nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2013‒09‒13
six papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. The Management of International Development Projects: Enhancing Sustainable Outcomes with Improved Project Management Education and Training By Patrick Martens; Mieke van Riet; Rui Miguel Santos
  2. Keeping Your options Open By Jean Guillaume Forand
  3. Evaluation of development programs : randomized controlled trials or regressions ? By Elbers, Chris; Gunning, Jan Willem
  4. Quantitative Analysis of Dynamic Inconsistencies in Disaster Prevention Infrastructure Improvement: An example of coastal levee improvement in the city of Rikuzentakata By KONO Tatsuhito; KITAMURA Naoki; YAMASAKI Kiyoshi; IWAKAMI Kazuki
  5. The impact of stochastic extraction cost on the value of an exhaustible resource: An application to the Alberta oil sands By Abdullah Almansour; Margaret Insley
  6. En värdefull berättelse Wallenbergarnas historieprojekt By Olsson, Ulf

  1. By: Patrick Martens (Maastricht School of Management, Maastricht, The Netherlands); Mieke van Riet (Maastricht School of Management, Maastricht, The Netherlands); Rui Miguel Santos (Maastricht School of Management, Maastricht, The Netherlands)
    Abstract: This paper is focused on the management of international development projects. The primary aim is to put forward innovative new ideas for project management education and training in the light of the current realities of development projects. These are defined as projects funded by international donor organizations that focus on development issues such as poverty alleviation, health, education, agriculture, food security, trade, private sector development and institutional capacity building in developing countries. The paper addresses projects that cover the provision of technical expertise, rather than infrastructural development and supplies, as funded by the European Union, World Bank or bilateral donors such as USAID, the Netherlands Government and DFID. The paper provocatively examines current problems in the field, highlighting some general success and failure factors, and then considers some interesting cases of innovation using new learning technologies and learning designs. The analysis is based on an exploratory research approach through the authors’ hands-on experiences, either as project managers, project management trainers or individual experts, in over 200 donor-funded projects over 18 years in a large and diverse number of developing countries. The current realities of development project management, including education and training, are examined and contrasted with current project management methodologies, especially Project Cycle Management (PCM) and the Project Management Institute’s (PMI) approach regarded as important in that it is as an increasingly emergent industry standard and training provider. The PMI’s ‘Project Management Body of Knowledge’ (PMBOK) provides both a curriculum for training as well as a useful analytical framework for assessing project management performance and is used here to study current issues and problems in development projects: the critical success and failure factors. The PMI, however, is generally better known in the private sector and despite an innovative quality-driven approach using distance education technologies, lacks strong recognition in the institutions of international development. On the other hand, donor-funded project management methodologies, notably PCM, remain de rigueur and there has been little innovation over the last 20 years, especially in the ways project management is taught and trained. A particular issue is distance education and the opportunities provided by electronic learning environments. Drawing on case studies presented, the paper explores how traditional donor project management systems such as PCM can be enhanced by innovative training methods, including e-learning and blended learning; as well as collaboration and sharing with distance education providers such as the PMI and higher education institutions. The paper is also in part intended as a vision and point of departure for a capacity group that will be focused on developing new approaches and materials for project management training that will ultimately contribute to the more effective management of international development projects and promote sustainable outcomes.
    Date: 2013–09
  2. By: Jean Guillaume Forand (Department of Economics, University of Waterloo)
    Abstract: In standard models of experimentation, the costs of project development consist of (a) the direct cost of running trials as well as (b)the implicit opportunity cost of leaving alternative projects idle. Another natural type of experimentation cost, the cost of holding on to the option of developing a currently inactive project, has not been studied. In a multi-armed bandit model of experimentation in which inactive projects have explicit maintenance costs and can be irreversibly discarded, I fully characterise optimal experimentation policies and show that the decision-maker's incentive to actively manage its options has important implication for the order of project development. In the model, an experimenter searches for a success among a number of projects by choosing both those to develop now and those to maintain for (potential) future development. In the absence of maintenance costs, optimal experimentation policies incentives to bring the option value of less promising projects forward, and under optimal experimentation policies, 'going -with-the-loser' can be optimal: projects that are less likely to succeed are sometimes developed rast.
