nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2012‒02‒27
four papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. The role of public-private partnerships in local infrastructure : the case of carbon offset projects. By Teichmann, Dorothee
  2. How Can We Improve Evaluation Methods for Public Infrastructure? By Morgenroth, Edgar
  3. Analyzing Political Risks in Developing Countries: A Practical Framework for Project Managers By Jha, Saumitra
  4. Intra-organizational integration and innovation: organizational structure, environmental contingency and R&D performance By You-Na Lee; John P. Walsh

  1. By: Teichmann, Dorothee
    Abstract: L’investissement dans des infrastructures locales sobres en carbone est considéré comme une composante importante de la lutte contre le changement climatique. Les mécanismes de règlementation climatique (comme la compensation carbone) font supporter aux développeurs de projet les risques liés à la réduction des émissions de gaz à effet de serre (GES): les risques opérationnels, technologiques ou liés au monitoring environnemental et aux mécanismes régulateurs. Nous montrons que l’efficacité environnementale et économique des projets dépend en grande partie des modalités de partage de ces risques entre les différents acteurs impliqués dans le projet. Sur un échantillon de projets de torchage des gaz d’enfouissement financés par le Mécanisme pour un Développement Propre, il est montré que la délégation de la fourniture de la technologie crée des risques supplémentaires. La délégation de l’élaboration de la documentation du projet selon les règles formelles de l’UNFCCC et la séparation de l’opération de la décharge et du projet MDP semblent être maîtrisables par la mise en place de mesures de partage de risques.
    Abstract: Investment in low carbon infrastructure is considered an important component of the fight against climate change. The mechanisms of climate regulation (such as carbon offsets) transfer to project developers the risks associated with reducing emissions of greenhouse gas (GHG) emissions, i.e. operational and technological risk, or risks associated with the environmental monitoring and the regulatory mechanism itself. The success of projects depends importantly on the risk sharing arrangements between the private and public partners. It is shown that the delegation of tasks between the partners can create risks that affect the environmental effectiveness and economic efficiency of the project. For a sample of landfill gas flaring projects financed under the Clean Development Mechanism, it is shown that the outsourcing of the provision of technology creates additional risks. The outsourcing of the development of the official project documentation required by the UNFCCC and the separation of the operation of the landfill and the CDM project development appear to be manageable by risk sharing arrangements.
    Keywords: partenariats privé-public; infrastructure locale; gestion des déchets; Mécanisme pour un Développement Propre; changement climatique; théorie des contrats; Public-private partnerships; local infrastructure; waste management; Clean Development Mechanism; climate change; contract theory;
    JEL: L24 L33 Q54 Q53
    Date: 2011–12
  2. By: Morgenroth, Edgar
    Abstract: Given the smaller total budget for public expenditure and the fact that the cost of public funds to Ireland has increased, it is more important than ever to ensure that public investment is prioritised properly in order to derive maximum benefit. Inorder to prioritise we must evaluate. A variety of evaluation methods can be utilised, but perhaps the most widely used is cost benefit analysis. The usefulness of costbenefit analysis crucially depends on a number of parameters and inputs. This paper considers the international literature on two issues, namely, the impact of risk in theform of inaccurate cost or benefit estimates and the setting of the appropriate discount rate, both of which can impact significantly on the usefulness of costbenefit analysis. The evidence on the expected costs and benefits of projects highlights that projects often do not go according to plan and that these estimates are subject to systematic optimism bias, which, while not universal, appears to be widespread. In relation to the appropriate choice of a discount rate, a riskless rate should in general not be used unless all risks have been properly assessed and costed within the analysis. This paper concludes that the discount rates that are currently used in Ireland appear to be low. Furthermore, the paper highlights that if the conventional exponential discounting is used then costs and benefits that occur in the distant future are essentially ignored. A declining discount rate accounts better for costs/benefits that occur in the distant future and is consistent with the observed pattern of time preference of individuals. This paper recommends a hybrid approach be adopted where costs and benefits are discounted using exponential discounting up to a point at which the discounting is switched to declining discounting.
    Date: 2011
  3. By: Jha, Saumitra (Stanford University)
    Abstract: This paper illustrates a practical framework for understanding and predicting political economy risk for project managers operating in a variety of developing country settings, including non-democracies, ethnically diverse environments and societies undergoing political transition. In doing so, the paper also develops a number of novel cases illustrating the effectiveness of this framework in helping us understand both surprising success and failure in the realms of sustainable, private sector and human development. These cases include Tata Nano's difficulties in locating its automobile plant in West Bengal, how a small NGO, the Mehta Foundation, helped secure passage of green fuel mandates in Delhi over strong political opposition and the sustained success of Mexico's pioneering conditional cash transfer program--Progressa/Oportunidades--in an environment of dramatic political regime change.
    Date: 2011–12
  4. By: You-Na Lee; John P. Walsh
    Abstract: It is widely thought that intra-firm integration has a positive effect on organizational performance, especially in environments characterized by complex and uncertain information. However, counter arguments suggest that integration may limit flexibility and thereby reduce performance in the face of uncertainty. Research and development activities of a firm are especially likely to face complex and uncertain information environments. Following prior work in contingency theory, this paper analyzes the effects of intra-organizational integration on manufacturing firms’ innovative performance. Based on a survey of R&D units in US manufacturing firms and patent data from the NBER patent database, we examine the relation between mechanisms for linking R&D to other units of the firm and the relative innovativeness of the firm. Furthermore, we argue that the impact of integration may vary by the importance of secrecy in protecting firms’ innovation advantages. We find that intra-firm integration is associated with higher self-reported innovativeness and more patents. We also find some evidence that this effect is moderated by the appropriability regime the firm faces, with the benefits of cross-functional integration being weaker in industries where secrecy is especially important. These results both support and develop the contingency model of organizational performance.
    Keywords: Innovation; Organizations; Contingency theory;
    Date: 2012–02

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