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on Project and Portfolio Management |
| By: | Anastasios Michailidis; Efstratios Loizou; Georgios Theodosiou |
| Abstract: | For most of the last century, the role of private and public sectors in the infrastructure projects were clear. For instance, public authorities were generally in charge of financing and building new infrastructures. Over the last decade, that position has begun to change. Faced with pressure to reduce public sector debt and, at the same time, expand and improve public facilities, governments and public authorities have looked to private sector finance, and have invited private sector entities to enter into long-term contractual agreements which may take the form of construction or management of public sector infrastructure facilities by the private sector entity, or the provision of services (using infrastructure facilities) by the private sector entity to the community on behalf of a public sector body. This paper deals with the new issues raised by the public-private partnerships system or, more generally, by any system in which the new infrastructure is partially financed by its users. Is there, in this case, a new economic rationality of public authorities? Particularly, is there an optimal way to rank projects? This paper discusses the choice by the public authority of the most efficient investing programme in irrigation water infrastructures. More specifically, it studies the optimal ranking of project implementation when these projects are partially self-financed by their own revenues. In this case, the optimal investment programme must be defined under a constraint of annual subsidies. This paper demonstrates that the optimal ranking is not necessarily the ranking of decreasing socioeconomic internal rate of return. This counter-intuitive result can be demonstrated by a general approach. Analytical calculations are not useful in this discrete problem because each programme is an ordered subset of projects. Therefore, there is no continuous variation linking the various programmes and the usual tools of optimization, such as differential calculus, are useless. Thus, we adopt here a discrete optimization analysis based on standard techniques in the physics area, such as Monte Carlo sampling. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa06p395&r=ppm |
| By: | Thorsten Beckers (Workgroup for Infrastructure Policy (WIP), Technische Universität Berlin); Christian von Hirschhausen (Chair of Energy Economics and Public Sector Management, Technische Universität Dresden); Jan Peter Klatt (Workgroup for Infrastructure Policy (WIP), Technische Universität Berlin) |
| Abstract: | This article analyzes the efficiency impacts of PPP-projects in the highway sector. The economic analysis concludes that the PPP-approach should primarily be considered as an alternative procurement strategy. PPP can be suitable for the new built, extension and renewal of certain highway stretches to reduce costs, whereas the application of the PPP approach for entire networks seems to go along with cost increases. For achieving the potential cost reductions in PPPs for stretches, risks should be allocated in an efficient way between the involved parties, and tendering procedures should be competitive. Apart from that, well-elaborated contracts as well as credible and stable public institutions in charge of preparing, tendering and monitoring the projects are necessary to ensure the success of PPPs. It is also found that concession models which combine the PPP-approach with a remuneration of the concessionaire based on user payments are not an appropriate instrument to solve financial problems in the highway network; they should only be considered in exceptional cases for stretches with little traffic deviation in the case of tolling. The lack of funding in the German federal trunk road sector should rather be addressed by the implementation of a road fund which should receive earmarked user charges. A further result is that the current PPP-models in Germany (A-Model, F-Model, and Functional Construction Contract) feature some design deficits and need to be adapted in order to achieve the goal of increased cost efficiency. |
| Keywords: | PPP, concessions, highways, road fund, Germany |
| JEL: | D23 H40 L92 |
| Date: | 2006–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:cni:wpaper:2006-03&r=ppm |
| By: | Daniel Krähmer (Free University Berlin, Department of Economics, Boltzmannstr. 20, D-14195 Berlin, Germany. kraehmer@wiwiss.fu-berlin.de); Helmut Bester (Free University Berlin, Department of Economics, Boltzmannstr. 20, D-14195 Berlin, Germany. hbester@wiwiss.fu-berlin.de) |
| Abstract: | This paper analyses the relation between authority and incentives. It extends the standard principal-agent model by a project selection stage in which the principal can either delegate the choice of project to the agent or keep the authority. The agent's subsequent choice of effort depends both on monetary incentives and the selected project. We find that the consideration of effort incentives makes the principal less likely to delegate the authority over projects to the agent. In fact, if the agent is protected by limited liability, delegation is never optimal. |
| Keywords: | authority, delegation, incentives, moral hazard, principal-agent problem, limited liability |
| JEL: | D82 D86 |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:190&r=ppm |
| By: | Stefano Comino (University of Trento); Fabio Manenti (University of Padua); Marialaura Parisi (University of Brescia) |
