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on Project, Program and Portfolio Management |
| By: | Wong, Sam |
| Abstract: | Community-based development has been criticized for its inadequate understanding of power relationships at the local level, which thus leaves room for elite capture. This paper compares and contrasts two case studies, both of which take power seriously in their institutional designs. The solar home system in Bangladesh, represents the ‘counter-elite’ approach and explicitly excludes local elites from the decision-making process. The trans-boundary water governance project in Ghana, in contrast, adopts the ‘co-opt-elite’ approach and deliberately absorbs local elites into the water committee. This paper suggests that, while the ‘counter-elite’ approach is not necessarily effective in challenging elite domination, because of the structural asset dependence of poor people on the elites, the ‘co-opt-elite’ approach risks legitimizing the authority of the elites and worsening poverty by implementing ‘anti-poor’ policies. This paper concludes that the success of dealing with elite capture lies in the flexible use of the ‘counter-elite’ and ‘co-opt-elite’ approaches together with the need to secure alternative livelihoods and to achieve empowerment with the poor. |
| Keywords: | elite capture, power, poverty, community development, water management, solar lighting |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-82&r=ppm |
| By: | Schneider, Georg; Sureth, Caren |
| Abstract: | In entrepreneurial decisions making uncertain future profits often are a main characteristics of real investment opportunities. If investors can react to uncertainty the degree of irreversibility and timing flexibility inherent in the available project should be integrated into the decision calculus. In this paper we investigate the interdependencies of effects from profit taxation and real options. We model an investment decision including an option to invest and an option to abandon. We show that increasing the tax rate can lead to paradoxical tax effects, i.e. may foster an investor's willingness to invest into a capitalized investment. Instead, if we abstract from the possibility to abandon the investment object such paradoxical effect cannot be identified. Determining the after-tax value of the option to enter the investment project with and without an abandonment option we receive a critical cash flow cutoff level. We find that the value of the option to abandon depends on the tax rate and the amount of periodical cash flows. The option value can be increasing or decreasing in the tax rate. We find scenarios with paradoxical tax effects and show that the observed paradoxical effects are due to the presence of the real abandonment option itself. This finding contributes to the stream of literature that explains potential sources of paradoxical tax effects. The generated decision rules are helpful for investors facing risky investment opportunities and for discussing the economic impact of tax reforms. Furthermore, we highlight the overwhelming importance of integrating taxes in typically applied valuation approaches. -- |
| Keywords: | investment decisions,real options,tax effects,timing flexibility,,uncertainty |
| JEL: | H25 H21 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:arqudp:97&r=ppm |