Academic literature on the topic 'Public Good Private Supply'

Criteria defining ‘good agricultural practice’ (GAP) were originally developed for on-farm production methods and resource use. For a decade, GAP principles have been applied throughout the entire agri-food supply chain by organisations promoting voluntary private standard (PS) schemes. Although the stated aim of such schemes is to provide consumers with guarantees of food safety and quality, they are strongly driven by the desire to reduce transaction costs within the chain and to limit the legal liability of chain operators and retailers in the wake of food safety lapses. They raise issues concerning their compatibility with the polluter pays principle, the legitimacy of the standard-setting process, potential duplication of the safeguards enshrined in public legislation, and the extent to which they erect barriers to market entry and impede competition. The extension of voluntary PS schemes to global food chains raises further questions about their compatibility with sustainable development goals and with WTO rules regarding import restrictions based on production methods. Current challenges include the operational coexistence of mandatory public standards and voluntary private standards in the agri-food arena, and how they might be better harmonised within national and international legal frameworks.

This study examines the effect of the performance of traders in the partnership relationship between the government, the private sector, and the community which is very necessary to build a food supply chain network in order to provide stimulation for the supporting factors and reduce the inhibiting factors for the success of the merchant's business, increase profits, and maintain food availability in traditional markets. This research was conducted at Andir Market, Bandung City, Indonesia. The research sample consisted of 100 Andir market traders. The research method used was a quantitative method with survey research that uses a questionnaire as the main instrument in data collection. The results of the analysis and discussion of the researchers have identified factors that can be used to strengthen the food supply chain network in the Public-Private-Community Partnership in traditional markets, namely management, empowerment, physical market conditions, and competitive strategies. Simultaneously, the four traders' performance factors have a significant effect on the food supply chain network with an R-square value of 0.658 (65.8%) with tcount greater than 1.96 or (3.817> 1.96). This means that if the changes that occur are good in the performance of traders, the food supply chain network in traditional markets will also be good, while the remaining 0.342 (34.2%) is explained by factors other than these variables. The expected implication is that the success of the supply chain network that is built due to strong interactions within the Public-Private-Community Partnership and other supply chain actors is able to face challenges during and after the pandemic. So that the quality of traditional market products, especially products that are quickly damaged or rotten, can be superior and well guaranteed for the food needs of people throughout Indonesia.

