Catalog

	Table of Contents
p. 1 of 74 BACK | NEXT I. Introduction II. Background III. The Economic Rationale of A Project IV. Macroeconomic and Sectoral Context V. An Integrated Approach To Economic Analysis VI. Identification and Quantification of Costs and Benefits VII. Valuation of Economic Costs and Benefits VIII. Large Projects, Linkages, and National Affordability IX. Least-Cost and Cost-Effective Analysis X. Investment Criteria: Economic Viability XI. Discount Rate XII. Uncertainty: Sensitivity and Risk Analysis XIII. Sustainability of Project Effects XIV. Distribution of Project Effects XV. Projects and Policies XVI. Appendices XVII. Others

Guidelines for the Economic Analysis of Projects

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I. Introduction

1. These guidelines provide a general approach for the economic analysis of projects for application by the Asian Development Bank.¹ While the guidelines focus on the objective of maximizing net output or income, which is often referred to as the "economic" or "efficiency" objective, they do so in a broad manner to ensure consistency with the Banks focus on

• the social sectors and the environment, and
• greater project and program support to develop institutions and organizations that facilitate economically efficient market activity in the Bank's developing member countries.

2. The economic analysis of projects includes an assessment of the sustainability of project effects to ensure that

• the project provides sufficient incentives for producers,
• sufficient funds are available to maintain project operations,
• the least cost means of providing the project benefits is used,
• the distribution of project benefits and costs is consistent with project objectives, and
• environmental effects are included in the analysis (see Appendix 1).

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¹ These guidelines are a revision of the previous edition published in 1987. The revision draws on research undertaken by the Bank and other multilateral lending institutions.

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