This paper offers an assessment of the methodologies employed to estimate the economic opportunity cost of capital for public sector projects, relying on the Mexican case for an applied empirical exercise.
... See More + The traditional weighted cost of capital (top-down) approach used in the estimation of Mexico's economic opportunity cost of capital is reviewed and compared to the supply price (bottom-up) approach. With respect to previous studies using the top-down approach, this paper explores the contribution of domestic savings and expands the analysis to include a more detailed examination of the available macroeconomic, labor, financial, and tax information. The re-estimated top-down economic opportunity cost of capital for Mexico comes to 10.4 percent. To confirm these results and provide additional insights regarding the alternative bottom-up approach, the economic opportunity cost of capital is estimated using the supply price plus externalities method. For the case of Mexico, this paper recommends using a combination of estimation models (both the top-down and bottom-up approaches) to check the consistency of results and re-estimating the economic opportunity cost of capital every five years to accommodate for macroeconomic and fiscal changes. More broadly, the paper acknowledges the complexities involved in the estimation of the economic opportunity cost of capital for public investment projects and underlines the relevance of additional considerations, such as changes in global economic trends and country risk ratings, tax distortions, financial sector improvements, the impact of reforms, and data availability.
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Policy Research Working Paper WPS6816 MAR 01, 2014
The Romanian Ministry of Regional Development and Tourism (MRDT) (now the Ministry of Regional Development and Public Administration - MRDPA) has signed an agreement with the World Bank for five technical assistance projects.
... See More + The aim of this technical assistance program is to determine how cities in Romania can become more competitive, sustainable, and inclusive, and to help the MRDPA develop its administrative capacity to better manage policy and investment work. This report focuses on the identification of optimal selection models, which is critical for improving the efficiency and impact of the regional operational program (ROP) during the 2014-2020 budgeting period. More specifically, the current technical assistance seeks to support the managing authority (MA) of the ROP, part of the MRDPA, with the identification and recommendation of improved, innovative selection models for the ROP. This report provides an assessment of the ROP's current selection models, reviewing strong points and areas for improvement. The scope of this work covers primarily the evaluation and selection stages in a project cycle, although broader implications exist in terms of project generation, implementation, and post implementation. This report focuses on three key tasks: assessment of the status quo, comparison with other European Union (EU) member states, and recommendations for the ROP's improvement.
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The Romanian Ministry of Regional Development and Tourism (MRDT) (now the Ministry of Regional Development and Public Administration - MRDPA) has signed an agreement with the World Bank for five technical assistance projects.
... See More + The aim of this technical assistance program is to determine how cities in Romania can become more competitive, sustainable, and inclusive, and to help the MRDPA develop its administrative capacity to better manage policy and investment work. This report focuses on the identification of optimal selection models, which is critical for improving the efficiency and impact of the regional operational program (ROP) during the 2014-2020 budgeting period. More specifically, the current technical assistance seeks to support the managing authority (MA) of the ROP, part of the MRDPA, with the identification and recommendation of improved, innovative selection models for the ROP. This report provides an assessment of the ROP's current selection models, reviewing strong points and areas for improvement. The scope of this work covers primarily the evaluation and selection stages in a project cycle, although broader implications exist in terms of project generation, implementation, and post implementation. This report focuses on three key tasks: assessment of the status quo, comparison with other European Union (EU) member states, and recommendations for the ROP's improvement.
See Less -
The Romanian Ministry of Regional Development and Tourism (MRDT) (now the Ministry of Regional Development and Public Administration - MRDPA) has signed an agreement with the World Bank for five technical assistance projects.
... See More + The aim of this technical assistance program is to determine how cities in Romania can become more competitive, sustainable, and inclusive, and to help the MRDPA develop its administrative capacity to better manage policy and investment work. This report focuses on the identification of optimal selection models, which is critical for improving the efficiency and impact of the regional operational program (ROP) during the 2014-2020 budgeting period. More specifically, the current technical assistance seeks to support the managing authority (MA) of the ROP, part of the MRDPA, with the identification and recommendation of improved, innovative selection models for the ROP. This report provides an assessment of the ROP's current selection models, reviewing strong points and areas for improvement. The scope of this work covers primarily the evaluation and selection stages in a project cycle, although broader implications exist in terms of project generation, implementation, and post implementation. This report focuses on three key tasks: assessment of the status quo, comparison with other European Union (EU) member states, and recommendations for the ROP's improvement.
See Less -
The Romanian Ministry of Regional Development and Tourism (MRDT) (now the Ministry of Regional Development and Public Administration - MRDPA) has signed an agreement with the World Bank for five technical assistance projects.
... See More + The aim of this technical assistance program is to determine how cities in Romania can become more competitive, sustainable, and inclusive, and to help the MRDPA develop its administrative capacity to better manage policy and investment work. This report focuses on the identification of optimal selection models, which is critical for improving the efficiency and impact of the regional operational program (ROP) during the 2014-2020 budgeting period. More specifically, the current technical assistance seeks to support the managing authority (MA) of the ROP, part of the MRDPA, with the identification and recommendation of improved, innovative selection models for the ROP. This report provides an assessment of the ROP's current selection models, reviewing strong points and areas for improvement. The scope of this work covers primarily the evaluation and selection stages in a project cycle, although broader implications exist in terms of project generation, implementation, and post implementation. This report focuses on three key tasks: assessment of the status quo, comparison with other European Union (EU) member states, and recommendations for the ROP's improvement.
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