nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2014‒03‒30
seven papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Explaining cost overruns in infrastructural projects: A new framework with applications to Sweden By Brunes, Fredrik; Lind, Hans
  2. Analyse des techniques d'estimation des projets Agile By Hind Zahraoui; Mohamed Abdou Janati Idrissi
  3. The inhibiting factors that principal investigators experience in leading publicly funded research projects By James Cunningham; Paul O'reilly; Conor O'kane; Vincent Mangematin
  4. Optimal contracting with endogenous project mission By Lea Cassar
  5. Estimating the economic opportunity cost of capital for public investment projects : an empirical analysis of the Mexican case By Coppola, Andrea; Fernholz, Fernando; Glenday, Graham
  6. Why pay NGOs to involve the community? By Ronelle Burger; Indraneel Dasgupta; Trudy Owens
  7. Entrepreneurial intention and career choices: The role of volition By S. Nyock Ilouga; A.C. Mouloungui; J.-M. Sahut

  1. By: Brunes, Fredrik (Department of Real Estate and Construction Management, Royal Institute of Technology); Lind, Hans (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: The first part of the article presents a new framework for analyzing cost overruns. It has a descriptive part in two dimensions: when during the process that the cost overrun arose and what part of the cost function was responsible (change in the product, change in quantities of the inputs and change in price of inputs. The explanatory part is a development of Flyvbjerg´s theories and identifies four possible explanations: political/strategic aspects, psychological aspects, competence related and bad luck. It is argued that Flyvbjerg´s technological explanation belongs to the descriptive part. The empirical part of the paper uses this framework to analyze cost overruns in infrastructure projects in Sweden, primarily based on a questionnaire to experienced project managers. The results is that most of the cost overruns occur in the planning stages up to the final design and are related to design changes and to increases in the amount of inputs needed because of technical and administrative problems. Of the explanatory factors there is most support for lack of competence and optimism bias.
    Keywords: cost overrun; theoretical framework; infrastructure; Sweden
    JEL: L21 L24 L32
    Date: 2014–03–21
  2. By: Hind Zahraoui (ENSIAS - Ecole Nationale Supérieure d'Informatique et d'Analyses des Systèmes - Université Mohamed V - Souissi); Mohamed Abdou Janati Idrissi (ENSIAS - Ecole Nationale Supérieure d'Informatique et d'Analyses des Systèmes - Université Mohamed V - Souissi)
    Abstract: The estimation process in any software project is not only essential, but also a critical element. The success or failure of the project depends heavily on the accuracy of estimates of effort and time. The emergence of agile methods in the field of software development presented many opportunities and challenges for researchers and practitioners. A major challenge is the estimation of software development effort. Although traditional estimation approaches are used to estimate the cost of agile projects, these estimates are often inaccurate. Although much research has focused on the traditional estimation methods, little is known on the estimation of agile projects. This is paradoxical, since reducing the cost and time of development is the driving force behind the emergence of the agile paradigm. This article aims to provide a critical analysis of the estimation techniques used for agile projects.
    Keywords: Cost estimation; Product Backlog, Agile Methods, Velocity
    Date: 2014–03–18
  3. By: James Cunningham (Whitaker Institute for Innovation and Societal Change - J.E. Cairnes School of Business and Economic); Paul O'reilly (College of Business - Dublin Institute of Technology); Conor O'kane (Department of Management - University of Otago); Vincent Mangematin (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM))
    Abstract: Securing public funding to conduct research and leading it by being a principal investigator (PI) is seen as significant career development step. Such a role brings professional prestige but also new responsibilities beyond research leadership to research management. If public funding brings financial and infrastructure support, little is understood about the inhibiting factors that publicly funded PIs face given the research autonomy offered by publicly funded research. Our study finds that there are three key PI inhibiting factors 1) political and environmental, 2) institutional and 3) project based. Traditional knowledge, skills and technical know-how of publicly funded PIs are insufficient to deal with the increasing managerial demands and expectations i.e. growing external bureaucracy of public funding agencies. Public funding is no longer the 'freest form of support' as suggested by Hackett (1990) and the inhibiting factors experienced by publicly funded PIs limits their research autonomy. We also argue that PIs have little influence in overcoming these inhibiting factors despite their central role in conducting publicly funded research.
