Publications

	Table of Contents
p. 5 of 14 BACK | NEXT Introduction Part I: Scope of Project Economic Analysis Part II: The 10 Areas of Analysis 1. Assess Macroeconomic Context 2. Assess Sector Context 3. Assess Demand 4. Identify Economic Rationale 5. Identify Project Alternatives 6. Identify and Compare Benefits and Costs 7. Assess Financial and Institutional Sustainability 8. Undertake Distribution Analysis 9. Undertake Sensitivity and Risk Analysis 10. Establish a Project Performance Monitoring System (PPMS) Part III: Areas of Analysis in ADB's Project Processing Cycle

Key Areas of Economic Analysis of Projects : Part II: The 10 Areas of Analysis

---

Assess Sector Context

• Assess overall sector growth and performance, and area-specific performance.
• Assess resource availability and utilization, and determine comparative advantage of various economic activities.
• Assess market-related institution performance:
• Extent of property rights and contracts definition and enforcement and the effect on access to resources and income sources;
• Industry or service structure conduct and performance; availability and access to factors of production; supply chain, marketing, and service delivery issues; issues influencing transaction costs; and effects of taxes, subsidies, quotas;
• Effectiveness of information flows on market conditions and goods to existing and potential participants;
• Extent to which public and private institutions increase or inhibit competition in markets.
• Assess public institution performance:
• Role and functions of government and institutional framework in economic activity and service provision;
• Vertical and horizontal institutional arrangements including decentralization measures as appropriate;
• Efficiency and effectiveness of public institutions in policy making, regulation and service delivery;
• Allocation and management of public expenditure and benefit incidence.
• Identify other supply sources or service providers: government, private sector, non-government organizations (NGOs), etc.
• Assess the policy environment including price, market-institution or public institution policies.
• Assess patterns of public and private investment in the sector and conduciveness of the sector context to investment activities.
• Identify the priority binding constraints to sector performance and development in terms of market and non-market failures. Assess whether problems and their solutions should be addressed concurrently or sequentially.
• Identify the most appropriate form of developmental support: advisory technical assistance, policy-related or investment type operation.

Back 1. Assess Macroeconomic Context	Next 3. Assess Demand