Nous abordons dans un premier chapitre la question de l'équivalence entre le CAP et le CAR. La disparité entre les deux indices a de profondes conséquences sur les prises de décision environnementales. Si la disparité était au départ associée aux carences de la méthode de mise en œuvre des enquêtes, les racines du problème s'avèrent être sensiblement plus profondes. Eu égard à l'évaluation des biens publics, nous pensons que la disparité est due à la substituabilité imparfaite entre les biens privés et publiques, ainsi qu'en raison de perceptions différenciées des agents économiques entre gains et pertes. C'est à cette problématique que le premier chapitre se consacre. Ainsi, le Chapitre 1 traite de la disparité entre les indices CAP et CAR dans l'évaluation hors-marché. Dans la littérature, l'effet de substitution et l'effet de dotation sont tenus responsables de l'existence des disparités. Nous montrons que la substituabilité imparfaite dans la fonction d'utilité indirecte peut provoquer la disparité soit entre le CAP et le CAR - en raison du coût d'opportunité -, soit entre les gains et les pertes, où il s'agit d'évaluer une perte sèche. La mesure en termes relatifs accentue la substituabilité imparfaite, mais l'effet de substitution est borné dans le modèle d'aversion aux pertes. Ce premier chapitre prépare le terrain pour le Chapitre 2, où nous évaluons un vrai bien public dans un contexte d'enchères expérimentales. Les offres d'achat et de vente reflètent le CAP et le CAR, d'où leur importance. L'effet de dotation et le choix du meilleur mécanisme d'enchères y sont examinés. Les études en enchères expérimentales jusqu'ici menées ont porté sur des biens privés non marchands ; elles sont supposées divulguer ce qui se passerait en présence de biens publics, car il est a priori difficile d'envisager une expérience où le bien public est échangé. Nous y parvenons. Nous n'employons pas de valeurs induites mais laissons libre cours aux valeurs autoproduites par les sujets d'étude recrutés pour l'occasion. L'étude nous permet de vérifier si, sur des marchés simulés, bien privé non marchand et bien public sont évalués de manière identique. Ainsi, nous évaluons l'impact de trois mécanismes d'enchère - le mécanisme Becker-DeGroot-Marschak (BDM), l'enchère au deuxième prix, et l'enchère aléatoire au nième prix - dans l'évaluation des CAP et CAR privés d'un bien public pur. Nos résultats montrent que l'effet de dotation peut être éliminé en répétant le mécanisme BDM. Néanmoins, à l'échelle logarithmique, l'enchère aléatoire au nième prix donne la vitesse de convergence vers l'égalité des indices de bien-être la plus élevée. Plus généralement, nous observons que les sujets d'étude évaluent les biens publics en se référant à l'avantage privé et subjectif qui résulte du financement du bien public. Par la suite, le Chapitre 3 discute de la sincérité des préférences en enchères expérimentales répétées et traite des propriétés incitatives des mécanismes BDM et l'enchère aléatoire au nième prix. Une propriété des mécanismes d'enchères est la compatibilité avec les incitations, dans laquelle un offreur a une stratégie faiblement dominante de soumettre une offre égale à sa valeur. Il a été prouvé que les deux mécanismes sont compatibles avec les incitations. En évaluation, on répète des sessions d'enchères pour donner aux offreurs l'opportunité d'apprendre le mécanisme de marché : leur donner du temps pour révéler leurs préférences. Or, ce procédé les contre-incite à adapter leurs préférences en fonction des prix publiquement signalés, si bien qu'il crée un risque de licitation stratégique (par opposition aux offres sincères). Si les offreurs s'engagent dans des stratégies déviantes pour faire face à l'incertitude sur la valeur du bien public, les mécanismes d'enchères perdent leur propriété de compatibilité avec les incitations et révèlent de fausses préférences. Lorsque les prix dépendent des offres soumises, c'est-à-dire en présence de mécanismes de marché répétés avec prix de compensation endogènes, l'hypothèse de l'indépendance des valeurs privées - sous-jacente à la compatibilité avec les incitations - est remise en question ; même si ce type de mécanismes fournit une participation active et un apprentissage du marché. Dans sa vision orthodoxe, le comportement marchand d'adaptation met en péril la compatibilité avec les incitations. Nous introduisons un modèle qui montre que les enchérisseurs licitent suivant l'heuristique d'ancrage et d'ajustement, dépendante d'une fonction de pondération séquentielle, laquelle prend en compte les contraintes de compatibilité avec les incitations sans rejeter les prix signalés issus des autres offres. En déviant de leur ancrage dans le sens du signal public, les enchérisseurs opèrent dans un équilibre corrélé. Comme le prouve l'expérience du Chapitre 2, les contributions privées aux biens publics sont issues d'une démarche d'évaluation. Elles sont conduites aussi bien par des incitations asociales que sociales. Si l'offre privée du bien public est stimulée à la fois par une rationalité qui dicte de ne pas contribuer au bien public et de profiter de l'effort fourni par la collectivité, et par l'appétit pour la reconnaissance sociale qui incite à se faire publiquement connaître en tant que généreux donateur, laquelle des deux motivations domine ? Le Chapitre 4 fait ainsi la comparaison entre déculpabilisation et compétition pour le statut social dans la provision privée des biens publics. Lorsque les agents sont intrinsèquement impulsés, c'est-à-dire qu'ils contribuent essentiellement aux biens publics dans le but de soulager leur culpabilité d'avoir indirectement participé à leur dégradation, ils tendent à se comporter en passagers clandestins. En revanche, lorsque les agents sont extrinsèquement impulsés et se mettent en compétition pour atteindre du statut social qu'ils visent par le financement des biens publics à titre privé, leurs contributions deviennent des compléments stratégiques. Dans ce cas, le niveau agrégé des biens publics croît avec la réduction des écarts de revenus entre les agents. Injecter de la compétition pour le statut social dans des fonctions d'utilité augmente les contributions aux biens publics, et donc leur niveau global, faisant de la concurrence une incitation féconde pour résoudre le problème du passager clandestin.