    Keywords: Publicly Funded Research; Principal Investigators; Inhibiting Factors; Research Leadership; Research Management; Research Autonomy
    Date: 2014
  4. By: Lea Cassar
    Abstract: I present a model in which a principal selects one among many agents to develop a project and influences the agent’s ex post level of effort not by outcome-contingent rewards, but by the choice of the project’s mission. The closer the project’s mission to the agent’s preferred mission, the higher the agent’s intrinsic benefit from exerting effort. The principal and the agents disagree on what the project’s mission should be and the agents vary in how much they care about the project’s mission, i.e. they have heterogeneous unobservable intrinsic motivation levels. I derive the optimal mechanism (allocation rule, project’s mission, payment) to select and motivate the agent. I also consider situations where the project’s mission must be chosen prior to the allocation of the project and where the agents face budget constraints. Several applications are discussed.
    Keywords: Optimal contracting, non-monetary incentives, mission preferences, intrinsic motivation
    JEL: H41 D64 D82
    Date: 2014–03
  5. By: Coppola, Andrea; Fernholz, Fernando; Glenday, Graham
    Abstract: This paper offers an assessment of the methodologies employed to estimate the economic opportunity cost of capital for public sector projects, relying on the Mexican case for an applied empirical exercise. The traditional weighted cost of capital (top-down) approach used in the estimation of Mexico's economic opportunity cost of capital is reviewed and compared to the supply price (bottom-up) approach. With respect to previous studies using the top-down approach, this paper explores the contribution of domestic savings and expands the analysis to include a more detailed examination of the available macroeconomic, labor, financial, and tax information. The re-estimated top-down economic opportunity cost of capital for Mexico comes to 10.4 percent. To confirm these results and provide additional insights regarding the alternative bottom-up approach, the economic opportunity cost of capital is estimated using the supply price plus externalities method. For the case of Mexico, this paper recommends using a combination of estimation models (both the top-down and bottom-up approaches) to check the consistency of results and re-estimating the economic opportunity cost of capital every five years to accommodate for macroeconomic and fiscal changes. More broadly, the paper acknowledges the complexities involved in the estimation of the economic opportunity cost of capital for public investment projects and underlines the relevance of additional considerations, such as changes in global economic trends and country risk ratings, tax distortions, financial sector improvements, the impact of reforms, and data availability.
    Keywords: Economic Theory&Research,Debt Markets,Emerging Markets,Investment and Investment Climate,Banks&Banking Reform
    Date: 2014–03–01
  6. By: Ronelle Burger (Department of Economics, University of Stellenbosch); Indraneel Dasgupta (Economic Research Unit, Indian Statistical Institute); Trudy Owens (School of Economics, University of Nottingham)
    Abstract: We examine the case for donors providing financial incentives to NGOs to increase community participation. We show that, when such incentives are provided, there need not exist any meaningful relationship between beneficiary welfare and the extent of community participation implemented by an NGO. Higher community participation is consistent even with reduced beneficiary welfare. Thus, eliminating community participation from the set of conditions for funding an NGO may improve beneficiary welfare. We provide evidence from the NGO sector in Uganda consistent with our theoretical conclusions. Beneficiaries themselves do not appear to perceive community participation as generating appreciable value-addition in project output.
    Keywords: regulation of non-governmental organizations, developing countries, community participation, Uganda
    JEL: I38 L31 L38
    Date: 2014
  7. By: S. Nyock Ilouga; A.C. Mouloungui; J.-M. Sahut
    Abstract: Developing entrepreneurship among students and helping them to build their career plans and improving their employability is the core of public policy in a lot of countries in Europe (Branchet et al., 2011). Following some empirical researches (Boissin et al., 2009), we do know some predictive factors for the emergence of an entrepreneurial project. But another question remains largely unexplored: What are the psychological mechanisms that may interplay in entrepreneurial intention and career choices? Our research aims to demonstrate that entrepreneurship is an objective which relies entirely on willingness, and therefore, it is much more dependent on interpersonal features than on economic and environmental constraints. In particular, we wish to highlight the personal dynamics in shaping, maturing and implementing a choice of entrepreneurial career in order to extract volitional characteristics of this career choice. The hypotheses are tested using data from interviews conducted with French students in business schools, engineering schools and universities. Our dynamic approach to study the psychosocial processes involved in the definition of an entrepreneurial career helps understand the interest of young people in the entrepreneurial process. This research has demonstrated that volition has a key role in binding an individual commitment to an ambitious career objective.
    Keywords: entrepreneurship, career, volition, entrepreneurial intention, entrepreneurial project, theory of planned behavior
    JEL: L26 M53 J24 H52
    Date: 2014–02–25

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