| Abstract: | Open source is an example of user-centric innovation initiated by an individual or group of users to satisfy their specific needs; the more a software evolves towards a stable release able to address the requirements of its developers, the more successful the project. In this paper we use a large data-set obtained from SourceForge.net to estimate the impact of observed project characteristics on the evolution of the source code from a preliminary release to its mature version. We show that while projects distributed under highly restrictive licensing terms (GPL) have a significantly smaller probability of reaching a stable release, applications towards sophisticated users have a larger probability of evolving in the development status. Interestingly, we find that the size of the community of developers increases the chances of progress but this effect decreases as the community gets larger, a signal of possible coordination problems. Finally, we show that the determinants of the development stage of older projects differ significantly from those of newer projects, thus supporting the common perception of open source as an extremely dynamic phenomenon. |
| JEL: | O38 L51 L63 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:pad:wpaper:0035&r=ppm |
| By: | Mita Marra |
| Abstract: | European cohesion policies are increasingly relying on grassroots networks tapping into tacit knowledge and participatory decision-making processes. Regional governments delegate their decision making power to local institutions with the assumption that local agents possess both contextual knowledge and political legitimacy to integrate different policy measures in a cooperative fashion. Delegation of decision making power is therefore presumed to minimize the unintended or conflicting outcomes emerging, for instance, when environmental protection and infrastructure building are not designed consistently to local contextual needs nor are these pursued through a cooperative effort of local networks of actors. Different agents, including resource users and government agencies try to work together to resolve shared dilemmas of coordination, as an increasingly common alternative to centralized institutions. Coordination consists of managing interdependencies among multiple individuals or organizations involved in the overall program or project management. Several studies classify different types of coordination mechanisms, including standards, hierarchy, targets or plans, slack resources, vertical information systems, direct contact, liaison roles, task forces, and integrating roles. Other ways of classifying coordination include formal impersonal, formal interpersonal, and informal interpersonal; non-coordination, standards, schedules and plans, mutual adjustment, and teams; task-task, task-resource, and resource-resource coordination; vertical and horizontal coordination; coordination by programming and by feedback; and coordination by standards, plans, and mutual adjustment. Building upon a current field research in four regions of the South of Italy, this paper examines how coordination occurs across local development programs, which are embedded within multilevel governance structures and relations. The paper presents a number of cases of local collaborations in which large numbers of local actors representing a wide range of contending groups have, with the help of mediating institutions, worked out agreements for integrating development programs. In some circumstances, specific coordination mechanisms encouraged consensus building offering all relevant groups the knowledge and skills needed to participate in these negotiations. In other circumstances, though, delegation of decision making power opened the door for opportunistic participation, lacking vision and trust for mutual cooperation. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa06p530&r=ppm |
| By: | Janneke Bemmel Van |
| Abstract: | Urban Renewal is carried out to renovate, demolish and rebuild houses in problematic urban areas. Urban renewal processes are complex; many actors are involved, the goals and strategies of these actors can change over time, and contextual factors (such as the housing market, residents’ wishes, the political direction) change constantly. This creates a lot of uncertainty in urban renewal processes; uncertainty about knowledge and values (substantive uncertainty), uncertainty about the intentions and strategies of the parties involved (strategic uncertainty), and uncertainty about when, where and by whom decisions are made (institutional uncertainty). With learning, this uncertainty can be made more manageable. The creation, sharing, use and evaluation of knowledge in urban renewal networks helps to respond to changes in, amongst others, residents’ wishes, the housing market, and technological developments. Learning can be defined as the creation of knowledge that is applicable in the activities of the parties involved. In urban renewal, four important steps towards learning can be recognised: the (collective) development of knowledge, the mutual sharing of knowledge, the use of the relevant knowledge available, and the evaluation of the knowledge gathered. A complex urban renewal project has been studied in the second largest Dutch city; Rotterdam, in the district ‘Hoogvliet’. This case study, that has an explorative character, exists of interviews with professionals working on urban renewal in Hoogvliet and observations during meetings at several levels of the cooperation network. Preliminary findings suggest that the development and sharing of knowledge in urban renewal in Hoogvliet takes place mainly through face-to-face contact, for instance during meetings and debates, and not so much in writing, for instance in databases or guidebooks. Another finding is that for collective learning to occur, a minimum of collective knowledge is needed; the parties involved must know the basics of the tasks and responsibilities of the other parties and of the knowledge built up earlier in the process. Furthermore, to increase the potential for learning, it seems smarter to sketch the outlines of complex long-term projects and concretize these along the way, then to make detailed plans far in advance. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa06p785&r=ppm |
| By: | Marijana Sumpor; Irena Dokic; Jaksa Puljiz |
