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on Project, Program and Portfolio Management |
| By: | Michela Cella (University of Milan-Bicocca); Massimo Florio (University of Milan) |
| Abstract: | This paper presents a simple principal-supervisor-agent model of the investment game between a supranational player (the principal), such as the European Commission, a regional government (the supervisor), and a private firm (the executing agency) . The EC is a benevolent social welfare maximiser, the regional government has an objective function that combines private benefits to politicians and the welfare of their constituency, the agent is a utility maximiser. The latter can be of a high or low efficiency type, and the operative cost, observable ex post, depends upon this binary technology and managerial effort, also unobservable. The EC offers a matching capital grant to the firm (as it does with the EU Structural Funds), intended to cover part of the investment cost of an otherwise unprofitable project. The regional government offers the remaining share of the subsidy. If the firm claims to be inefficient, the EC can send with some probability an ex-post evaluator and there is a penalty if she discovers that it is of the efficient-type. Moreover the regional government can collaborate with the EC to disclose additional information it may have on the firm, but it needs to be given a reward not to collude with the firm, that is in turn willing to offer a private benefit to the regional government to conceal unfavourable evidence. We show that the role of these providers of additional information is essential to reducing the value of the grant and in improving the inefficiencies caused by asymmetric information and the grant decision stage. The paper suggests that the EC should include ex-post evaluation, currently provided by the Structural Funds regulations, within regional planning contracts for infrastructure investment; and that regional governments should be offered a reward for disclosing additional information on the firm technology (ex-ante supervision). |
| Keywords: | Hierachical contracting, evaluation, EU Structural Funds, |
| Date: | 2007–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:bep:unimip:1059&r=ppm |
| By: | Arup Daripa (School of Economics, Mathematics & Statistics, Birkbeck) |
| Abstract: | We study alternative mechanisms facing adverse selection and moral hazard, as well as the problems of collusion and free-riding, which are often ignored in the literature. We derive the optimal monitoring mechanism and show that it solves free riding and collusion problems. However, with different types of agents, the optimal mechanism needs to also solve an “assignment problem,” which, coupled with the need to generate incentive for monitoring, prevents the optimal monitoring mechanism from attaining full second best efficiency. The paper then considers an alternative mechanism in which some agents are simply given gatekeeping powers: they can either allow or block any investment project. The mechanism allows rent extraction through side payments from investors to the gatekeepers. A gatekeeping mechanism with competing gatekeepers attains first best efficiency, and is also proof against collusion between investors and gatekeepers by construction. We show that the crucial issue for the success of monitoring is whether monitors can be penalized for false reporting. Without this assumption monitoring reduces to gatekeeping. Further, the crucial assumption for gatekeeping to succeed is that gatekeepers behave in a competitive manner. The results provide an explanation for the observed institutional choices: monitoring is typical in informal collectives, whereas government regulation of investment (licensing, issuing permits etc) leads naturally to gatekeeping. |
| Keywords: | Monitoring; Gatekeeping; Informal credit collective; Licensing; Collusion; Free riding in monitoring; Corruption |
| JEL: | O12 D82 D78 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:bbk:bbkefp:0715&r=ppm |
| By: | Rodrigo Moreno-Serra |
| Abstract: | The general aim of this paper is to review how matching methods try to solve the evaluation problem – with a particular focus on propensity score matching – and their usefulness for the particular case of health programme evaluation. The “classical” case of matching estimation with a single discrete treatment is presented as a basis for discussing recent developments concerning the application of matching methods for jointly evaluating the impact of multiple treatments and for evaluating the impact of a continuous treatment. For each case, I review the treatment effects parameters of interest, the required identification assumptions, the definition of the main matching estimators and their main theoretical properties and practical features. The relevance of the “classical” matching estimators and of their extensions for the multiple and continuous treatments settings is illustrated using the example of a health programme implemented with different levels of population coverage in different geographic areas. |
| Keywords: | Evaluation methods, treatment effects, matching, propensity score, programme evaluation. |
| JEL: | C14 C21 C33 I10 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:07/02&r=ppm |
| By: | Jing Gao (Département des sciences administratives, Université du Québec (Outaouais)) |
| Abstract: | The Agricultural Development Bank of China (ADBC) seeks a complete economic evaluation of the Loaning Funds Program to support private agricultural product processing factories. This paper aims at economically evaluate one loaning project of ADBC : the soybean processing of Huabao Industrial Co. Ltd. |
| Keywords: | Project management, Cost-benefit analysis |
| JEL: | M |
| Date: | 2007–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:pqs:wpaper:042007&r=ppm |