nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2015‒11‒01
seven papers chosen by
Arvi Kuura
Tartu Ülikool

  1. Project Evaluation of Transportation Projects: an Application of Financial Computable General Equilibrium Model By Euijune Kim; Geoffrey J.D. Hewings; Hidayat Amir
  2. Economic Evaluation of Small-scale Renewable Electricity Generation Project with Community Participation by Regional I-O Analysis in which WTW is incorporated By Eiji Ohno; Ryuta Mori; Akira Matsumoto
  3. Prizes versus Contracts as Incentives for Innovation By Yeon-Koo Che; Elisabetta Iossa; Patrick Rey
  4. The Leader process as a European policy for local development: A comparison of the implementation in three European member states By Marielle Berriet-Solliec; Catherine Laidin; Denis Lépicier; Hai Vu Pham; Kim Pollermann; Petra Raue; Gitta Schnaut
  5. Paying smallholders not to cut down the Amazon forest: Impact evaluation of a REDD+ pilot project By Gabriela Simonet; Julie Subervie; Driss Ezzine-de-Blas; Marina Cromberg; Amy Duchelle
  6. Contest as a method of exposure of the quality of municipal strategies By Boris Zhikharevich; Taras Pribyshin
  7. Analysis on Service R&D budgeting and strategy in Korea By SUKPIL KIM; DONGHYUN KIM

  1. By: Euijune Kim; Geoffrey J.D. Hewings; Hidayat Amir
    Abstract: We develop a Financial Computable General Equilibrium Model (FCGE) model that can analyse the economic impacts of the infrastructure investment projects and their financing options on growth and distribution in Indonesia economy. It is possible to estimate growth and distributional effects of each project based on the financing method (government financing with tax revenues, government bond, and private financing) over the construction and operation periods if the information on the investment expenditures, the construction location and the accessibility of the project are injected into the FCGE model. The government financing with tax revenues could generate higher effects on GDP than two other financing methods regardless of projects. However, the presented values of benefits over costs are less than one for two sample highway projects, so they cannot be sustainable with regard to economic assessment.
    Keywords: Transportation Investment; Infrastructure Policy; Financial CGE Model
    JEL: C68 D58 H54 O18
    Date: 2015–10
  2. By: Eiji Ohno; Ryuta Mori; Akira Matsumoto
    Abstract: Small-scale renewable electricity generation projects have the potential to address not just the need to reduce greenhouse gas emissions to combat climate change, but also to provide local, sustainable economic and community revitalization. JapanÂfs experience following the Great East Japan Earthquake has also demonstrated the potential fragility of too-heavy reliance on large-scale power plants. Small-scale projects, such as those using solar, wind, or hydroelectric resources, can thus also boost a regionÂfs energy self-sufficiency and ability to withstand natural disasters. In addition, small-scale operations mean that areas unsuitable to larger plants or installations can become productive - in the case of hydroelectric plants, as discussed in this paper, smaller streams can be tapped for power, with the additional benefit of not requiring costly dam construction. These benefits indicate the great potential for small-scale electricity generation projects, and this paper explores their economic feasibility in practice, using a hypothetical case study in a small regional Japanese city. The hypothetical plant is intended to provide both environmental and economic benefits to the local community, and the various trade-offs between levels of each are studied. We evaluate the project economically by using the regional I-O (input output) analysis in which the WTW (willingness to work) is incorporated. The WTW results for the project have been estimated by using the conjoint analysis as a function of its various attributes, namely revenue from the projectÂfs electricity sales, profits earned for the local community, and rewards given to contributors. The results show that if the reward for volunteer activity is set higher, the amount of volunteer labor is increased, and the operating surplus of the project is also increased. As a result, it is possible to reduce the subsidies of regional governments with respect to the project, and it is possible to devote that amount of budget to improvement of other administrative services. Subsequently, when this type of small hydroelectric generation project with citizen participation is introduced, household utility levels increase. Understanding the dynamism between these factors can allow regional governments to adapt the scheme to best fit the needs of individual regions. JEL classification: Q42, Q51, R13 Keywords: small-scale renewable electricity generation, community participation, community revitalization, regional input output analysis, willingness to work
    Keywords: small-scale renewable electricity generation; regional input output analysis
    JEL: Q42 Q51 R13
    Date: 2015–10
  3. By: Yeon-Koo Che (Department of Economics, Columbia University); Elisabetta Iossa (DEF and CEIS,University of Rome Tor Vergata, CEPR, IEFE-Bocconi and EIEF); Patrick Rey (Toulouse School of Economics, GREMAQ, IDEI and CEPR)
    Abstract: The procurement of an innovation involves motivating a research effort to generate a new idea and then implementing that idea efficiently. If research efforts are unverifiable and implementation costs are private information, a trade-off arises between the two objectives. The optimal mechanism resolves the tradeoff via two instruments: a monetary prize and a contract to implement the project. The optimal mechanism favors the innovator in contract allocation when the value of innovation is above a certain threshold, and handicaps the innovator in contract allocation when the value of innovation is below that threshold. A monetary prize is employed as an additional incentive but only when the value of innovation is sufficiently high.