| Abstract: | Generated as a response to the requirements in managing European cross border cooperation programmes, Neighbourhood Programme Slovenia-Hungary-Croatia 2004-2006 (NP) in particular served as an impetus for establishment of new modes of governance in Croatia. Together with Hungary and Slovenia, Croatia participates in this trilateral Programme as an external EU border candidate state. The NP is implemented as a grant scheme in Croatia for the first time requiring many institutional changes for its implementation. On all levels of government, the NP contributed to the establishment of stronger relations among institutions, horizontally and vertically, and a transfer of know-how in preparation and implementation from experienced partners, Slovenia and Hungary. Such a complex programme generated also problems due to weak administrative capacity, different sources of financing and socio-economic discrepancies. On national level, weak capacity of the Croatian Ministry of Foreign Affairs and European Integration (MFAEI) has directly influenced the initiation and implementation of NP and difficulties in the decision-making process occurred. The relationship between MFAEI and the Delegation of the European Commission was unclear and there were difficulties in developing new administrative procedures. Additionally, insufficiently transparent information dissemination mechanisms through different government levels influenced the quality and selection of project proposals in certain counties. Socio-cultural differences in Croatia were insufficiently considered while setting up the coordination system resulting in the extent and quality of submitted proposals and their success in the selection procedure. Some regions showed successful coordination on county level contributing to selection of greater number of proposals from those counties, while in others, there was a lack of capacity in preparing coherent project proposals. In accordance with the presented first Croatian experiences in the trilateral European cross-border programme, the following can be concluded: In terms of socio-developmental impacts, the joint-project proposal preparation process of the cross border partners created intensive inter-institutional cooperation and inter-institutional communication. However, only successful project proposals result in inter-institutional collaboration through joint implementation of projects, which is considered fundamental to the creation of a network society and building of social capital. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa06p386&r=ppm |
| By: | Yakup Egercioglu |
| Abstract: | The concept of property, since the beginning of its existence, has played a fundamental role in social life both in physical and moral aspects. That is the point where the issue becomes that much important. In Turkey especially for the last 40 years there has been a massive migration from the rural areas to the urban ones. In parallel with this rapid urbanization, it has been reported by the DIE (State Statistics Institution) that Turkey’s population increase rates are expected to decrease gradually and by the 2050’s the total population is expected to reach and stabilize as 100 million people. This projection of a stable population structure, government policies aligned with this projection, for example issues taken into the agenda like the renewal of the “gecekondu†areas within the next 10 years; these are all some certain clues for the forthcoming stabilization of the urban improvement and future significance of the concept “urban renewalâ€. For this reason the research will focus on the concept “property†which is an effective factor in the urban renewal projects. Property ownership is the most important parameter we face while working on urban renewal projects. Readjustment of property relations imposes certain responsibilities upon the planner. However within the planned period, Development Acts do not envisage an obligation for the planner regarding the matter of property during the preparation of development plans. Furthermore, legislation creates unequal states and makes it extremely hard to readjustment of the property relations and to implement development plans. Preparation process and implementation stage of the development plans are executed in the same manner traditionally. In brief, this proposal, assuming that the preparation and implementation processes of the plans will stay same, studies the effects of urban renewal projects on the property relations and makes suggestions. In brief, for the last 40 years there has been a development plan challenge in Turkey. Plans made without taking the social requirements and demands into consideration are continuously amended via revising localized development plans and results are strange even to the planner himself. Enacted construction pardons have increased the density on the urban areas and invalidated the prepared plans. In such an environment some immovable owners are rewarded while others are fined in a way. For that reason following measures shall be taken: •Concepts of permanent or temporary utilization right and habitation right shall be discussed with a new property definition perspective. Besides regulations must be issued concerning the prevention of land value increases through development plans. •Turkey’s development acts shall be revised and legislation creating unequal status regarding the property rights shall be abrogated. •A new development plan technique, urban design projects and semi public sphere concepts shall be adopted. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa06p34&r=ppm |
| By: | Daniela-Luminita Constantin |
| Abstract: | This paper represents a part of the author's contribution to the project "Housing rehabilitation in apartment block areas in Romania" developed under the auspices of the National Council for Higher Education Scientific Research. It addresses the relationship between housing policy and local development policy mainly from an institutional and legislative perspective, focusing on the actors involved in supporting housing and urban renewal actions in Romania. The role of local public administration is particularly envisaged, considering the authority of city councils with regard to rehabilitation of apartment block areas and, in a wider context, to urban regeneration. Several case studies on various Romanian cities will be presented in order to reveal not only current opportunities but also a series of drawbacks in this process. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa06p862&r=ppm |
