nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2023‒01‒23
six papers chosen by
Arvi Kuura
Tartu Ülikool

  1. Processes-oriented maturity framework for Lean Manufacturing with health-at-work and performance management objectives By Gilles Galichet; Roberta Costa Affonso; Vincent Cheutet
  2. Social Distancing and Risk Taking: Evidence from a Team Game Show By Jean-Marc Bourgeon; José de Sousa; Alexis Noir-Luhalwe
  3. Voluntary Equity, Project Risk, and Capital Requirements By Haufler, Andreas; Lülfesmann, Christoph
  4. Road and Rail Transport Infrastructure in the Philippines: Current State, Issues, and Challenges By Navarro, Adoracion M.; Latigar, Jokkaz S.
  5. Answering the social discount rate question By Szekeres, Szabolcs
  6. Public-Private Partnerships in Agriculture Value Chains: The Case of Project ConVERGE in the Philippines By Ballesteros, Marife M.; Ancheta, Jenica A.

  1. By: Gilles Galichet; Roberta Costa Affonso (QUARTZ - Laboratoire QUARTZ - UP8 - Université Paris 8 Vincennes-Saint-Denis - ENSEA - Ecole Nationale Supérieure de l'Electronique et de ses Applications - ISAE-Supméca - Institut Supérieur de Mécanique de Paris); Vincent Cheutet (DISP - Décision et Information pour les Systèmes de Production - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - INSA Lyon - Institut National des Sciences Appliquées de Lyon - Université de Lyon - INSA - Institut National des Sciences Appliquées)
    Abstract: Lean Manufacturing is recognised as an approach that improves companies' performance through the elimination of non-value-added activities. However, not all companies implement this approach since there is no standard method for doing so, and some authors have even identified it as a source of stress or occupational illnesses. In light of this, how can an action plan, for its implementation, be defined while guaranteeing the synergy between industrial performance and health at work? Maturity frameworks are tools that identify a company's level of capability regarding the studied parameters, and so can serve as a guide in their organisational transformation. In this article we propose a process-oriented maturity framework for Lean Manufacturing transformation that considers health at work and the company's managerial and operational performance. The framework is illustrated through a company's evolution over the course of a 5-year project, and is then discussed.
    Keywords: Health at work, industrial performance, maturity, organisational transformation, capability, Lean Manufacturing
    Date: 2022
  2. By: Jean-Marc Bourgeon (UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique); José de Sousa (Université Paris-Saclay, RITM - Réseaux Innovation Territoires et Mondialisation - Université Paris-Saclay, LIEPP - Laboratoire interdisciplinaire d'évaluation des politiques publiques (Sciences Po) - Sciences Po - Sciences Po); Alexis Noir-Luhalwe (Université Paris-Saclay, RITM - Réseaux Innovation Territoires et Mondialisation - Université Paris-Saclay)
    Abstract: We examine the risky choices of pairs of contestants in a popular radio game show in France. At the onset of the COVID-19 pandemic, the show, held in person, had to switch to an all-remote format. We find that such an exogenous change in social context affected risk-taking behavior. Remotely, pairs take far fewer risks when the stakes are high than in the flesh. This behavioral difference is consistent with prosocial behavior theories, which argue that the nature of social interactions influences risky choices. Our results suggest that working from home may reduce participation in profitable but risky team projects.
    Abstract: Nous examinons les choix risqués de paires de participants à un jeu radiophonique populaire en France. Au début de la pandémie de COVID-19, l'émission, qui se déroulait en personne, a dû passer à un format entièrement à distance. Nous constatons qu'un tel changement exogène du contexte social a affecté le comportement de prise de risque. À distance, les paires prennent beaucoup moins de risques lorsque les enjeux sont élevés qu'en chair et en os. Cette différence comportementale est cohérente avec les théories du comportement prosocial, qui soutiennent que la nature des interactions sociales influence les choix risqués. Nos résultats suggèrent que le travail à domicile peut réduire la participation à des projets d'équipe rentables mais risqués.
    Keywords: COVID-19, Social Distancing, Social Pressure, Decision Making, Risk, Distance sociale, Pression sociale
    Date: 2022–10–26
  3. By: Haufler, Andreas (LMU Munich); Lülfesmann, Christoph (Simon Fraser University)
    Abstract: We introduce a model of the banking sector that formally incorporates a buffer function of capital. Heterogeneous banks choose their portfolio risk, bank size, and capital holdings. Banks voluntarily hold equity when the buffer effect against the risk of default outweighs the cost advantages of debt financing. In this setting, banks with lower monitoring costs are larger, choose riskier portfolios, and have less equity. Moreover, binding capital requirements or levies on bank borrowing are shown to make higher-risk portfolios more attractive. Accounting for banks' interior capital choices can thus explain why higher capital ratios incentivize banks to undertake riskier projects.
    Keywords: voluntary equity; capital requirements; bank heterogeneity;
    JEL: G28 G38 H32
    Date: 2022–12–27
  4. By: Navarro, Adoracion M.; Latigar, Jokkaz S.