Per XX a. paskutinius dešimtmečius viešojo ir privataus sektorių santykis gerokai pasikeitė. Tradiciškai viešojo sektoriaus veiklos sričiai priskirtų paslaugų teikimui ar infrastruktūros modernizavimui ir plėtimui imta naudoti viešojo ir privataus sektorių partnerystę. Koncesija yra vienas iš partnerystės modeliu. Ją galima apibūdinti kaip susitarimą tarp viešojo ir privataus sektorių, kurio tikslas sujungti viešuosius ir privačius išteklius, siekiant realizuoti viešosios politikos tikslus. Lietuvoje koncesijos, lyginant su kitomis valstybėmis, yra naujas reiškinys, neturintis tradicijų ir patirties. Viešosios institucijos retai nusprendžia investicijas pritraukti koncesijos sutarčių pagrindu. Šio darbo objektas yra koncesija. Tikslas - išnagrinėti koncesijų taikymo galimybes Lietuvoje. Tikslo pasiekimui iškelti trys uždaviniai, kurie nulėmė darbo struktūrą. Pirmojoje darbo dalyje analizuojant mokslinę literatūrą ir taikant apibendrinimo metodą nagrinėjamos ekonominės – socialinės viešojo ir privataus sektorių partnerystės atsiradimo prielaidos ir partnerystės sąvoka. Antrojoje dalyje, analizuojant viešojo ir privataus sektorių partnerystės taikymo galimybes atliekama mokslinės literatūros ir informacinių šaltinių analizė, taikomas klasifikavimo ir sisteminimo metodas. Trečiojoje darbo dalyje vertinant koncesijų taikymo galimybės atliekamas kokybinis tyrimas, suformuluojami pagrindiniai klausimai, atliekama norminių teisės aktų ir informacinių šaltinių lyginamoji analizė... [toliau žr. visą tekstą]
Infrastructure has been traditionally viewed as a natural monopoly under the management, control, financial responsibility of the central and local government. However, various countries of the world have shown a growing interest in Concessions (one of the Public Private Partnership model) over the last two decades. Concession is arrangement in which the public and private sectors join together to produce and deliver goods and services. It is a sufficiently new phenomenon in Lithuania and some shortcomings are noticeable in its application. The object of this thesis is Concession. The aim of work is to analyze possibilities to apply the concession in Lithuania. Three tasks were established for the realizing the goal meanwhile determining the structure of thesis. In the first part of thesis there is analysed Public Private Partnership, as phenomena, using analysis of academic literature. In the second part, by using analysis of special and statistical literature, there are analysed subjects influencing Public Private Partnership and experience of various countries of the world in the developing Partnership policy. Situation in Lithuania by excluding main prerequisites for developing concessions is analysed in the third part, using qualitative analysis of academic and special literature, laws, conference materials, comparative, case study methods and quantitative analysis by carrying out a survey of Municipalities opinion. Analysis of theoretical and practical aspects has shown... [to full text]

Cette thèse de doctorat met en avant les facteurs différentes qui influencent les contributions volontaires à un bien public. Le premier article présente un modèle général de contributions à un bien public dans lequel les individus d’un groupe ont des préférences altruistes vers les autres membres de leur groupe. De plus, j’examine un deuxième modèle où les membres peuvent donner des transferts de revenus privés aux autres membres en plus de contribuer au bien public. Sous la séparabilité additive des fonctions d’utilité, je trouve que l’équilibre (Nash) du modèle avec des transferts est étroitement lié à l’équilibre du modèle sans transferts. Dans le deuxième article, co-écrit avec mon directeur de thèse Nicolas Gravel, j’analyse l’impact de la distribution de croyances des agents sur les contributions à un bien public. Nous construisons un modèle où il existe une incertitude quant à l’avantage d’un bien public. Les individus ont des croyances hétérogènes à propos de cet avantage. Nous supposons que les contributeurs ont des préférences savagiennes qui sont représentées par une fonction d’utilité espéré dépendante de deux états. Les individus ont des croyances différentes au sujet du bénéfice qui résultant de la somme de leurs contributions. Le troisième article utilise les données d’une expérience de laboratoire pour étudier comment les contributions à un bien public sont affectes lorsque les sujets sont confrontés à une incertitude quant à l’avantage du bien public. De plus, je compare le cas où les sujets diffèrent dans l’avantage qu’ils retirent d’un bien public avec le cas où l’avantage est homogène
This doctoral thesis highlights the different factors that influence voluntary contributions to a public good. Chapter 1 presents a general model of private provision of a public good where individuals in a group have altruistic preferences towards other members of their group. Moreover, I examine a second model where members can give private transfers of income to other members they care about, in addition to contributing to the public good. Under additive separability of the utility functions, I find the Nash equilibrium of the model with transfers is closely connected to the equilibrium of the model without transfers. The threshold level of income of the model without transfers and the income of the poorest individual in the group together play a key role in determining the existence of private transfers of income. Chapter 2 examines how voluntary contributions to a public good are affected by the contributors’ heterogeneity in beliefs about the uncertain impact of their contributions. It assumes that contributors have Savagian preferences that are represented by a two-state- dependent expected utility function and different beliefs about the benefit that will result from the sum of their contributions. Chapter 3 uses data from a laboratory experiment to study how contributions to a public good are affected when subjects face uncertainty regarding the benefit from the public good. In addition, I contrast the case when subjects differ in the benefit they get from a public good with when the benefit is homogeneous. I investigate whether heterogeneity in benefits affects contributions differently under certainty and uncertainty

