KDI - Korea Development Institute - RESEARCH - Research Areas - Public and Private Infrastructure Investment

Summary

Other Research Realizing the Potential of Public-Private Partnerships to Advance Asia's Infrastructure Development

This book is an outcome of the collaboration between the Economic Research and Regional Cooperation Department (ERCD) of the Asian Development Bank (ADB) and the Korea Development Institute (KDI) under ADB’s regional technical assistance research project—Asian Development Outlook (ADO) 2016–2018. The project supports the production of the ADO, one of ADB’s flagship knowledge products. This book was born out of the theme chapter—Sustaining Development through Public–Private Partnership—of the Asian Development Outlook 2017 Update. The chapter, coauthored by members of ADB and KDI and Akash Deep, senior lecturer in public policy at the Harvard Kennedy School, examined the state of public–private partnerships (PPP) in developing Asia, and how these partnerships can contribute to economic growth and poverty reduction. It also discussed how PPPs can be used to meet developing Asia’s infrastructure needs and contribute to sustainable development. This book contains the background papers that were used in the preparation of the theme chapter. All the papers have been updated and expanded for this book.

- Despite the rapid economic progress, Asian countries are still troubled by deficits in the infrastructure for electricity, transportation, water supply, sanitation, etc., increasing the demand for PPPs which efficiently utilizes private capital and expertise.

○ Developing infrastructure serves as a key factor not only in a region’s economic development but also in urbanization and building a stronger value chains.

- The report focuses on the prospect of PPP-driven infrastructure development in Asian countries and the risks challenging them. There are also insights into Korea’s advanced PPP system and its experiences and lessons and the importance of efficient financing mechanisms.

○ Chapter 1 evaluates the benefits and risks of PPP projects.

○ Chapter 2 analyzes factors affecting the financing for PPPs and suggests methods for syndicated loans and risk mitigation.

○ Chapter 3 details Korea’s experiences with PPPs and the implications, and compares the current condition and system of Korea, the Philippines and Indonesia as a way to explore the future direction for successful PPPs in Asian countries.

Summary

Research Monograph KOR Public Investment for Enhancing Productivity

Despite the longstanding debate over the relationship between public investment and economic growth, opinions with regards to the path and impact remain extremely opposed. There is also a lack of research on the role and management of public investment in enhancing growth and productivity under the current economic climate. Indeed, although recent studies have found that efficient public investment affects long-term economic growth through improved productivity and that strengthening the efficient management of public investment is an important link between public investment and economic growth, those that address the role of public investment in economic growth and productivity remain scarce. Accordingly, this study aims to explore the role of and tasks for public investment in reinforcing productivity within the Korean economy. The relationship between public investment and economic growth and productivity will be empirically and theoretically analyzed and policy implications will be presented for the role of public investment.

Summary

Research Monograph KOR Valuing Public Goods Using the Life Satisfaction Approach

This study deals with two distinctive subjects in economic valuation. First, it attempts to better understand previous results and to inspect problems due to the false applications of the contingent valuation method (CVM), the most vastly used methodology in the field, by means of empirical reviews. Second, it conducts the ex ante evaluation of public goods using the life satisfaction approach (LSA) as the main objective of this study.

For the first task, it conducts three meta-anlayses using the survey results as well as estimation results that applied CVM. First, it attempts to identify the factors affecting the willingness to pay (WTP) estimated by CVM. Second, it examines the changes in WTP estimates by the choice of estimation models. Meanwhile, it compares the results from the structural model based on economic theory with those from non-structural one. Third, it attempts to derive quantitatively the changes in total value or total benefit due to the ways of aggregating WTPs estimated by CVM. The second and third meta-analyses are designed to emphasize the biases from incorrect applications of CVM.

Next, it conducts the empirical analysis using LSA. Apart from the convention of valuing environmental goods including air pollution, noise, scenery and so on that previous literature followed, this study attempts to value public goods in the ex ante sense. To make the comparisons possible, the target goods are selected two arboretums that have already been valued using CVM.

The results from the meta-analyses show the possibility of starting point bias and compliance bias in WTPs estimated by CVM. Also, it elicits the potential overestimation of WTPs and shortfalls of incorrect aggregation of WTPs estimated by CVM. Finally, the application of LSA reveals the results very close to what the previous research have suggested in terms of the influence of explanatory variables to life satisfaction responses, and it obtains comparable results to those by CVM in valuing arboretums.

