nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2017‒05‒14
nine papers chosen by
Arvi Kuura
Tartu Ülikool

  1. Guest Editorial: Business Models/Projects – Design, Venture, Manage and Evaluate By Rao, Narendar V.; Reddy, K.S.; Arrawatia, Rakesh
  2. Organizational Efficency or Bureaucratic Quagmire: Do Quality at Entry Assessments Improve Project Performance? By Leonardo Corral; Nancy McCarthy
  3. A technological model of the R&D process and its implications with scientific research and socio-economic activities By Angelo Bonomi
  4. Project appraisal: A revival is long overdue By Clive Bell
  5. An Integrated Appraisal of the Péligre Electricity Transmission Line Rehabilitation Investment By Salci, Sener
  6. Is there a strategy in China’s health official development assistance to African countries? By Marlène GUILLON; Jacky MATHONNAT
  7. Promises and Endogenous Reneging Costs By Heller, Yuval; Sturrock, David
  8. Evaluation of the Fruit Tree Productivity Project in Morocco: Design Report By Evan Borkum; Anitha Sivasankaran; Jane Fortson; Kristen Velyvis; Christopher Ksoll; Elena Moroz; Matt Sloan
  9. Does the community-based development program contribute to the economic welfare of rural households? Evidence from a randomized experiment in Afghanistan By Sarwari, Abdul Nafi; Jinnai, Yusuke

  1. By: Rao, Narendar V.; Reddy, K.S.; Arrawatia, Rakesh
    Abstract: A number of literature reviews on business models and innovation have suggested that business models are mainly rooted in resource-based view (RBV) and transaction cost economics (TCE) theories. Since business models is a burgeoning research field in strategic management, scholars have paid a great attention toward conceptualizing what business models are, how business models are evolved, and what theories explain business models. The special issue welcomed scholars to submit their academic research on various themes in business models, including innovative ideas to architecture ideal business models, motives of innovation in business models, financing business enterprises, venture capitalists role in business projects, bank financing, leasing and contracting in new business projects, inventory and supply chain issues in projects, barriers to success in new business models, evaluating project performance, cost estimation and control in project management, and socially-driven vs. value-driven projects, among others. The special issue call for papers has received a good response from strategy and finance researchers globally. Following double blind review system, we have accepted six articles for the Issue in 2017.
    Keywords: Business Models, Business innovation, Emerging economies, Economic Development, Crowdfunding Investment
    JEL: M1 M2 O1
    Date: 2017–05
  2. By: Leonardo Corral; Nancy McCarthy
    Abstract: Do quality at entry assessments enhance the delivery of development projects? In this paper we take advantage of approval and execution systems in place at the Inter-American Development Bank (IDB) to examine whether projects that have higher quality at entry--captured through grading scores provided by a checklist--perform better in terms of project implementation performance indicators. Implementation indicators include measures based on actual versus planned schedule of activities and cost outlays, as well as percent of loan disbursed. The analysis suggests higher scores on project logic and economic analyses at entry have had a positive impact on project performance. However, monitoring and evaluation and impact assessment scores had limited impacts on performance. The evidence supports the hypothesis that the use of a checklist can be an effective framework for assessing quality at entry for IDB projects, though there is scope to improve the checklist for certain indicators.