The privatization of K-12 education in Canada is not new. The public and private sectors feel like natural elements of the Canadian education system because they have existed side by side since confederation. However, this thesis challenges that tradition and argues that private education undermines collective responsibility for education as a shared, public good by catering to private interests and isolating students from the public realm. Not only does private education reinforce the likelihood of socio-economic stratification, but the concept of a “public good” is increasingly destabilized as social services like education are privatized. Why, then, does the privatization of K-12 education continue to be an insignificant political issue in Canada? This question is particularly pertinent at a time when neoliberalism is in full swing in the United States, and all the time more apparent in Canada. Neoliberalism’s emphasis on the precedence of economic ideals over concerns for social welfare and democratic participation has transformed the way that we understand “value”. Drawing on a broad range of scholars including Charles Taylor, Richard Pildes, Janice Gross Stein, Henry Giroux, Francois-Lyotard and Michel Foucault, this thesis argues that the values involved in the very concept of private education reinforce, and are reinforced by, neoliberal views about the place of the individual within society, and that these values are detrimental to the concern for education as shared, public good.

For the past six and half years a great deal of attention has been devoted to the reform of South African company law. The reform process commenced in September 2003, when the Department of Trade and Industry (DTI) initiated a reform programme that included a review of existing securities regulation and, of corporate structures and practices in the area of corporate governance. Subsequently, in March 2004 (and updated in June 2004) the DTI published a policy document on corporate law reform entitled 'South African Company Law for the 21st Century: Guidelines for Corporate Law Reform'. This policy paper explained that company law in South Africa would be reviewed and modernised. The objectives of the reform process were to align it with international trends and to accommodate the economic and legislative changes that have taken place in South Africa since the advent of democracy in 1994. The policy paper also explained that this reform process would occur in two stages. Firstly, urgent interim changes would be brought by the Corporate Law Amendment Act No 24 of 2006. The Act provided for, amongst others, assistance to acquire shares and greater protection of minority shareholders in respect of takeovers .The Act came into effect on 14 December 2007. Secondly, the new Companies Act will repeal and replace the entire Companies Act No 61 of 1973, when it becomes operational.

Public goods such as environmental conservation, amenity and carbon sequestration are increasingly emphasised in forest policy agendas. However, many public benefits in woodlands have occurred incidentally, rather than on the basis of socio-economic logic and often at locations relatively inaccessible to major centres of population. In fact, data reveal a concentration of privately owned woodland in densely populated areas, especially in central and southern England, and that woodland is often factored into residential location decisions and lifestyle behaviours. However, the provision of public goods is likely to be contingent on the value systems of private forest and woodland owners and their flexibility of response to measures promoted under the devolved forest strategies. A combination of qualitative and quantitative research methods were employed to construct a robust typology of private woodland owners with respect to their willingness and ability to deliver public good benefits in three study areas in England: the Lake District, Cornwall and the High Weald AONB. Building on an exploratory scoping study, Q Methodology interviews were conducted with 10 woodland owners in each study area, followed by a self-completion survey, administered using Dillman's Total Design Method. Data from 600 woodland owners was subjected to a Factor and Cluster Analysis, with the emergent model validated using Discriminant Analysis. Six discrete private woodland owner types were revealed: Individualists, Multifunctional Owners, Private Consumers, Conservationists, Investors and Amenity Owners. Important distinctions between owner groups are associated with the likely provision of particular benefits and disbenefits, and the classification suggests that a move from a production versus consumption/protection framework to one that includes intersecting goals may be more appropriate. Policy implications are discussed to facilitate use of the typology in targeting particular woodland owner groups with more nuanced policy mechanisms, including incentive schemes, market mechanisms and advisory services.

The performance of public utilities in low-income countries with respect to service to all customers, and particularly lower-income urban consumers, is understood to be limited in many cases. The Government of Ghana chose to implement a private sector management contract in order to deliver significant change in service delivery and financial viability. The five year management contract with Aqua Vitens Rand Limited ran from 2006 to 2011 and was not renewed. This study investigates the public utility outcomes, both as a state owned corporation and a state owned limited liability Company, and compares those outcomes with the achievements of the private operator through a Management Contract. The latter two management models operated under the oversight of the newly formed economic regulator, the Public Utility Regulatory Commission in 1999 and any effect of that regulation is considered. The hypothesis of the study developed in 2008 was that “a management contract would not provide the necessary level of empowerment, incentives and commitment and access to resources for a private operator to adequately and efficiently perform even where there is an established economic regulator with a clear mandate”. The case study approach was employed for the study data was gathered on the operations, activities, regulation and management of the urban water utility through documentary review, key-informant interviews, household surveys, public hearing meetings and user observations. However, three major cities including Accra, Kumasi and Tamale were used for the household survey. These three cities were carefully picked out taking into account the political, economic, geographical, social and cultural significance that each of the them represents and commands in Ghana.