Summary

Policy Study KOR A Study on the Treatment of Protest Zero Bids in Dichotomous Contingent Valuation Models

This study analyzes ways to identify protest zero-bids (PR zero-bids) in the contingent valuation method (CVM) and to effectively deal with PR zero-bids. In order to distinguish PR zero-bids from true zero bids (non-PR zero-bids), this study adopts the concept of the implicit willingness to pay employing the Hicksian compensating surplus and the Taylor's 1st order approximation. When a respondent proposes zero WTP and chooses a PR filtering item to indicate that his/her implicit WTP is not necessary zero, his/her response is identified as a PR zero-bid. PR filtering items falling into the PR zero-bids category include the uncertainty of information, distrust in the government and project achievement, disagreement to project plans, discontent with the fairness of public works and their payment method and animosity against the CVM itself.

The empirical analysis shows that PR zero-bids take place systematically in particular respondent groups; respondents who have never used similar facilities before nor plans to use the facility provided by the public project, the employed, and low income groups.

According to estimation outcomes using CVM data at KDI, the correlation coefficient of the estimated errors associated with PR zero-bids and WTP estimates is 0.9696, which means that the presence of sample selection bias is statistically verified. Also, the analysis finds that there is a gap of about 940 won per household between the estimated WTP excluding PR zero-bids without any adjustment and the estimated WTP with consideration of sample selection bias. Such gap can be significant in altering the decision in regard to economic feasibility of concerned project.

In conclusion, the study suggests that a CVM questionnaire needs to be designed carefully to minimize problems associated with PR zero- bids and the potential risks of having sample selection bias should be concerned. In empirical estimation, it is possible to exclude PR zero- bids when characteristics of a sub-sample excluding PR zero-bidders are identical to those of entire sample including PR zero-bidders. Otherwise, it is necessary to take additional steps to deal with sample selection bias in estimating WTP. In this study, the single-bounded dichotomous choice model is suggested as a possibility.

Summary

Other Research KOR A Study on Guidelines for Travel Demand Forecast

Part 1. Basic Directions for the Guidelines

I. Overview of the Study

　 1. Background and Purpose
　 2. Scope
　 3. Methodology

II. Current Status and Problems of Existing Travel Demand Analysis for PPP Projects

　 1. Examples of Travel Demand Guidelines
　 2. Problems of Existing Analysis of PPP Projects
　 3. Study of Korea Transportation Database (KTDB)

III. Basic Directions for Travel Demand Forecast Guidelines

　 1. General Process of Travel Demand Forecasting
　 2. Basic Direction for Step-by-Step Guide to Travel Demand Forecast

IV. Conclusions and Policy Suggestions

　 1. Conclusions
　 2. Policy Suggestions

Part 2. Guidelines for Travel Demand Forecast

V. Traffic Survey and Analysis

　 1. Overview of Traffic Survey
　 2. Road Traffic Survey
　 3. Intersection Traffic Survey
　 4. Traffic Facilities Survey
　 5. Speed and Delay Survey
　 6. Traffic Behaviour and Preference Survey

VI. Review of Preceding and Related Plans

　 1. Overview
　 2. Conformity with Preceding Plans
　3. Review of Transportation Facilities Plans
　 4. Review of Housing Development and Industrial Complex Development Plans

VII. Current Status and Forecast for Social·Economic Indicators

　 1. Overview
　 2. Data Collection for Social·Economic Indicators
　 3. Incorporating Housing and Industrial Complex Development Plans
　 4. Forecast of Social·Economic Indicators

VIII. Origin/Destination (O/D) Data and Network Establishment

　 1. O/D and Network
　 2. Calibration and Validation

IX. Travel Demand Forecasting

　 1. Overview of Travel Demand Forecasting
　 2. Traffic Generation
　 3. Traffic Distribution
　 4. Mode Choice
　 5. Traffic Assignment
　 6. Documents for Submission

X. Toll-based Travel Demand Forecast

　 1. Overview of Toll-based Travel Demand Forecast
　 2. Review of Method for Toll Charge
　 3. Toll Determination
　 4. Demand Forecast according to the Level of Toll
　 5. Analysis of Toll Elasticity
　 6. Toll Appropriateness Review
　 7. Analysis of Travel Demand when Toll is Charged

Summary

Other Research Performance Evaluation System and Guidelines with Application to Large-scale Construction, R&D, and Job Training Inverstments : World Bank and KDI Conference Proceedings

CHAPTER 1 Introduction (Jay-Hyung Kim)
　1-1 Background
　1-2 Objective
　　A Infrastructure investment evaluation
　　B R&D policy/program evaluation
　　C Job training program evaluation

Part I Performance Evaluation and Management System

CHAPTER 2 Destination ROME: Road Less Traveled by Development Practitioners (Anwar Shah)

　2-1 Introduction
　　A Why the public sector does not deliver much in developing countries?
　　B On getting the giant to kneel : approaches to a change in the bureaucratic culture
　　C Experiences with Rome
　　D Beyond ROME - Measuring performance when there is no bottom line
　　E Epilogue - Rome - a road map to wrecks and ruins or to a better tomorrow?

