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What makes long-term investment decisions forward looking: A framework applied to the case of Amsterdam's new sea lock

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  • Pot, W.D.
  • Dewulf, A.
  • Biesbroek, G.R.
  • Vlist, M.J. van der
  • Termeer, C.J.A.M.

Abstract

Long-term investments challenge decision makers to look into the far future. Existing future studies often build upon a rational idea of decision making that does not help to explain why decision makers anticipate the future. In addition, existing studies do not provide a clear definition of what is considered as “forward looking”. This article proposes a framework that can be used to evaluate and explain for what reasons and based on what criteria decision makers take forward-looking investment decisions. We apply this framework to a specific decision-making case about a Dutch sea lock, making use of interviews (n = 16) and a content analysis of primary documents (n = 430). We find that not all investment decisions are necessarily forward looking. Secondly, we conclude from our case that decisions became forward looking because administrators used scenarios, visions, and flexible solutions to build support, avoid political risks and comply to formal rules. Scenario developers and urban planners could therefore involve administrators in early stages of the decision-making process to increase their awareness of the future towards which they are steering and provide them with alternative future paths. Furthermore, they could identify and use relevant institutional rules with forward-looking features to stimulate forward-looking decisions.

Suggested Citation

  • Pot, W.D. & Dewulf, A. & Biesbroek, G.R. & Vlist, M.J. van der & Termeer, C.J.A.M., 2018. "What makes long-term investment decisions forward looking: A framework applied to the case of Amsterdam's new sea lock," Technological Forecasting and Social Change, Elsevier, vol. 132(C), pages 174-190.
    • Handle: RePEc:eee:tefoso:v:132:y:2018:i:c:p:174-190
    DOI: 10.1016/j.techfore.2018.01.031
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    References listed on IDEAS

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    1. Michael P. Keane & Kenneth I. Wolpin, 2002. "Estimating Welfare Effects Consistent with Forward-Looking Behavior. Part I: Lessons from a Simulation Exercise," Journal of Human Resources, University of Wisconsin Press, vol. 37(3), pages 570-599.
    2. Arjan Hijdra & Jos Arts & Johan Woltjer, 2014. "Do We Need to Rethink Our Waterways? Values of Ageing Waterways in Current and Future Society," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(9), pages 2599-2613, July.
    3. Alessandra Bonfiglioli & Gino Gancia, 2013. "Uncertainty, Electoral Incentives and Political Myopia," Economic Journal, Royal Economic Society, vol. 0, pages 373-400, May.
    4. Dahlberg, Matz & Lindstrom, Tomas, 1998. "Are Local Governments Governed by Forward Looking Decision Makers?: An Investigation of Spending Patterns in Swedish Municipalities," Journal of Urban Economics, Elsevier, vol. 44(2), pages 254-271, September.
    5. Hamarat, Caner & Kwakkel, Jan H. & Pruyt, Erik, 2013. "Adaptive Robust Design under deep uncertainty," Technological Forecasting and Social Change, Elsevier, vol. 80(3), pages 408-418.
    6. Lauren Rickards & John Wiseman & Taegen Edwards & Che Biggs, 2014. "The Problem of Fit: Scenario Planning and Climate Change Adaptation in the Public Sector," Environment and Planning C, , vol. 32(4), pages 641-662, August.
    7. Rowland, Nicholas J. & Spaniol, Matthew J., 2017. "Social foundation of scenario planning," Technological Forecasting and Social Change, Elsevier, vol. 124(C), pages 6-15.
    8. Havas, Attila & Weber, K. Matthias, 2017. "The 'fit' between forward-looking activities and the innovation policy governance sub-system: A framework to explore potential impacts," Technological Forecasting and Social Change, Elsevier, vol. 115(C), pages 327-337.
    9. Segrave, A.J. (Andrew) & van der Zouwen, M.W. (Mariëlle) & van Vierssen, W. (Wim), 2014. "Water planning: From what Time Perspective?," Technological Forecasting and Social Change, Elsevier, vol. 86(C), pages 157-167.
    10. Michael P. Keane & Kenneth I. Wolpin, 2002. "Estimating Welfare Effects Consistent with Forward-Looking Behavior. Part II: Empirical Results," Journal of Human Resources, University of Wisconsin Press, vol. 37(3), pages 600-622.
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    Cited by:

    1. Pot, W.D. & Dewulf, A. & Biesbroek, G.R. & Verweij, S., 2019. "What makes decisions about urban water infrastructure forward looking? A fuzzy-set qualitative comparative analysis of investment decisions in 40 Dutch municipalities," Land Use Policy, Elsevier, vol. 82(C), pages 781-795.
    2. Jinho Choi & Nina Shin & Hee Soo Lee, 2020. "Exploring the Dynamics between M&A Activities and Industry-Level Performance," Sustainability, MDPI, vol. 12(11), pages 1-24, May.

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