Thesis (S.M. in Technology and Policy)--Massachusetts Institute of Technology, Engineering Systems Division, Technology and Policy Program, 2009.
This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections.
Includes bibliographical references (p. 151-163).
This thesis looks at the potential of labeling products with life cycle greenhouse gas emission information as a bottom-up, complementary alternative to carbon cap and trade systems. By improving the transparency of product carbon footprint information, a market for low carbon intensity products can be created. The conduct of such product life cycle assessments often allows companies to uncover cost effective emission reduction opportunities typically in the order of 10%-20%. Society benefits both from the increased supply chain efficiency of these companies as well as the heightened awareness of climate change among consumers as companies communicate these information to them. An examination of the history of the development of the nutritional label and various eco-labels in the U.S. highlights the importance of timely government intervention in setting guidelines and standards to prevent companies from misleading consumers with unsubstantiated product health or environmental claims. Case studies of current carbon labeling initiatives worldwide demonstrate the benefits of government affiliation in building credibility during their early stages. This affiliation helps in attracting the participation of large established companies who provide strong reinforcing effects that are crucial to the growth and success of new initiatives. There is still lack of consensus about the ideal format for a carbon label. A seal of approval type label could be ideal to attract companies in the initial stages which can later be succeeded by an information disclosure based format as more consumers start to understand the meaning of product carbon footprints in the future.
(cont.) Voluntary public private partnerships have been used extensively by the U.S. Environmental Protection Agency to reduce greenhouse gas emissions. These partnerships can serve as a potential model for a future carbon labeling initiative in the U.S. The SmartWay Transport Partnership is highlighted as a successful program both in terms of membership growth and emissions saved. System Dynamics modeling is applied as a tool to aid in understanding how the structure of such programs is critical to their success and is demonstrated as a method to potentially quantify the benefits of these programs prior to their actual implementation.
by Kwan Chong Tan.
S.M.in Technology and Policy

Public-Private Partnership (PPP) means to join forces with public and private bodies. The supplementation to this process by public and private organizations and their gains are ab-initio subjected with an agreement. Thereby the government activate the market dynamics in order to supply some public goods without using budget resources. In this paper, the significance of public-private partnership will be emphasized and will discuss which projects are eligible and how will they be realized and what kind of co-operations will take place by PPP projects in Kyrgyzstan.

The quest for producing vehicles friendlier to the environment is often impeded by the fact that a producer private good objective, such as maximum profit, competes with the public good objective of minimizing impact on the environment. Contrary to commercial claims, there may be no defined decision maker in the vehicle production and consumption process who takes ownership of the public good objective, except perhaps the government. One way ecofriendly products could become more successful in the marketplace is if public and private good objectives become more aligned to each other. This paper introduces three metrics for comparing Pareto curves in bi-objective problems in terms of relative level of objective competition. The paper also presents a quantitative way of studying an individual firm’s trade-off between profit and fuel consumption for automotive products, currently undergoing an historic evolution in their design. We show how changes in technology, preferences, competition, and regulatory scenarios lead to Pareto frontier changes, possibly eliminating it altogether.

The focus on social responsibility is even more pronounced given that competitiveness in the private sector can be surpassed by responsible business policies towards both the environment and the community. All institutions from public sector should act in the interest of the communities they represent, promoting at the same time the benefits of the “social responsibility” concept. Including this concept within the public sector creates an added value, in terms of both the morality of the decisions (taken by the legal representatives of the communities) and this kind of behaviour’s promotion by the organizations working for the public sector or by the companies which represent the private sector. Since ancient times, moral judgements were concepts debated by both psychology experts and within the church, however, at present, this area has been expanded so that major companies are building their development strategy by placing customer satisfaction as the central element; and the public sector has the same target: solving citizen’s needs. Making ethical decisions, by taking into consideration communities’ benefits, is a goal both public and private sectors are trying to achieve in their approach of carrying out their mission: act for the good of the community by including social measures and environmental protection in the foundation of their decisions. Competition between community initiatives and socio-environmental projects where companies get involved is getting tighter and tighter in a context where business practices are more and more visible.