| By: | Christa Hainz (Department of Economics, University of Munich, Akademiestr. 1/III, 80799 Munich. christa.hainz@lrz.uni-muenchen.de); Stefanie Kleimeier (Limburg Institute of Financial Economics, FdEWB, Maastricht University, P.O. Box 616, 6200 MD Maastricht, Netherlands. s.kleimeier@finance.unimaas.nl) |
| Abstract: | We develop a double moral hazard model that predicts that the use of project finance increases with both the political risk of the country in which the project is located and the influence of the lender over this political risk exposure. In contrast, the use of project finance should decrease as the economic health and corporate governance provisions of the borrower’s home country improve. When we test these predictions with a global sample of syndicated loans to borrowers in 139 countries, we find overall support for our model and provide evidence that multilateral development banks act as “political umbrellas”. |
| Keywords: | project finance, syndicated loans, political risk, double moral hazard |
| JEL: | D82 F34 G21 G32 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:183&r=ppm |
| By: | Elena Carletti; Vittoria Cerasi; Sonja Daltung |
| Abstract: | This paper analyzes the optimality of multiple-bank lending, when firms and banks are subject to moral hazard and monitoring is essential. Multiple-bank lending leads to higher per-project monitoring whenever the benefit of greater diversification dominates the costs of free-riding and duplication of effort. The model predicts a greater use of multiple-bank lending when banks are highly leveraged, firms are less profitable and monitoring costs are high. These results are consistent with some empirical observations concerning the use of multiple-bank lending in small and medium business lending. |
| Keywords: | multiple monitors, diversification, free-riding problem, multiple-bank lending. |
| JEL: | D82 G21 G32 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:mis:wpaper:20061103&r=ppm |
| By: | Stijn Reinhard; Aris Gaaff |
| Abstract: | Increasing pressure on space demands careful assessment between competing functions in a planning process. Especially, in metropolitan landscapes, space is in short supply and hence expensive. Housing, industrial sites and office parks, and infrastructure are strong drivers of landscape change, often dominating nature and landscape which represent values with a more collective good character. Nevertheless, in The Netherlands, nature is becoming an important force in spatial planning. This assessment between competing functions, requires interactive planning and appropriate instruments. In the usual planning process, the costs and benefits of the development plans to society are only computed in the final stage of the process. We argue in this paper for integration of a social cost-benefit analysis (SCBA) in interactive regional planning processes. Firstly, it avoids time and money being spent on elaborating a plan, which is not beneficial to society. Secondly, it helps to prevent unwarranted enthusiasm for inauspicious plans among participants. From earlier studies, we learned that in the application of SCBA the discussion between researchers, clients and other participants should focus on two or three clearly distinctive models. Too much detail should be avoided. On the other hand, key indicators used in calculating effects have to be available and well documented. The summation of the costs and benefits provides a first impression of the financial and social feasibility of the plan. In a first planning session, therefore, a common understanding of the mechanisms underlying the assessment of the plan will be built up. This improves the support for SCBA of the final project. It also provides the stakeholders and shareholders with information about the feasibility of the plan at an early stage. Another advantage is that SCBA focuses on the benefits to society as a whole. Recently, we have spent much effort in the development of an interactive tool that is both relevant and user friendly. Relevant means that it takes into account the essential values of different types of land use and their interaction. At the moment we focus on spatial interaction and incorporating ecological network values. A prototype of the interactive integrated model is available for demonstration. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa06p402&r=ppm |
| By: | Carolin Häussler (Institute for Innovation Research, Technology Management, and Entrepreneurship, Ludwig-Maximilian University of Munich, Kaulbachstr. 45, 80539 Munich, Germany. haeussler@bwl.uni-muenchen.de) |
| Abstract: | The efficient allocation of control rights in inter-firm collaborations is a widely emphasized issue. In this paper, I empirically identify control rights and the allocation of these rights using a unique survey data set on collaborations between biotechnology and pharmaceutical firms. Fifteen control rights are identified to make up the structure of deals with five rights being the items of contention in deal mak-ing (ownership of patents, production, further development of the technology, the right to manage the collaboration, and the right to market universally). I find that the assignment of control rights is re-lated to the bargaining position of firms and incentive issues. Hence, goliaths –pharmaceutical incum-bents – subrogate critical rights to the new ventures when the final outcome of the project is depending on the venture’s effort. |
| Keywords: | contracts, performance, inter-firm collaboration, biotechnology |
| JEL: | D23 L24 G30 M13 O32 |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:189&r=ppm |