A Study on the Ex-ante Evaluation on Government R&D Programs Using Fuzzy Reasoning

Abstract

In 2007, the Korean government officially introduced an ex-ante evaluation system, the preliminary feasibility study (PFS), for supporting the decision making process that informs R&D investment budgets, which uses economic, policy, and technological criteria to evaluate prospective R&D programs. From an analytical perspective, this kind of balanced assessment is very important in budget allocation decision making and thus the need for objective quantitative values that can lead to a conclusive judgment on the status of an R&D investment has been growing. However, owing to measurement problems and a lack of information, PFSs as well as economic feasibility assessments, a critical subdimension of PFSs, have faced difficulties in deriving a satisfactory single assertive conclusive value. Furthermore, the emphasis on expected economic returns of the R&D investment from the perspective of long-term national strategy in PFSs seems to contradict the original intention of ex-ante evaluation system, which is supposed to take not only economic but also technological and policy dimensions into account independently. The aim of this study is to investigate the question of independency in PFSs, especially in the assessment of economic feasibility raised by many critics. If there are some systematic connections between assessments of other dimensions of feasibility and the economic one, it becomes hard to sustain the basic assumption of the PFS, and we need to explicitly take this linkage into account in performing PFSs. To verify the existence of this connection, I propose a method to derive pseudovalues that provide an economic assessment of the R&D program from those originally derived via analyses: a method of a fuzzy reasoning approach that converts experts judgments into systematic calculations. Furthermore, I suggest that the results generated by fuzzy reasoning can be used to complement a traditional economic analysis, since fuzzy reasoning can inform the development of a comprehensive structure for ex-ante evaluation for government programs.