The article covers ideas of public life in ancient Greek philosophy having given rise to discussion on the necessity of separation and rapprochement of public and private spheres. This study rests upon the analysis of ‘publicness’ and ‘privacy’ in the philosophical conceptions of such authors as J. Habermas who deems ‘publicness’ as communication, and H. Arendt who refers to ‘publicness’ as the polis-based worldview. Plato’s dialogue ‘The State’, which can be deemed as the first-ever example of a utopian text, provides us with the most detailed and consistent instance of criticism of the private sphere, the necessity to merge it into public life to create society. Only in this way could society become a model of an ideal polis leading to the common good. The utopism of Plato’s pattern determines characteristics of the entire utopian genre arising from the idea of the individual merging with the state, and the private sphere merging into the public sphere. Plato’s ideal polis is contrasted with the concepts of the state formed by Modern Age liberal thought, which have largely determined modern views on the division of these spheres, leading to a revision of the utopian projects and a change in the relationship between the private and the public therein. A comparison of various utopian texts results in finding out that the utopian idea of the refusal of the private sphere of life in favour of serving the common good contradicts the modern ideal of freedom, which is the reason for its criticism and for the increasing number of texts with an anti-utopian character.

The public and private sector, civil society, and academic institutions have developed many innovative solutions to manage public health aspects of the coronavirus disease (COVID-19) pandemic. Innovators have focused on tools for surveillance, supply chain management, clinical trials, diagnosis, communication, and developing vaccines. These have been supplemented by research collaboration platforms, isolation and hospital upgrading novelties, as well as risk stratification resources. This paper provides an overview of these solutions to enhance the evidence-based application of innovative public health approaches. The author’s also propose that a “living platform” for sharing public health innovations is developed.

We explored some of the questions posed by digitalisation in an accompanying working paper focused on constitutional theory: Digitalisation, the ‘Fourth Industrial Revolution’ and the Constitutional Law of Privacy in South Africa. In that paper, we asked what legal resources are available in the South African legal system to respond to the risk and benefits posed by digitalisation. We argued that this question would be best answered by developing what we have termed a 'South African public law perspective'. In our view, while any particular legal system may often lag behind, the law constitutes an adaptive resource that can and should respond to disruptive technological change by re-examining existing concepts and creating new, more adequate conceptions. Our public law perspective reframes privacy law as both a private and a public good essential to the functioning of a constitutional democracy in the era of digitalisation. In this working paper, we take the analysis one practical step further: we use our public law perspective on digitalisation in the South African health sector. We do so because this sector is significant in its own right – public health is necessary for a healthy society – and also to further explore how and to what extent the South African constitutional framework provides resources at least roughly adequate for the challenges posed by the current 'digitalisation plus' era. The theoretical perspective we have developed is certainly relevant to digitalisation’s impact in the health sector. The social, economic and political progress that took place in the 20th century was strongly correlated with technological change of the first three industrial revolutions. The technological innovations associated with what many are terming ‘the fourth industrial revolution’ are also of undoubted utility in the form of new possibilities for enhanced productivity, business formation and wealth creation, as well as the enhanced efficacy of public action to address basic needs such as education and public health.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.

When Hurricane Harvey hit the Texas coast as a category 4 hurricane on August 25, 2017, it resulted in $125 billion in damage, rivaling only Hurricane Katrina in the amount of damage caused. It also resulted in the deaths of 88 people and destroyed or damaged 135,000 homes. Much of that devastation was the result of flooding. The storm dumped over 27 trillion gallons of rain over Texas in a matter of days. Some parts of Houston received over 50 inches of rainfall. The potential liability that dam and reservoir operators may face for decisions they make during storm and flooding events has now become a major concern for Texas citizens and its elected officials. Law suits have now been instituted against the federal government for its operation of two flood control reservoirs, as well as against the San Jacinto River Authority for its operation of a water supply reservoir. Moreover, the issues and concerns have been placed on the agenda of a number of committees preparing for the 2019 Texas legislative session. This report reviews current dam and reservoir operations in Texas and examines the potential liability that such operators may face for actions and decisions taken in response to storm and flooding events. In Section III, the report reviews dam gate operations and differentiates between water supply reservoirs and flood control reservoirs. It also considers pre-release options and explains why such actions are disfavored and not recommended. In Section IV, the report evaluates liabilities and defenses applicable to dam and reservoir operators. It explains how governmental immunity can limit the exposure of state and federally-run facilities to claims seeking monetary damages. It also discusses how such entities could be subject to claims of inverse condemnation, which generally are not subject to governmental immunity, under Texas law as well as under the Fifth Amendment to the U.S. Constitution. In addition, the Section discusses negligence and nuisance claims and concludes that plaintiffs asserting either or both of these claims will have difficulty presenting successful arguments for flooding-related damage and harm against operators who act reasonably in the face of storm-related precipitation. Finally, Section V offers recommendations that dam and reservoir operators might pursue in order to engage and educate the public and thereby reduce the potential for disputes and litigation. Specifically, the report highlights the need for expanded community outreach efforts to engage with municipalities, private land owners, and the business community in flood-prone neighborhoods both below and above a dam. It also recommends implementation of proactive flood notification procedures as a way of reaching and alerting as many people as possible of potential and imminent flooding events. Finally, the report proposes implementation of a dispute prevention and minimization mechanism and offers recommendations for the design and execution of such a program.