CHAPTER 3 Designing and Building a Performance-Based Monitoring and Evaluation System: Structures and Strategies (Ray C Rist)

　3-1 Introduction
　　A Why Build a performance-based M&E system
　　B If performance information is the key, then where does it come from?
　　C The ten steps to building a performance based M&E system
　　D Developing countries have notable challenges
　　E Building the M&E System : Seven matters for consideration
　　F Postscript
　　G Endnotes

CHAPTER 4 Two Generation of Performance Evaluation and Management System in Australia (Keith Mackay)

　4-1 First generation : 1987 to 1997
　　A The priority for public sector reform
　　B The government's evaluation strategy
　　C How successful was the evaluation strategy?
　4-2 Second generation: 1997 present
　　A How successful have the second generation reforms been?
　4-3 Comparison of first and second generation reforms
　4-4 Some implications for Korea

CHAPTER 5 Performance Evaluation and Management System in Korea (Jay-Hyung Kim)

　5-1 Introduction
　5-2 Two initiatives after the economic crisis through 2002
　　A Performance-based budgeting
　　B Inspection of implementation completion
　　C Lessons Learned
　5-3 Challenge of new government in 2003
　　A Basic concept: performance management system(PMS)
　　B Details of PMS execution
　　C Organizations and management of PMS advisory group
　　D Utilization of PMS results
　　E Current year tasks
　5-4 PMS and performance evaluation
　　A Basic strategies of evaluation
　　B Types of evaluation reports
　　C Personnel training and networking for evaluation
　5-5 Basic guidelines for performance evaluation
　　A ICR reporting
　　B PER reporting
　　C Application to each sector

Part II Evaluation Application to Large-scale Construction Investment

CHAPTER 6 Moving from Measuring Processes to Outcomes: Lessons Learned from GPRA in the United States (Vijaya Vinita ChannahSorah)

　6-1 Background of the government performance and results act(GPRA)
　6-2 Historical change of focus in implementation of GPRA
　6-3 Methodologies and guidelines for program evaluation
　6-4 Conclusions

CHAPTER 7 Performance Evaluation System and Guidelines for Infrastructure Investment in Korea (Hyeon Park)

　7-1 Introduction
　7-2 The importance of performance evaluation for infrastructure investment
　7-3 Experience
　　A Korea
　　B OECD countries
　7-4 Performance evaluation system and guidelines in Korea
　　A Evaluation System
　　B Strategies
　　C Ownership
　　D Scope
　　E Level
　　F Timing
　　G Performance measures
　7-5 Concluding remarks

Part III Evaluation Application to R&D Investment

CHAPTER 8 Evaluation of R&D Lessons from OECD Countries (Jean-Eric Aubert)

CHAPTER 9 Performance Evaluation System and Guidelines for R&D Investment in Korea (Joonghae Suh)

　9-1 Introduction
　9-2 Framework of R&D performance evaluation
　　A Korea
　　B Designing and practicing evaluation
　9-3 International practices
　　A Overview
　　B Survey on research evaluation system in some OECD
　9-4 The current status of Korea's R&D evaluation system
　9-5 Designing R&D performance evaluation system in Korea
　　A The Korean context
　　B A framework of R&D performance evaluation in Korea
　　C Guidelines for performance evaluation
　　D Tasks ahead
　9-6 Concluding remarks

Part IV Evaluation Application to Job Training Investment

CHAPTER 10 Evaluation Training Programs : A Primer and Global Examples (Hong W Tan)

　10-1 Introduction
　10-2 Impact evaluation approaches
　　A Experimental Evaluation Techniques
　　B Quasi-Experimental Techniques
　10-3 Some evaluation design principles
　10-4 Estimating program impacts
　10-5 Selected global examples

CHAPTER 11 Performance Evaluation System and Guidelines for Job Training Investment in Korea (Kyungsoo Choi)

　11-1 Introduction
　11-2 Public job training programs and the challenges
　　A The current public job training programs in Korea
　　B The challenges for public job training programs in Korea
　11-3 Performance evaluation system for job training programs in Korea
　　A Current Evaluation System in Korea
　　B Assessment

Summary

Other Research Developing a Performance Evaluation System in Korea

* This content is starting part of Introduction section of this book.

After the 1997 Financial Crisis in Korea, the Korean government has been trying to reform the public sector and enhance the overall efficiency of public finance. The Ministry of Planning and Budget (MPB) has specifically focused not only on control of the input but also on the outcome of expenditure, as well setting a new goal for budget management. The MPB has adopted a series of integrated (ex-ante, intermediate, and ex-post) quality control efforts for public expenditure management during the past several years.

