Rede Alta Velocidade, SA (RAVE), the state-owned company responsible for planning and developing a major high-speed rail project in Portugal, must persuade both public officials and lenders that the project is worth undertaking. It must also make a recommendation on the appropriate organizational form for the enterprise. Specifically, it must determine the role of the Portuguese government in financing and operating the high-speed rail network, with options ranging from full development and management of the project by the public sector to completely private development and management. Lying in between these two polar cases were a variety of hybrid models, often referred to as public-private partnerships (PPPs). Using data in the case, students have the opportunity to perform a benefit-cost analysis of the project. They also must think carefully about the optimal role of the government in a major new infrastructure project.
After analyzing and discussing the case, students will be able to:
Understand the nature of a global public good
Perform a back-of-the-envelope benefit-cost analysis of polio eradication
Discuss the appropriate strategy for eradicating an infectious disease
Apply game theory to analyzing which countries would be likely to contribute funds toward global polio eradication
Discuss the role of private organizations in the provision of global public goods
