Challenges of the Knowledge Society (May 2012)
PUBLIC PROJECTS BETWEEN NECESSITY AND IMPACT
Abstract
The main objective of public projects is to purchase one or more social benefits, targeting communities in which public authorities responsible for implementing these projects were elected. Unlike public projects, the main purpose of the projects undertaken in the private sector consists of maximizing the profit obtained by increasing the activity and / or minimize costs. Therefore, in order to analyze in economic and social terms the impact of development projects it is required, together with analysis of common issues, highlighting the differences between public and private projects. In this sense, we see greater difficulties in evaluating public projects, which should aim at minimizing the costs - as well as private projects - also achieving significant benefits and correctly targeted to the needs of the population, meantime taking into account economic and social present situation. Cost – effectiveness analysis is more difficultly to do, as it involves to estimate some indicators, expressed in monetary units, defined by a series of mostly social meanings, such as the cost of life, the improvement living conditions benefits, etc. The choice of discount rate and project operating life involves higher risks than in the private sector, at least for large investment projects, given that these designs achieve highly valuable public assets, which have to operate a long time for the community benefit. Public authorities responsible for public projects must choose the most suitable variant of proposed projects according to the respective communities present and future priorities set, based on a thorough socio-economic analysis, highlighting the increasing usefulness for society by implementing the project and also taking into account its specific activity.