    Abstract: In this study, the analysis of quantity and quality indicators in the road and rail transport sector shows that the Philippines continues to suffer from inadequate and poor quality road and rail transport infrastructure. In most metrics of comparison with ASEAN neighbors, the Philippines is also behind in improving the quantity and quality of its road and rail transport infrastructure. The assessment of targets and achievements in the Philippine Development Plan, the Public Investment Program, and the expenditure program reveals that many of the targets were unmet. The low absorptive capacity, as indicated in unmet expenditure targets, of the major agencies in charge of the road and rail transport sector suggests problems in implementation. Digging deeper into the implementation challenges, the study finds that the persistent problems are right-of-way acquisition, financing, political intervention, weak capacity at the local government level, natural calamities, and project management issues. There were also newly introduced problems. One is the adverse effects of the pandemic on the materials and manpower supply chain, but systems for addressing these are already in place, and implementing agencies just need to continue improving the implementation of revised procedures in response to the pandemic. Another newly introduced problem is the difficulty of implementing projects under the “for later release” funds category related to Congress-introduced new budget items or budget increases. Meanwhile, the public is getting caught in the battle of wills between two major influences—the legislators and the sitting President—on budget allocation, releases, and implementation. At the national level, seeking reform champions for minimizing the Congressional introductions and fast-tracking executive approvals is necessary. At the regional level, one solution that can be attempted is for government officials to strengthen the practice of project identification and prioritization through the Regional Development Council processes. Comments to this paper are welcome within 60 days from the date of posting. Email
    Keywords: transport infrastructure;public investment program;road transport;rail transport;infrastructure quality
    Date: 2022
  5. By: Szekeres, Szabolcs
    Abstract: Discounting project net flows with prescriptive rates fails to reflect costs of capital; discounting them with descriptive rates fails to reflect intertemporal preferences. A two-rate discounting method is described by which a descriptive rate is used to forecast costs of capital and a prescriptive rate is used to discount the all-inclusive net benefit flow. Using this method is the equivalent of discounting with the social time preference rate (SPTR) after having adequately shadow-priced investments, which satisfies in full the requirements of both discounting approaches. It also results in an easy to apply rule: for projects to be economically feasible their IRR should exceed both the STPR and the social opportunity cost rate (SOCR). The long-standing social discount-rate dilemma is thus solved, for in fact there is no choice. Both rates must be used. An agent-based capital market model with multiple actors and two financial instruments, one of them stochastic, illustrates and provides additional insights.
    Keywords: Social discount rate; Prescriptive discounting; Descriptive discounting; Two-rate discounting; Declining discount rates; Ramsey rule.
    JEL: D61 H3
    Date: 2022–11–24
  6. By: Ballesteros, Marife M.; Ancheta, Jenica A.
    Abstract: This study examines the public-private-producers partnership (4Ps) model for agriculture value chain development implemented through Project ConVERGE of the Department of Agrarian reform. The model adopted a cluster approach whereby farmer groups are organized into clusters to coordinate their production methods to produce good uniform products and other business activities. The interventions or assistance from government agencies and the private sector are coordinated through the Project Management Office of ConVERGE at the central, regional, and provincial levels. The study notes that the 4Ps is a form of a facilitator-driven agriculture value chain that is a suitable strategy given the level of agriculture development in the country. The 4Ps value chain interventions have addressed some of the constraints small farmers face to participate in the value chain. Farmer cooperatives that received the interventions on farm equipment and processing facilities reported increased production, expansion of production area, improved mobility, and less dependence on traders. However, markets remain limited, and the cooperatives still lack the volume and quality of production that major buyers, including exporters, require. The key challenges include the lack of adequate extension services, including organizational training; inadequate capital and credit access of farmer cooperatives; limited subsidy for infrastructure development and other value chain interventions; weak cooperatives or farmers organizations; and poor geographic conditions. Government plays a major role in addressing these challenges. It needs a coordinated plan among partner agencies for extension and capacity building. Given bureaucratic problems and other institutional constraints, there is also a need to have a good selection of private sector partners both as service providers and financing partners. Market access can be improved through links with financial institutions and agro-input dealers and through the development of brands and certifications. In the case of farmer organizations, they need to strengthen their savings and insurance programs to enhance credit access and hedge against climate shocks. Comments to this paper are welcome within 60 days from the date of posting. Email
    Keywords: agriculture;public-private partnership;agribusiness;supply chain;agrarian reform
    Date: 2022

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.