On ex-ante level, the MPB has been carrying out preliminary feasibility studies to raise efficiency in the decision-making process of major public investment projects since 1999. In order to mandate as well as conduct research and operational management in implementing preliminary feasibility studies, the MPB established the Public Investment Management Center (PIMA) at the Korea Development Institute (KDI), and has thus far carried out preliminary feasibility studies of one hundred and twenty projects with PIMA. PIMA organizes a separate team for each project where related experts of scholars, private research organizations and other government think tanks take part to evaluate major issues. Based on results of their preliminary feasibility studies, the MPB ruled to withhold or temporarily stop 66 projects out of 120 projects that were studied during the period of 1999-2002, while all projects except one during the previous 20 years prior to introduction of the preliminary feasibility study system, had received approval on their feasibility. The change in the study results proves that preliminary feasibility studies are markedly different compared to the past practice of superficial studies that only served as a cover for justifying selected projects.

However, the introduction of an ex-post evaluation system is still at its early stage in Korea. Although the government has been developing new architectures/frameworks of ex-post evaluation system such as performance-based budgeting and inspection of implementation completion, there are several areas where more effective and efficient evaluation of public projects and/or programs can be implemented. In response to the need to improve the effectiveness and efficiency of projects and/or programs by evaluating their goals and achievements, this is a timely opportunity to introduce a more systematic and integrated performance evaluation system in Korea. This particular volume, "Developing a Performance Evaluation System in Korea," is aimed at providing directions and strategies for the introduction of performance evaluation system in Korea, with an opportunity to share experiences and methodologies of the World Bank and OECD member countries. The volume is initiated for the purpose of compiling the status of the system in advanced countries and institutions, and examining major items of improvements needed for realistic introduction of the ex-post evaluation system. Although different evaluation methodologies could be applied for budget projects of different countries depending on the nature of projects, the volume focuses on presenting an evaluation methodology that can be applied in the most general way.

The volume comprises of the papers presented at the international workshop with the World Bank and OECD "Developing a Performance Evaluation System in Korea" (September 17-18, 2002), sponsored by the Korea Development Institute. The workshop was held at the KDI Conference Hall in Seoul.

Summary

Other Research KOR A Study on Introducing Ex-Post Program Evaluation and Evaluation Methodology

Ⅰ. Introduction

Ⅱ. Concept of Program Evaluation

　1. Definition and Objective
　2. Focus of Evaluation
　3. Type of Evaluation
　4. Limitations

Ⅲ. Program Evaluation System in Foreign Countries

　1. United States
　2. Canada
　3. Australia
　4. Japan
　5. World Bank
　6. Implications to Korea

Ⅳ. Introducing Program Evaluation System

　1. Constraints and Solutions
　2. Introducing Program Evaluation System

Ⅴ. Program Evaluation Methodology: Preparing Implementation Completion Report (ICR)

　1. Overview and Purpose
　2. Evaluation Criteria
　3. Operation of Pilot Study
　4. Preparing ICR for Pilot Study

Summary

Other Research KOR A Study on Environmental Cost Estimation in Pre-feasibility Study of Transportation Projects

Ⅰ. Background and Purpose of the Study

　1. Environmental Impact Evaluation in Pre-feasibility Study
　2. Need for Environmental Impact Evaluation in Feasibility Study
　3. Background and Purpose
　4. Scope
　5. Methodology and Direction

Ⅱ. Environmental Impact of Public Investment Projects

Ⅲ. A Study on Means to Introduce Environmental Impact Evaluation

　1. Feasibility Study and Environmental Impact Evaluation
　2. Environmental Impact Evaluation in Developed Countries
　3. Environmental Impact Evaluation in Korea
　4. Environmental Impact Evaluation Method in Pre-feasibility Study

Ⅳ. A Study on Environmental Impact Evaluation Technique

　1. Overview of Evaluation Technique
　2. Study on Environmental Impact Evaluation Technique
　3. Selection of Environmental Impact Evaluation Technique for Pre-feasibility Study

Ⅴ. Comparison of Environmental Cost Estimation Methodologies

　1. Review of Environmental Impact Valuation Methodologies
　2. Analysis of Prior Studies on Estimating Environmental Cost in Transportation Sector
　3. Review of Value Estimation Methodology for Pre-feasibility Study

Ⅵ. Estimation of Environmental Cost

　1. Estimation of Air Pollution Cost Benefit
　2. Estimation of Noise Cost Benefit
　3. Estimation of Forest Exploitation Cost
　4. Application of Environmental Cost Estimation Results

Ⅶ. Evaluation Methods of Non-Quantitative Environmental Impact

　1. Need for Non-Quantitative Environmental Impact Assessment
　2. Preliminary Environmental Review and Environmental Impact Assessment
　3. Study on Methods for Non-Quantitative Environmental Impact Assessment in Pre-feasibility Study
　4. Summary and Conclusion

Ⅷ. Conclusion

　1. Summary of Results
　2. Future Challenges

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