    JEL: D83 D81 C61
    Date: 2013–02
  3. By: Elbers, Chris; Gunning, Jan Willem
    Abstract: Can project evaluation methods be used to evaluate programs: complex interventions involving multiple activities? A program evaluation cannot be based simply on separate evaluations of its components if interactions between the activities are important. In this paper a measure is proposed, the total program effect (TPE), which is an extension of the average treatment effect on the treated (ATET). It explicitly takes into account that in the real world (with heterogeneous treatment effects) individual treatment effects and program assignment are often correlated. The TPE can also deal with the common situation in which such a correlation is the result of decisions on (intended) program participation not being taken centrally. In this context RCTs are less suitable even for the simplest interventions. The TPE can be estimated by applying regression techniques to observational data from a representative sample from the targeted population. The approach is illustrated with an evaluation of a health insurance program in Vietnam.
    Keywords: Poverty Monitoring&Analysis,Health Monitoring&Evaluation,Science Education,Scientific Research&Science Parks,Statistical&Mathematical Sciences
    Date: 2013–09–01
  4. By: KONO Tatsuhito; KITAMURA Naoki; YAMASAKI Kiyoshi; IWAKAMI Kazuki
    Abstract: Cost-benefit analysis (CBA) is considered as an effective means to avoid the government's failures of public projects. However, once CBA becomes mandatory and residents expect a public project to be established based upon it, there is the potential for a dynamic inconsistency problem to arise. Taking as an example the coastal levee improvement policy in the city of Rikuzentakata in Japan, the present study clarifies the mechanism behind the dynamic inconsistency problem that is attributable to mandatory CBA and also discusses quantitatively the influence of the dynamic inconsistency problem on social welfare. In addition, through examining the quantitative result, we indicate that, in the projects where the improvement cost increases gradually with the scale, the inefficiency of the dynamic inconsistency problem is incurred on a larger scale.
    Date: 2013–09
  5. By: Abdullah Almansour (Department of Finance and Economics, King Fahd University of Petroleum and Minerals); Margaret Insley (Department of Economics, University of Waterloo)
    Abstract: The optimal management of a non-renewable resource extraction project is studied when input and output prices follow correlated stochastic processes. The decision problem is specified by two Bellman equations describing the project when it is currently operating or mothballed. Solutions are determined numerically using the Least Squares Monte Carlo methodology. The analysis is applied to an oil sands project which uses natural gas during extracting and upgrading. The paper takes into account the co-movement between crude oil and natural gas prices and proposes two price models: one incorporates a long-run link between the two while the other has no such link. Incorporating a long-run relationship between oil and natural gas prices has a significant effect on the value of the project and its optimal operation and reduces the sensitivity of the project to the natural gas price process.
    JEL: Q30 Q40 C61 C63
    Date: 2013–06
  6. By: Olsson, Ulf (Department of Economic History, School of Business, Economics and Law, Göteborg University)
    Abstract: This working paper is about how a series of business history projects was launched in the second half of the twentieth century. In connection with the 1956 centenary of the Wallenberg’s bank, the family assembled the necessary expertise to document the first hundred years. In the 1960s the radical left was highly critical of the Wallenberg’s financial and industrial dynasty; the head of the family, Marcus Wallenberg, accordingly initiated an extensive programme of historical research to show what his family and its enterprises had actually done for Sweden’s economic development. The historian and archivist Gert Nylander was entrusted with the task of recruiting scholars for the various projects: biographies of the family’s successive heads and histories of the major companies in which the Wallenbergs had a controlling interest. The two dozen or so business histories are presented in this article along with their authors, of whom I am one. Marcus Wallenberg’s and Nylander’s mutual trust meant that besides being based on excellent access to the sources, these business histories could meet the standards that professional historians expect. Private industrialists’ interest in their own history is liable to clash with the aims of academic research. In my opinion, in this particular case and thanks to a number of circumstances, fruitful collaboration was achieved to the benefit of historical research into Swedish business.
    Keywords: Wallenberg; Banking History; Sweden; Financial History; Gert Nylander
    JEL: N24 N84
    Date: 2013–09–02

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