    Keywords: Development effectiveness matrix, Development effectiveness framework, Project evaluation, Evaluability, Monitoring & Evaluation, Impact assessment, Quality at Entry, Microeconomic Analyses of Economic Development, International Linkages to Development, Project Analysis, Project Evaluation, Quality at Entry, Development Effectiveness, Project Performance
    JEL: H43 O22 O19 O12
    Date: 2017–03
  3. By: Angelo Bonomi (CNR-IRCRES, National Research Council, Research Institute on Sustainable Economic Growth, Moncalieri, Italy)
    Abstract: This work describes a model of the R&D process derived by technology management and experience in carrying out this type of activity. The model gives a comprehensive description of the numerous processes of technological nature involving innovations from science to business. The model sees R&D as an organizing activity of fluxes of knowledge and capitals with a dynamics that is determined by R&D projects and their implementing rather than by R&D investments. The model recognizes the existence of a general knowledge generated by R&D activities, formed either by successful or abandoned projects, not necessarily linked to the objectives of the projects, and diffusing among the various actors making R&D in the distributed innovation system existing in conditions of open innovation. Such general knowledge has a role of driving force in developing innovative ideas and saving R&D costs. The model separates neatly the R&D process from scientific research considering existence of an intertwining process between research and R&D. About relation with socio-economic factors determining the effects of new technologies, the model presents different views about relation of R&D investments and economic growth. In fact it considers the inexistence of limits to generation of new technologies, when unlimited financing of R&D is available, and highlights the importance of the specific innovative system of a country in determining the contribution of R&D investments to its economic growth. Concluding the model considers that economic growth does not depend actually on R&D investments, that should be considered rather a means, but on the intensity of generation of innovative ideas, that depends on the efficiency of the territorial innovative system, and on adopted strategies and availability of capitals financing their development joined with an effective industrial organization.
    Keywords: research & development, R&D model, R&D management, technology innovation, knowledge spillover, socio-economic growth
    JEL: O30 O31 O47
    Date: 2017–02
  4. By: Clive Bell
    Abstract: This paper makes the case for the systematic appraisal of public sector projects using shadow prices as the signals of social scarcities. In so doing, it attempts to redress the balance between estimating inputs and outputs, central though that task is, and valuing them correctly. The account of how to estimate shadow prices for this purpose pays particular attention to the social discount rate and how to treat uncertainty at both the project and economy-wide levels. There follows an illustration of the ideas and apparatus in practice using an evaluation of India’s large rural roads programme (PMGSY) in connection with a World Bank loan. A discussion of the more general uses of shadow prices in evaluating decisions in the public sector is complemented by a series of proposals for the implementation of systematic procedures for project appraisal in government and international donors.
    Date: 2017
  5. By: Salci, Sener
    Abstract: The analytical challenges in evaluating the impacts of transmission line investments have vexed practitioners and electricity market regulators. The purpose of this study is to provide a guideline for improving the accuracy and predictability of the impacts of electricity rehabilitation projects. The subject is too broad to address completely here. The proposed guideline is suitable for evaluations of such project implemented in a broken electricity network. In such case, the demand for electricity is deterred, the supply of the electricity is unreliable, and the system is far away from its least-cost optimum production/consumption level. The guideline does not rebut the catalog of existing evaluation models or approaches. The guideline utilizes them for a reasonable ex-ante assessment to identify “good” projects that satisfy the economic and public objectives of the economy. An integrated cost-benefit analysis (CBA) framework is recommended to appraise such projects along with allocating the impacts to stakeholders in a manner that is commensurate with the net benefits they receive. Such an integrated analysis is much more than a set of procedures for estimating the expected net present values or rates of return of the project.
    Keywords: Electricity, Transmission Line, Rehabilitation Investment, Reliability, Cost-Benefit Analysis, Haiti
    JEL: D61 H43 L94
    Date: 2017–05–03
  6. By: Marlène GUILLON; Jacky MATHONNAT (Centre d'Etudes et de Recherches sur le Développement International(CERDI))
