finance for low income housing, banks in housing finance, slum projects, slum rehabilitation, subsidies, household contribution, household participation,National Housing Bank, SPARC, Mumbai, India, Urban Studies
    Date: 2009

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