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on Project, Program and Portfolio Management |
| By: | Hamilton, Kirk; Stover, Jana |
| Abstract: | Recent carbon market prices are substantially lower than mean or median estimates of the social cost of carbon in the literature. Intuition would therefore suggest that'investment errors'are being made, in the sense that markets favor higher carbon-emitting projects, while global welfare would be larger with lower carbon-emitting projects. This intuition is correct in specific circumstances, but not others. For any comparison of two alternative projects, there is a carbon switching price that equalizes their net social benefits. From the perspective of maximizing global welfare, investment errors only occur when this switching price lies between the carbon market price and the social cost of carbon. Data on the costs of high-carbon and low-carbon electric generation projects suggest that there is no financing gap using mean or median published figures, but for precautionary (95th percentile) choices of the social cost of carbon, there is a financing gap between carbon market prices and the switching price that would trigger investment in the global welfare-maximizing low-carbon project. A global carbon fund to finance this gap could be conceived, but stricter emission caps and reforms of carbon markets are likely to be a more efficient solution to the problem. |
| Keywords: | Climate Change Mitigation and Green House Gases,Climate Change Economics,Markets and Market Access,Carbon Policy and Trading,Energy Production and Transportation |
| Date: | 2012–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6117&r=ppm |
| By: | Yanez-Pagans, Monica (World Bank); Machicado, Carlos Gustavo (INSEAD) |
| Abstract: | This paper examines bureaucratic delay within the allocation of small infrastructure projects by sub-municipal governments in Bolivia, and it presents a randomized field experiment designed to improve public service delivery by promoting voice, transparency, and accountability among grassroots organizations. The experiment consists of randomly providing sub-municipal governments with a mailing tracking system, which provides public officials and grassroots organizations real- time information about the processing of small infrastructure projects requests by sub-municipal governments. The objective of this intervention is twofold. First, is to facilitate the involvement of grassroots organizations in the process of reviewing, tracking, and monitoring small infrastructure project allocations. Second, is to explicitly alter the probability of detecting inefficient administrative practices within district councils and, therefore, to implicitly increase the expected cost of engaging in such practices among public officials. The findings of this paper suggest that monitoring tools that promote access to information by citizens might play a critical role in improving public service delivery outcomes. Yet, in settings where mechanisms of local accountability are subject to be captured by local elites or are weak, monitoring tools might have limited capacity to improve outcomes. In such settings, major transparency related reforms might be needed to improve public service delivery outcomes. |
| Keywords: | Bolivia, transparency, accountability, local-level monitoring, bureaucratic delay |
| JEL: | D73 C93 H76 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6687&r=ppm |
| By: | Cesare Dosi (Department of Economics and Management, University of Padova); Michele Moretto (Department of Economics and Management, University of Padova, Centro Studi Levi Cases, Fondazione Eni Enrico Mattei) |
| Abstract: | Time overruns are common in public works and are not confined to inherently complex tasks. One explanation advanced in this paper is that bidders can undergo unpredictable changes in production costs which generate an option value of waiting. By exploiting the real-option approach, we examine how the inability to force sellers to meet the contract time influences their bidding behaviour, and how this can ultimately affect the parties’ expected payoffs. Further, we examine the outcome of the bidding process when legal rules prevent the promisee from contracting for damage measures which would grant more than her lost expectation. We show that when the pre-agreed compensatory payments prove insufficient to discourage delayed orders, setting a liquidated damages clause would not lead to a Pareto superior outcome with respect to the no-damage-for delay condition. While such a clause would increase the seller’s expected payoff, the buyer’s expected payoff is lower than when the contract does not provide for any compensation for late-delivery. |
| Keywords: | Public Procurement, Fixed-Price Contracts, Cost Uncertainty, Time Overruns, Liquidated Damages, Real Options |
| JEL: | C61 D44 D86 K12 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.45&r=ppm |
| By: | Fridolfsson, Sven-Olof (Research Institute of Industrial Economics (IFN)); Tangerås, Thomas (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Green certificates are the main instrument for promoting renewable electricity (RES-E) in Sweden. But certificates cover only a limited share of total RES-E production. Under partial coverage, crowding out may arise whereby costly new RES-E replaces inexpensive old RES-E. Granting certificates to all of RES-E production improves efficiency, but leaves windfall rent to otherwise profitable facilities. We also analyze transaction costs in the permit process for new RES-E in Sweden. Municipalities veto socially desirable projects because of asymmetrically distributed investment costs and benefits. We propose market-based permit fees rather than limited veto rights as a solution to this NIMBY problem. |
| Keywords: | Crowding out; Green certificates; NIMBY; Transaction costs; Windfall rent |
| JEL: | D23 Q48 Q52 Q54 |
| Date: | 2012–06–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0921&r=ppm |
| By: | Di Gaetano, Luigi |
| Abstract: | In recent years there has been an increasing diffusion of open source projects, as well as an increasing interest among scholars on the topic. Open source software (OSS) is developed by communities of programmers and users, usually sponsored by private firms; OSS is available in the public domain and redistributed for free. In this paper a model of open and closed source software (CSS) competition will be presented. Hardware and software are complement goods and OSS is financed by hardware firms. There is a differentiated oligopoly of hardware–software bundles, in which firms compete in prices. Results are several; positive (hardware firm) contributions are possible, although, they are not socially optimal. OSS availability has a positive impact on social welfare, and on hardware firms’ profits and prices. CSS firm’s price and profits decrease when OSS is available. The effect on the price of the hardware–CSS bundle depends on demand own–price elasticity. The model can explain the increasing participation in open source projects of embedded device producers. Hardware firms’ incentives to contribute to OSS development process are greater when there is a relatively intensive competition among producers. Hardware firms use OSS to decrease the software monopolist’s market power. |
| Keywords: | Open source; software markets; differentiated oligopoly; complement goods |
| JEL: | D21 L11 L17 D43 |
| Date: | 2012–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:39849&r=ppm |