    Abstract: Chinese health official development assistance (ODA) to Africa has largely increased since the beginning of the 2000’s. Even if China now ranks among the top ten bilateral donors for health aid in Africa very little is known about the determinants of Chinese health ODA to African countries. Our objective is to study the factors associated with Chinese health ODA to sub-Saharan Africa in the 2000-2013 period. We investigate the role of three types of factors that might influence the allocation of Chinese health aid: the needs of recipient countries, their merits and the self-interest of China. Chinese health ODA is measured using the 1.2 version of the AidData database constructed by the William & Mary University, the Brigham Young University and the non-governmental organization Development Gateway. In total, 389 health aid projects were financed by China in Africa between 2000 and 2013, accounting for a total amount of 2011 US$789 million. On these 389 projects, 194 (59%) correspond to the dispatch of medical teams, 109 (24%) to the sending of medical equipment or drugs and 77 (16%) to health infrastructure construction or rehabilitation. The annual number of health projects financed by China in Africa has increased sharply after the 3rd Forum on China-Africa Cooperation (FOCAC) in 2006. We study the factors associated with the number of health projects and the amount of ODA received each year by African countries between 2000 and 2013. We stratify the analysis by types of projects (medical team dispatches/infrastructure and medical equipment or drugs projects) and by sub-periods (2000-2006/2007-2013). We use Poisson regressions to estimate both the number of projects and the amount of ODA received as Poisson regressions were shown to outperform OLS and Tobit models in the presence of heteroskedasticity and many zero observations. Pooled regressions, rather than fixed effect regressions, are used in order to exploit both inter and intra-country heterogeneity for the identification of factors associated with the allocation of Chinese health aid. We replicate the analysis using the shares of health projects and health ODA amount received by African countries each year using the fractional probit method relevant for the case of proportions as dependent variables Our results show that the motives of Chinese health aid have changed over the 2000-2013 period. In particular, Chinese political and economic interests, as measured by recipient countries’ UNGA voting alignment with China and openness rate to China, were less important in Chinese health aid allocation decisions over the 2007-2013 period that followed the 3rd FOCAC compared to the 2000-2006 period. On the contrary, taking into consideration health needs of recipient countries became more visible in Chinese health aid allocation decisions after 2006. Then, Chinese health diplomacy seems to have evolved from a rather “selfish” aid focused on political and economic self-interests to a more altruistic aid focused on health needs of recipient countries. The empirical analysis also highlights the complementarity of Chinese health ODA with its ODA in other sectors and that the allocation of Chinese health aid in African countries does not appear to be heavily related to health aid provided by traditional bilateral donors, suggesting that health aid cannot be seen as a way for China to promote its international visibility.
    Keywords: Health aid, Aid allocation, China, Africa.
    JEL: I18 I15 F35
    Date: 2017–05
  7. By: Heller, Yuval; Sturrock, David
    Abstract: We present a novel theoretical mechanism that explains the capacity for non-enforceable communication about future actions to improve efficiency. We explore a two-player partnership game where, before choosing a level of effort to exert on a joint project, each player makes a cheap talk promise to their partner about their own future effort. We allow agents to incur a psychological cost of reneging on their promises. We demonstrate a strong tendency for evolutionary processes to select agents who incur intermediate costs of reneging, and show that these intermediate costs induce second-best optimal outcomes.
    Keywords: Promises, lying costs, joint projects, input games, partnerships.
    JEL: C73 D03
    Date: 2017–04
  8. By: Evan Borkum; Anitha Sivasankaran; Jane Fortson; Kristen Velyvis; Christopher Ksoll; Elena Moroz; Matt Sloan
    Abstract: In this report we describe the designs for two evaluations of the MCC-funded Fruit Tree Productivity Project in Morocco: (1) an evaluation of the modern olive oil processing units funded by the project, and (2) an evaluation of the project’s investments in irrigated olive and date areas.
    Keywords: Morocco, agriculture, trees
    JEL: F Z
  9. By: Sarwari, Abdul Nafi; Jinnai, Yusuke
    Abstract: This study evaluates the impacts of a community-based development program on the economic welfare of rural households in Afghanistan. Using a randomized experiment data collected by National Solidarity Program (NSP), this paper uses Ordinary Least Square Method (OLS) to eliminate the selection bias. The results show that the program decreased the economic welfare of rural households in the short-term due to the small amount of cash inflow and high expectations of the rural households. However, the program increased the economic welfare of rural households in the medium-term through the completion of infrastructure and irrigation projects. In particular, the program has increased household income, consumption, and agriculture productivity of the treatment group on average by 20, 11, and 19 percent respectively. Moreover, the study concluded that channeling resources under the community-based development program approach was an effective way to target the rural households in medium-term. Future research is required to capture the political, institutional, and project management problems that could influence the impact of the community-based program.
    Keywords: Ordinary Least Square Method,Community-Based Development,Selection Bias,Economic Welfare
    JEL: D1
    Date: 2017

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