nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2014‒07‒05
eight papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. Project Evaluation with Democratic Decision-making: What Does Cost-benefit Analysis Really Measure? By Nyborg, Karine
  2. The Spillover Effects of Publicly Supported Private R&D : Analysis of NEDO Follow-up Survey Data By Matsushima, Kazunari; Aoshima, Yaichi
  3. Impact of Renewable Energy Act Reform on Wind Project Finance By Matthew Tisdale; Thilo Grau; Karsten Neuhoff
  4. Connecting South Asia to Southeast Asia : Cross-Border Infrastructure Investments By Jean-Francois Gautrin
  5. Understanding the Role of Collective Imaginary in the Dynamics of Expectations: The Space Industry Case Study By Benjamin Cabanes; Blanche Segrestin; Benoît Weil; Pascal Le Masson
  6. A range based Multi-Actor Multicriteria Analysis to incorporate uncertainty in stakeholder based evaluation processes By Gino Baudry; Cathy Macharis; Thomas Vallée
  7. Beyond the "Grid-Lock" in Electricity Interconnectors: The Case of Germany and Poland By Lidia Puka; Kacper Szulecki
  8. Relation entre l’opérateur de transport public à Bruxelles (STIB) et l’autorité organisatrice : entre asymétrie et coopération By Christophe GOETHALS

  1. By: Nyborg, Karine (Dept. of Economics, University of Oslo)
    Abstract: It is often argued that projects involving public good changes should be chosen on the basis of monetary valuation and cost-benefit analysis (CBA). In democratic project selection processes, however,decision-makers cannot generally interpret CBA as measuring projects’ social welfare effects.The reason is partly that decision-makers’views of the good society differ –that is, they typically do not hold the same social welfare function – and partly because separating efficiency anddistribution is even less straightforward in democratic than in dictatorial decision-making processes.
    Keywords: Environmental cost-benefit analysis; ethics; democratic decision-making;
    JEL: A11 D31 D61 D63
    Date: 2014–07–04
  2. By: Matsushima, Kazunari; Aoshima, Yaichi
    Abstract: Innovation creating economic values has become a vital issue due to severe global competition. Given such a circumstance, government funding has flowed not only into pure research, but into applied research and product development linked directly with commercialization as well. Such a tendency has been accelerated since “Bayh-Dole Act” was enacted, which made it easier for firms to appropriate R&D outcomes. Increased appropriablity that promotes commercialization, however, may prevent technological outcome produced by a government-funded R&D project from being widely utilized in a society. The project aimed at immediate commercialization may tend to create context-specific knowledge that can be applied only to the particular product category rather than generalized technological knowledge that can be widely available for other products or technological fields. Such a project may also have strong incentives to keep such technologies in-house. Therefore, the policy side confronts dilemma that the more government attempts to encourage private R&D activity with public support that are linked directly with market competition, the more the indirect spillover effects are sacrificed because of increased appropriability. To resolve this dilemma, we must identify the factors that influence the spillover effects of private R&D projects receiving public support. In this paper, we first classified a spillover effect in accordance with three dimensions, spillover contents, scope of the spillover, and spillover recipient field. Furthermore, spillover contents can be divided into “technological spillover,” “cognitive spillover” and “social-relations spillover.” And then, we empirically investigate the factors that influence spillover effects by analyzing data obtained from 301 private R&D projects supported by NEDO (New Energy and Industrial Technology Development Organization), Japan’s public management organization promoting private R&D. Our findings show that while the project starting at the exploratory phase had positive effects on technological spillover both within and outside the firm, and that spillover outside the firm is restricted when the project is of great strategic importance for a firm. We also found that information exchanges with other internal divisions had positive effects on not only technical spillover but on cognitive spillover and social-relations spillover. Results imply that it is necessary for supporting institutions to confirm that projects are not isolated internally and that there is a system in place to receive assistance and cooperation from other divisions.
    Date: 2014–06
  3. By: Matthew Tisdale; Thilo Grau; Karsten Neuhoff
    Abstract: The 2014 reform of the German Renewable Energy Act introduces a mandatory shift from a fixed feed-in tariff to a floating premium system. This is envisaged to create additional incentives for project developers, but also impacts revenues and costs for new investments in wind generation. Thus uncertainties for example about balancing costs and the impact of the location specific generation profile on the average price received by a wind project are allocated to renewable projects. We first estimate the magnitude of the impacts on wind projects based on historic and cross-country comparison. We then apply a cash-flow model for project finance to illustrate to what extent the impact of the uncertainty for project investors reduces the scale of debt that can be accessed by projects and thus increases financing costs.
    Keywords: Feed in tariff, financing renewables, project finance
    JEL: G32 L51 L94
    Date: 2014
  4. By: Jean-Francois Gautrin (Asian Development Bank Institute (ADBI))
    Abstract: South Asia and Southeast Asia have been connected for many centuries, with the degree of connectivity varying over time. This paper explores strengthening connectivity between the two subregions by identifying the missing links in transport connectivity. The paper is specifically concerned with the role of cross-border transport infrastructure investments. To this end, the author reviews all possible road and rail land corridors that would help create seamless transport connectivity. Missing gaps and corresponding transport infrastructure projects are identified, and projects are screened and prioritized. For the selected critical projects, the study recommends phased investments.
