engleski

Multiple criteria decision analysis of public investment options: application to streetlighting renewal projects

The last global economic crisis set fiscal consolidation as one of the most relevant goals of economic policy. At the same time, efforts are necessary to increase economic growth rates, particularly by increasing quantity and quality of public investment. However, the lack of fiscal space and other impediments make these goals hard to attain. On the contrary, in many countries data show negative dynamics of quantity and quality of public investment. In terms of energy efficiency investment, trends are positive. However, the pace of investment significantly underperforms the goals set. We argue that one of the major reasons is the lack of financial innovation and project selection methodology. For this reason, projects have still been mainly financed under traditional procurement models. Surprisingly, most countries do not exploit the advantages of alternative models of financing which do not affect public debt level, significantly reduce fiscal deficits and reduce fiscal risks. This article argues that a multi-criteria approach used at the initial stages of project preparation increases the potential for project realisation and the overall quantity and quality. In order to provide empirical evidence, we use information on energy efficiency streetlighting projects and present a case of a traditional versus alternative financing models.

multiple criteria decision analysis (M.C.D.A.), public investment, public debt, traditional procurement, public–private partnerships (P.P.P.), energy efficiency

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