    Keywords: Contract rights, Inducement Prizes, Innovation, Procurement and R&D.
    JEL: D44 H57 D82 O31 O38 O39
    Date: 2015–10–22
  4. By: Marielle Berriet-Solliec; Catherine Laidin; Denis Lépicier; Hai Vu Pham; Kim Pollermann; Petra Raue; Gitta Schnaut
    Abstract: European public policies in field of regional and rural development and territorial cohesion have a large role in Europe. Regional and rural development policies are designed taking into account the principles of subsidiarity, partnership and additionality. According to these principles, the European Union defines general guidelines and the member states or their sub-regional levels develop their specific strategy and way of implementation in their RD program within this frame. In this logic, Leader program, established by the European Union in 1991, aims to support the development of strategies at a sub-regional level that meet specific challenges of the territory; therefore, a bottom-up approach is implemented that involves public and private stakeholders. The presentation will show results of the comparative analysis of the implementation modalities of the Leader program at the national, regional and local level in Germany, France and Italy. These three countries show significant national level differences in terms of political and administrative organization and the decentralization of power. The analysis is based on a literature review, the examination of program and guidance documents, and on first results of case studies. Our main approach is based on the theory of multi-level governance (Bache & Flinders 2004; Pollermann et al. 2014) - understood as a mode of coordination - involving different spheres of actors and forms of regulation of various kinds (Jessop 2002). According to the expectations of some of the proponents of a new governance, the state in the multi-level governance setting has given up some of its control functions in favor of a more co-ordination role (Bache and Flinders, 2004 ; Buller, 2000 ; Mantino, 2009) or 'gouvernance à distance' (Epstein, 2005). Our findings highlight the diversity of LEADER implementations in the three countries under study and the central role of the decentralization of the member states structure for the performance of LEADER. Bibliography Bache, I., Flinders, M., 2004. Multi-level Governance. Oxford Buller H., 2000, « Re-creating rural territories: Leader in France », Sociologia Ruralis, vol. 40, no 2, p. 190 199. Epstein R., (2005), « Gouverner à distance : quand l?État se retire des territoires », Esprit, 319 Jessop, B., 2002, Liberalism, neoliberalism, and urban governance : A state-theoritical perspectivie. Antipode, 34(3) : 452-472 Mantino F., Bolli M., Fagiani P. Tarangioli S., 2009. Report on policy delivery systems and their relations with types of governance models : assessing the impact of rural development policies (incl. Leader) : deliverable D3.3. Pollermann, K., Raue, P. und Schnaut, G. 2014: Multi-level governance in rural development : analysing experiences from LEADER for a Community-Led Local Development [CLLD] . paper contribution for 54th European Regional Science Association [ERSA] Congress, 26 - 29 August 2014 in St.Petersburg. Internetseite EconStor: [02.02.2015]
    Keywords: H11
    JEL: R
    Date: 2015–10
  5. By: Gabriela Simonet; Julie Subervie; Driss Ezzine-de-Blas; Marina Cromberg; Amy Duchelle
    Abstract: We estimate the additional effects of a REDD+ pilot project offering Payments for Environmental Services to reduce deforestation by smallholders in the Brazilian Amazon. We collected original data from 181 individual farmers. We use DID-matching and find evidence that supports the parallel trend assumption. We estimate that an average of 4 ha of forest have been saved on each participating farm in 2014, at the expense of pastures versus croplands. This amounts to a decrease in the deforestation rate of about 50 percent. We find no evidence of leakage effects. Finally, we find that the project is cost-effective.
