nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2014‒11‒12
six papers chosen by
Arvi Kuura
Tartu Ülikool

  1. Degrees of freedom in road construction By Nyström, Johan; Lind , Hans; Nilsson , Jan-Eric
  2. The economic evaluation of infrastructure investment. Some inescapable tradeoffs By Ginés de Rus
  3. Is Country-system-based Aid Really Better than Project-based Aid? Evidence from Rural Water Supply Management in Uganda By Furukawa, Mitsuaki; Mikami, Satoru
  4. Management of the International Development Aid System Aid System and the Creation of Political Space for China:The Case of Tanzania By Furukawa, Mitsuaki
  5. Sequential lending with dynamic joint liability in micro-finance By Chowdhury, Shyamal; Roy Chowdhury, Prabal; Sengupta, Kunal
  6. Implementing HIV Prevention in the Context of Road Construction: A Case Study from Guangxi Zhuang Autonomous Region in the People’s Republic of China By Asian Development Bank (ADB); ; ;

  1. By: Nyström, Johan (VTI); Lind , Hans (KTH); Nilsson , Jan-Eric (VTI)
    Abstract: One policy that is believed to increase the rate of innovation and the level of productivity is to move from Design-bid-build contracts (DBB) to Design-Build contracts (DB). A common view is that the latter provides the contractor more degrees of freedom to enable innovation. This hypothesis consists of two steps, first that DB actually has more degrees of freedom and secondly that more degrees of freedom leads to more innovation. This paper focuses on the first step and is based on a review of five road construction projects – two labelled DBB and three DB. It is demonstrated that there is a gap between the textbook definition of the two types of contracts and the actual design of the examples. The degrees of freedom for the contractor are restricted in both DB and DBB contracting and no significant difference in this dimension could be established. Based on this lack of difference in the five projects, the expectation of innovation for the labelled contracts cannot be settled. Some possible rational reasons for the client to restrict the degrees of freedom are also suggested.
    Keywords: Innovation; Contracting; Design Bid Build (DBB); Design and Build (DB)
    JEL: D86 H57 L74
    Date: 2014–10–24
  2. By: Ginés de Rus
    Abstract: Infrastructure investment is an inter-temporal decision through which society foregoes its current wellbeing for the future. In the economic assessment of this trade-off, the practical standard method is cost-benefit analysis, which compares the social benefits and costs of the decision. Furthermore, a sound exercise of economic evaluation requires an approach that incorporates other unavoidable trade-offs related to pricing, such as charging short-run vs long-run marginal cost or the consequences of budget constraints on the net social value of the investment; intermodal competition and public investment; institutional design and the choice of contracts; and in a particularly important but somewhat neglected point, the long-term consequences of investment decisions. This paper addresses the economic content of this set of essential trade-offs and discusses their inclusion in the economic evaluation of major projects.
    Date: 2014–10
  3. By: Furukawa, Mitsuaki; Mikami, Satoru
    Abstract: The adoption by donors of the recipient country’s system, rather than a parallel donor system, in implementing aid projects has been highly recommended within the aid community in recent years. However, the assumption behind this policy that using a country’s own system would enhance the recipient’s bureaucratic capability and result in improved public service delivery has yet to be verified. We show in this paper that this expectation does not necessarily fit with the reality, taking the Ugandan rural water supply sector as an example. When bureaucracy itself is in flux in the name of “decentralization,” the unconditional adoption of a country-system approach could underperform when compared to the conventional donor-project approach.
    Keywords: Uganda , rural water supply , country system
    Date: 2014–01–23
  4. By: Furukawa, Mitsuaki
    Abstract: This paper attempts to assess government behaviors around aid and other development resources in Tanzania where the Poverty Reduction Regime is most advanced, through a deeper analysis of what kind of development aid structures DAC donors and the Tanzanian government have constructed and how the Tanzanian government is taking in development resources not only from DAC donors but also from China through government organizational restructuring. This paper found out that the development aid structure built with precision under poverty reduction regime in Tanzania on the contrary to DAC donors’ intention has led to the Tanzania own initiative for National development plan and created the political space for aid and development finance from China. Furthermore, this paper pointed out that, on the process to creating the international development assistance system, the Tanzanian government has learned to manage aid and been skillfully building beneficiary systems for development not only from DAC donors, but also from China.
    Keywords: poverty reduction regime , China , aid effectiveness , DAC donor
    Date: 2014–10–21
  5. By: Chowdhury, Shyamal; Roy Chowdhury, Prabal; Sengupta, Kunal
    Abstract: This paper develops a theory of sequential lending in groups in micro-finance that centers on the notion of dynamic incentives, in particular the simple idea that default incentives should be relatively uniformly distributed across time. In a framework that allows project returns to accrue over time, as well as strategic default, we show that sequential lending can help resolve problems arising out of coordinated default, thus improving project efficiency vis-a-vis individual lending. Inter alia, we also provide a justification for the use of frequent repayment schemes, as well as demonstrate that, depending on how it is manifested, social capital has implications for project efficiency and borrower default. We next examine the optimal choices for the MFI and derive conditions for the optimality of the group lending arrangement. Our framework also provides for some plausible hypotheses as to why there has been a recent transition from group to individual lending.
    Keywords: Collusion; coordinated default; dynamic incentives; frequent repayment; group-lending; MFI competition; micro-finance; sequential financing; social capital; switch to individual lending
    JEL: D7 D9 G2 O2
    Date: 2014–09
  6. By: Asian Development Bank (ADB); (East Asia Department, ADB); ;
    Abstract: This case study documents HIV prevention work on the Longbai Expressway in Guangxi in the People’s Republic of China. It describes how to build HIV prevention into existing processes in road construction projects. It also highlights opportunities and constraints for HIV prevention work in the transport context. Finally it brings examples to show that the basic model can be adapted and replicated.
    Keywords: HIV/AIDS, HIV prevention, road construction, transport, road construction workers, PRC, Guangxi, ADB
    Date: 2014–04

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