    Keywords: South Asia, Southeast Asia, Cross-Border Infrastructure Investment, transport connectivity, transport infrastructure
    JEL: H41 H54 O22 F36
    Date: 2014–05
  5. By: Benjamin Cabanes (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Blanche Segrestin (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Benoît Weil (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Pascal Le Masson (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: The main objective of this study attempts to contribute to a growing body of research in the understanding of innovation and technological development. When addressing radical changes in technology and innovation, ideas derived from expectations and promises have become key issues in transforming a vision into reality. Thus, our paper aims to investigate the dynamics of expectations and its relationship to the collective imaginary when applied to the space industry. The space industry is one of the most exemplary cases to study the dynamics of social expectations (i.e. space observation, space exploration, the conquest of space, and etc.) and it has clearly been considered as a strong stimulus for design efforts. In order to illustrate the processes involved with fulfilling the design of new visions and innovative promises, we use the most recent models of design reasoning (C-K theory) to support our hypothesis.
    Keywords: Technology Development; Innovation Development; Dynamic of Expectations; Collective Imaginary; Social Imaginary; C-K design theory; Space Industry
    Date: 2014–06–15
  6. By: Gino Baudry (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Cathy Macharis (BUTO - Business Technology and Operations - Vrije Universiteit Brussel - VUB (BELGIUM)); Thomas Vallée (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272)
    Abstract: Increasing concerns about environmental and social impacts have made multicriteria analysis (MCA) increasingly popular in decision making processes. The present paper proposes a new methodology which allows taking into account multicriteria aspects, stakeholder's preferences and long time horizon uncertainty. Relying on the MAMCA methodology developed by Macharis in 2000, we develop a new decision making support tool, the range based MAMCA. Within MAMCA, the different possible solutions or alternatives are evaluated on the objectives of the stakeholders. These evaluations can be however uncertain as there might be a lack of knowledge, lack of experience or future predications might be uncertain. By means of Monte Carlo Simulation a range based MAMCA approach is developed to generate several possible states of the world. While a classical MCA would have provided a single final ranking, encouraging the support of an alternative, which can either be the best or the worst one depending on its performance uncertainty in the long run. The range based MAMCA provides a wide range of possible rankings depending on the many possible states of the world. Thus, it provides scorings, rankings of alternatives and the probability they will occur. The new approach is described and shown by means of an illustrative case: the stakeholder support for different biofuel options.
    Keywords: Multi-criteria analysis; decision making; multi-actor multi criteria analysis; uncertainty; sustainable development; Monte Carlo Simulation.
    Date: 2014–06–19
  7. By: Lidia Puka; Kacper Szulecki
    Abstract: The common European electricity market requires both market integration and transmission grid expansion, including trans-border interconnectors. Although the benefits of increased interconnectivity are widely acknowledged, expansion of interconnectors is often very slow. This paper gathers insights on the reasons behind this "grid-lock" drawing on the study of the German-Polish border. Although two interconnectors already exist, the trade is blocked by unplanned electricity loop flows. A third interconnector has been discussed for years, but saw little progress in spite of declarations of support on both sides. Drawing on the existing literature on the topic of grid expansion we identify four hypotheses for the grid-lock: inadequate financing; diverging interests; governance and administration problems; and different actors' motivations, trust and security perceptions. We evaluate them using the empirical material gathered through document analysis and stakeholder interviews conducted in Germany and Poland. None of the hypotheses on its own can explain the "gridlock". However, while financing has not been a major obstacle, divergent interests had an impact on the project delay, administrative and governance problems are a great hindrance on the technical level, while motivations influence interstate political relations and policy shaping. EU support and closer bilateral cooperation provide opportunities to address these challenges.
    Keywords: Electricity interconnectors, the European Union, loop-flows
    JEL: N74 N7 Q4 Q48
    Date: 2014
  8. By: Christophe GOETHALS (Centre de recherche et d’information socio-politiques (CRISP), Université Libre de Bruxelles (ULB), Centre Émile Bernheim (SBS-EM – ULB))
    Abstract: Since 1989 and the regionalization of public transports in Belgium, the Société des transports intercommunaux de Bruxelles (STIB), i.e. the public operator of urban transport in Brussels, has undergone many changes, both structural and organizational. Meanwhile, the company has managed to improve its financial health in accordance with the objectives set by the regulatory transport authority, the Region of Brussels-Capital. The analysis of the system of actors shows that, in a principal-agent relationship characterized by high information asymmetry, the convergence of interests between the supervisory authority and the public company is neither natural nor automatic: it is built. This construction takes place at several levels and materializes incrementally, particularly through the management contract. In this regulatory system, the process organizing the dialogue between the company and the authority produces the desired beneficial effects, more than the legal value of the contract does. The interdependence between the actions of the Region and those of the STIB implies practices that can be described as a partnership. Finally, the analysis shows that the contractualization is not inconsistent with an evolution of the roles of each actor
    Keywords: agency theory, asymmetric information, public enterprise, public policies, urban transport, regulatory reform, governance, system of actors, performance measurement.
    JEL: D82 G38 L32 D22 P11
    Date: 2014–06

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