“…First, we ignored all possible types of transaction costs. Such costs may reduce the incentives for agents to participate (Anthon et al, 2007a). There are also likely to be costs associated with obtaining information on agents' opportunity costs.…”
Section: Discussionmentioning
confidence: 99%
“…If payments are funded by public funds, transfers may involve some fractional costs due to distortion(Anthon et al, 2007a), but we ignore these here.…”
JEL classification: Q23 H23 Q54 Q56
Keywords:Asymmetric information Brazil Deforestation Opportunity costs Payments for environmental services REDD a b s t r a c t Improving information about individual opportunity costs of deforestation agents has the potential to increase the efficiency of REDD when it takes the form of a payment for environmental services scheme. However, objectives pursued in REDD projects may vary across policy makers. Within a theoretical framework, this paper explores the impacts of different policy objectives under two opportunity cost settings: asymmetric and full information. For a policy maker aiming to maximize net income from REDD, having full information may not increase the amount of forest conserved but could lead to a redistribution of rents away from agents. By contrast, for an environmental policy maker focused on maximizing the amount of forest conserved under REDD having full information increases the amount of forest conserved while reducing the rents received by agents. For a policy maker pursuing poverty alleviation objectives in REDD-affected communities, having full information makes no difference to overall welfare as rents remain with agents. The amount of deforestation avoided will at least be as high as under P. Delacote et al. / Resource and Energy Economics 36 (2014) 508-527 509 asymmetric information. These results are illustrated with data collected on opportunity costs in Amazonas State, Brazil.
“…First, we ignored all possible types of transaction costs. Such costs may reduce the incentives for agents to participate (Anthon et al, 2007a). There are also likely to be costs associated with obtaining information on agents' opportunity costs.…”
Section: Discussionmentioning
confidence: 99%
“…If payments are funded by public funds, transfers may involve some fractional costs due to distortion(Anthon et al, 2007a), but we ignore these here.…”
JEL classification: Q23 H23 Q54 Q56
Keywords:Asymmetric information Brazil Deforestation Opportunity costs Payments for environmental services REDD a b s t r a c t Improving information about individual opportunity costs of deforestation agents has the potential to increase the efficiency of REDD when it takes the form of a payment for environmental services scheme. However, objectives pursued in REDD projects may vary across policy makers. Within a theoretical framework, this paper explores the impacts of different policy objectives under two opportunity cost settings: asymmetric and full information. For a policy maker aiming to maximize net income from REDD, having full information may not increase the amount of forest conserved but could lead to a redistribution of rents away from agents. By contrast, for an environmental policy maker focused on maximizing the amount of forest conserved under REDD having full information increases the amount of forest conserved while reducing the rents received by agents. For a policy maker pursuing poverty alleviation objectives in REDD-affected communities, having full information makes no difference to overall welfare as rents remain with agents. The amount of deforestation avoided will at least be as high as under P. Delacote et al. / Resource and Energy Economics 36 (2014) 508-527 509 asymmetric information. These results are illustrated with data collected on opportunity costs in Amazonas State, Brazil.
“…The analysis focuses on the information asymmetry about firms' true costs, which is aimed to be solved through competitive bidding. This setup is different from some of the existing literature analyzing the principal-agent problem in the procurement context (Anthon, Bogetoft, and Thorsen 2007)…”
Infrastructure is essential for economic growth, and public procurement is an important instrument to use limited resources effectively. Among public procurers there remains a strong view that quality should not be compromised, particularly in high-value transactions, such as infrastructure projects. The common practice excludes incompetent applicants from the selection process. An alternative view is that infrastructure procurement can stimulate the economy by loosing qualification standards. The article examines this trade-off between price and quality. Using procurement data from electricity projects in developing countries, it shows that the adoption of substantive quality qualification increases bid prices for technical reasons and deters the bidder entry, which would raise procurement costs further. The auctioneer’s decision to adopt the quality qualification procedure is also found exogenous, meaning that auctioneers would not compromise the quality of projects regardless of the level of competition. This is an important measure to ensure the quality of complex infrastructure works.
“…Spending public monies requires compliance with a wide spectrum of rules, procedures and regulations topped with best practices and enveloped with multiple layers of constraints established in laws, codes or professional and ethical standards. A public procurer targets, ideally, to maximize "net social benefits" wearing the shoes of a "benevolent social planner" (Anthon, Bogetoft, & Thorsen, 2007, p. 1626. Unfortunately, this has rarely been the case.…”
Taints of corruption in public procurement (PP) exist in both developed and developing countries alike- though in different scales and with different characteristics and impacts. Attempts to achieve a taint-free procurement regulation have failed even in the most robust and mature jurisdictions due to an inherent complexity and difficulty given the paradigms used. PP systems today remain fragile to various shocks2 coming mainly from markets and corruption. This paper proposes a paradigm shift in the way in which a PP System (PPS) should be designed and practiced rendering it as “antifragile”3 as possible to benefit from shocks, stresses and disorder. Antifragile PPS design revolutionizes not only the regulations but also the frameworks and institutional setups and the whole practice of the public procurement profession in a manner that permits growth and evolution at times of stress or distress. This paradigm shift is based on a design of the PPS as a complex system.
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