YIELD AND RISK - THE BASIC COORDINATES OF SOCIO-ECONOMIC DEVELOPMENT PROGRAMS
Journal Title: Challenges of the knowledge society ( Provocari ale societatii cunoasterii ) - Year 2018, Vol 10, Issue 12
Abstract
Public policies are implemented through larger and smaller public programs and projects that have to comply with very strict governance conditions. Evaluating the net benefits generated by public programs or projects allows for the identification of the cost-effective ones in order to select them. For this purpose, a lot of indicators, mainly the Net Present Value (NPV), both in financial and socio-economic terms, as well as the recovery period, are being constructed, the probabilistic modeling of which provides the information needed to determine the public spending performance, public expendityres financing the national economy development. Development and implementation of the public programs are faced with risks, their prediction being a complex approach. For the identification of risks, a wide range of values of indicators involved in risky actions is assigned so that probability appraisal of the occurrence of those risks can be made, including their impact upon environment and / or community. The mix of the probability of producing the risk and its impact leads to the identification of most of its manifestations, so that we can retain to evaluate the program only the significant risks. The paper also presents the most important criteria for the selection of the development programs / projects, focusing on addressing economic and social benefits, expressed in monetary terms. The cost-benefit analysis that must accompany any public project proposal will identify both its utility for the intended community and externalities, positive and / or negative, that will be a factor of impact upon the NPV.
Authors and Affiliations
Emilia Cornelia STOICA, Mihaela SUDACEVSCHI
Keywords
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