The coronavirus disease (COVID-19) is significantly impacting the development and life cycle of public–private partnership (PPP) projects in Asia and the Pacific. This has led to disruptions in trade, production, and supply chains as well as sharp declines in consumption and investment. This guidance note examines the impacts of COVID-19 on PPP projects in region including the implications for contractual arrangements. It presents governance practices that will help mitigate the risks and outlines important considerations for governments in regard to managing PPP projects for a post-pandemic recovery.

With its annual Payment Systems Report, Banco de la República offers a complete overview of the infrastructure of Colombia’s financial market. Each edition of the report has four objectives: 1) to publicize a consolidated account of how the figures for payment infrastructures have evolved with respect to both financial assets and goods and services; 2) to summarize the issues that are being debated internationally and are of interest to the industry that provides payment clearing and settlement services; 3) to offer the public an explanation of the ideas and concepts behind retail-value payment processes and the trends in retail payments within the circuit of individuals and companies; and 4) to familiarize the public, the industry, and all other financial authorities with the methodological progress that has been achieved through applied research to analyze the stability of payment systems. This edition introduces changes that have been made in the structure of the report, which are intended to make it easier and more enjoyable to read. The initial sections in this edition, which is the eleventh, contain an analysis of the statistics on the evolution and performance of financial market infrastructures. These are understood as multilateral systems wherein the participating entities clear, settle and register payments, securities, derivatives and other financial assets. The large-value payment system (CUD) saw less momentum in 2019 than it did the year before, mainly because of a decline in the amount of secondary market operations for government bonds, both in cash and sell/buy-backs, which was offset by an increase in operations with collective investment funds (CIFs) and Banco de la República’s operations to increase the money supply (repos). Consequently, the Central Securities Depository (DCV) registered less activity, due to fewer negotiations on the secondary market for public debt. This trend was also observed in the private debt market, as evidenced by the decline in the average amounts cleared and settled through the Central Securities Depository of Colombia (Deceval) and in the value of operations with financial derivatives cleared and settled through the Central Counterparty of Colombia (CRCC). Section three offers a comprehensive look at the market for retail-value payments; that is, transactions made by individuals and companies. During 2019, electronic transfers increased, and payments made with debit and credit cards continued to trend upward. In contrast, payments by check continued to decline, although the average daily value was almost four times the value of debit and credit card purchases. The same section contains the results of the fourth survey on how the use of retail-value payment instruments (for usual payments) is perceived. Conducted at the end of 2019, the main purpose of the survey was to identify the availability of these payment instruments, the public’s preferences for them, and their acceptance by merchants. It is worth noting that cash continues to be the instrument most used by the population for usual monthly payments (88.1% with respect to the number of payments and 87.4% in value). However, its use in terms of value has declined, having registered 89.6% in the 2017 survey. In turn, the level of acceptance by merchants of payment instruments other than cash is 14.1% for debit cards, 13.4% for credit cards, 8.2% for electronic transfers of funds and 1.8% for checks. The main reason for the use of cash is the absence of point-of-sale terminals at commercial establishments. Considering that the retail-payment market worldwide is influenced by constant innovation in payment services, by the modernization of clearing and settlement systems, and by the efforts of regulators to redefine the payment industry for the future, these trends are addressed in the fourth section of the report. There is an account of how innovations in technology-based financial payment services have developed, and it shows that while this topic is not new, it has evolved, particularly in terms of origin and vocation. One of the boxes that accompanies the fourth section deals with certain payment aspects of open banking and international experience in that regard, which has given the customers of a financial entity sovereignty over their data, allowing them, under transparent and secure conditions, to authorize a third party, other than their financial entity, to request information on their accounts with financial entities, thus enabling the third party to offer various financial services or initiate payments. Innovation also has sparked interest among international organizations, central banks, and research groups concerning the creation of digital currencies. Accordingly, the last box deals with the recent international debate on issuance of central bank digital currencies. In terms of the methodological progress that has been made, it is important to underscore the work that has been done on the role of central counterparties (CCPs) in mitigating liquidity and counterparty risk. The fifth section of the report offers an explanation of a document in which the work of CCPs in financial markets is analyzed and corroborated through an exercise that was built around the Central Counterparty of Colombia (CRCC) in the Colombian market for non-delivery peso-dollar forward exchange transactions, using the methodology of network topology. The results provide empirical support for the different theoretical models developed to study the effect of CCPs on financial markets. Finally, the results of research using artificial intelligence with information from the large-value payment system are presented. Based on the payments made among financial institutions in the large-value payment system, a methodology is used to compare different payment networks, as well as to determine which ones can be considered abnormal. The methodology shows signs that indicate when a network moves away from its historical trend, so it can be studied and monitored. A methodology similar to the one applied to classify images is used to make this comparison, the idea being to extract the main characteristics of the networks and use them as a parameter for comparison. Juan José Echavarría Governor