    Date: 2015–10
  6. By: Boris Zhikharevich; Taras Pribyshin
    Abstract: Objectives. Find the answer to the question ?What are the qualities of a ?good? municipal strategy of socio-economic development??. Methods. In order to reach a consensus about the quality of municipal strategy it was proposed to use the Contest of the urban strategies, which was held in the cities in Russia with population over 100.000 people. The contest resulted in division of the participants in 3 groups: winners: Orsk, Samara, Cherepovets; finalists: Vologda, Irkutsk, Kaliningrad, Novoshakhtinsk; semifinalists: Bryansk, Krasnoyarsk, Sochi, Tambov, Ulan-Ude. The contest created three sources to define a good strategy: feedback from the jury; analysis of strategies of the winners; feedback from mayors of the finalist cities. Results. 1. Analysis of the feedback from the jury gives us the following list of successful strategy characteristics: Frequently occurring: ? Existence of monitoring system and established implementation mechanism ? Ambitiousness correlative with the city scale and implementation mechanism ? Existence of title projects Less frequently occurring: Involvement of the head of the city and the whole community; Human-oriented; Focus on specific projects etc. 2. The content of all the strategies was coded with the special code developed by Leontiev?s Center to formalize the comparison of the leading and outsiders strategies. Common features of leading strategies: -ambitiousness -complexity (big number of declared and elaborated routes) -active use of title projects -attention to economical diversification issues -usage of institutional and constitutional economic support -special attention to educational and cultural development -special attention to implementation via mechanisms of civil autonomy and effectiveness of local authorities 3. Leading cities mayors stated that a good strategy is the one which is: Cooperative ? a strategy elaborated collectively leading to consolidation of local community and key authorities; Independent ? a strategy elaborated by the local community with no governmental influence, irrespective; Deliberative - a strategy elaborated by the local community considering its own interests; Ambitious - a strategy elaborated to reveal the potential of local resources and inspired by enthusiasm of locals; Realistic ? a strategy based on adequate situation analysis and establishing achievable goals and purposes; Realizable ? a strategy provided with an elaborated mechanism of implementation; when goals and purposes are being ambitious but provided with clear instruments of resource mobilization, performance control and results overview; Stable ? a strategy that does not change dramatically despite radical changes or possible power shifts. The prevalent opinion in Russia in 2014 is: a good municipal strategy is supposed to be ambitious, provided with an elaborated mechanism of implementation and monitoring, focusing on title projects, developed under control of city head in cooperation with key participants of urban development which is clear and approved by local community.
    Keywords: Municipal strategic planning; strategies; socio-economic develjpment
    JEL: R11
    Date: 2015–10
  7. By: SUKPIL KIM (Korea Institute of S&T Evaluation and Planning); DONGHYUN KIM (Korea Institute of S&T Evaluation and Planning)
    Abstract: Recently the decline in growth potential for the field of traditional manufacturing is one of important issue to be solved in Korea. Development achieved by new technologies, especially IT technology, have enlarged market size and accelerated economic growth. Government has been focused on the servitization in the industry and started to establish national R&D plan in service for service R&D. Since 2009 the total budget for service R&D increased from 50 million dollars to 100 million dollars in 2014. Total amount is not so large but the increase rate was very high. In this study we tried to investigate the R&D products from the investigation in service R&D area from government. However, it is very difficult to measure or evaluate the results from service R&D because it is invisible and disappears as it is used. It means when we acquire good results or conclusion for R&D project they will be applied in the industry directly and it is hard to extract them only. So we studied R&D projects itself. The technologies related to the projects can be a qualitative measure. The R&D projects related to service R&D are collected and analyzed in terms of ‘degree of technical convergence’. In the initial stage of investment in service R&D, the technologies related to ICT field had large ripple effect on service R&D projects, but it gradually changes. The technology such as sensibility ergonomics, health informatics, business and etc. becomes to show large ripple effects on service R&D. It is thought that the understanding on service R&D has varied from the simple enhancement in service industry by using IT technology to the study on the service activity itself even though the intrinsic character of service R&D has not been defined
    Keywords: Service R&D, technical convergence, ICT

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