Public R&D project portfolio selection problems under expenditure uncertainty and sectoral budget balancing

Çağlar, Musa
In this dissertation, we deal with the two issues that exist in the practice of public R&D funding program management. First one is the underutilization of the funding budget owing to several sources of expenditure uncertainty. Project cancellations and spending uncertainty of successfully completed projects cause to funding budget underutilization. In the first and second part of the dissertation, we propose new approaches to enhance the utilization of the total funding budget. Specifically, in the first part of the dissertation, we focus on incorporation of project cancellations into the decision making process. In the second part of the dissertation, we deal with stochastic modeling of the expenditures of both canceled and successfully completed projects. We showed that modeling those uncertainties can significantly improve the utilization of the funding budget. Increased public R&D budget utilization will help to support more R&D projects and hence achieve higher socio-economic impact. Second issue in the practice of R&D funding management is balancing of the total funding budget among sectors. In the third part of the dissertation, we deal with incorporation of sectoral impact assessment results into the decision making process to ensure sectoral budget balancing. We compare our proposed approach with some alternative policy options. We showed that proposed model enhances total impact of funding budget by keeping relative budget balancing among sectors.