From this edition, the Financial Stability Report will have fewer pages with some changes in its structure. The purpose of this change is to present the most relevant facts of the financial system and their implications on the financial stability. This allows displaying the analysis more concisely and clearly, as it will focus on describing the evolution of the variables that have the greatest impact on the performance of the financial system, for estimating then the effect of a possible materialization of these risks on the financial health of the institutions. The changing dynamics of the risks faced by the financial system implies that the content of the Report adopts this new structure; therefore, some analyses and series that were regularly included will not necessarily be in each issue. However, the statistical annex that accompanies the publication of the Report will continue to present the series that were traditionally included, regardless of whether or not they are part of the content of the Report. In this way we expect to contribute in a more comprehensive way to the study and analysis of the stability of the Colombian financial system. Executive Summary During the first half of 2015, the main advanced economies showed a slow recovery on their growth, while emerging economies continued with their slowdown trend. Domestic demand in the United States allowed for stabilization on its average growth for the first half of the year, while other developed economies such as the United Kingdom, the euro zone, and Japan showed a more gradual recovery. On the other hand, the Chinese economy exhibited the lowest growth rate in five years, which has resulted in lower global dynamism. This has led to a fall in prices of the main export goods of some Latin American economies, especially oil, whose price has also responded to a larger global supply. The decrease in the terms of trade of the Latin American economies has had an impact on national income, domestic demand, and growth. This scenario has been reflected in increases in sovereign risk spreads, devaluations of stock indices, and depreciation of the exchange rates of most countries in the region. For Colombia, the fall in oil prices has also led to a decline in the terms of trade, resulting in pressure on the dynamics of national income. Additionally, the lower demand for exports helped to widen the current account deficit. This affected the prospects and economic growth of the country during the first half of 2015. This economic context could have an impact on the payment capacity of debtors and on the valuation of investments, affecting the soundness of the financial system. However, the results of the analysis featured in this edition of the Report show that, facing an adverse scenario, the vulnerability of the financial system in terms of solvency and liquidity is low. The analysis of the current situation of credit institutions (CI) shows that growth of the gross loan portfolio remained relatively stable, as well as the loan portfolio quality indicators, except for microcredit, which showed a decrease in these indicators. Regarding liabilities, traditional sources of funding have lost market share versus non-traditional ones (bonds, money market operations and in the interbank market), but still represent more than 70%. Moreover, the solvency indicator remained relatively stable. As for non-banking financial institutions (NBFI), the slowdown observed during the first six months of 2015 in the real annual growth of the assets total, both in the proprietary and third party position, stands out. The analysis of the main debtors of the financial system shows that indebtedness of the private corporate sector has increased in the last year, mostly driven by an increase in the debt balance with domestic and foreign financial institutions. However, the increase in this latter source of funding has been influenced by the depreciation of the Colombian peso vis-à-vis the US dollar since mid-2014. The financial indicators reflected a favorable behavior with respect to the historical average, except for the profitability indicators; although they were below the average, they have shown improvement in the last year. By economic sector, it is noted that the firms focused on farming, mining and transportation activities recorded the highest levels of risk perception by credit institutions, and the largest increases in default levels with respect to those observed in December 2014. Meanwhile, households have shown an increase in the financial burden, mainly due to growth in the consumer loan portfolio, in which the modalities of credit card, payroll deductible loan, revolving and vehicle loan are those that have reported greater increases in risk indicators. On the side of investments that could be affected by the devaluation in the portfolio of credit institutions and non-banking financial institutions (NBFI), the largest share of public debt securities, variable-yield securities and domestic private debt securities is highlighted. The value of these portfolios fell between February and August 2015, driven by the devaluation in the market of these investments throughout the year. Furthermore, the analysis of the liquidity risk indicator (LRI) shows that all intermediaries showed adequate levels and exhibit a stable behavior. Likewise, the fragility analysis of the financial system associated with the increase in the use of non-traditional funding sources does not evidence a greater exposure to liquidity risk. Stress tests assess the impact of the possible joint materialization of credit and market risks, and reveal that neither the aggregate solvency indicator, nor the liquidity risk indicator (LRI) of the system would be below the established legal limits. The entities that result more individually affected have a low share in the total assets of the credit institutions; therefore, a risk to the financial system as a whole is not observed. José Darío Uribe Governor