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p. 13 of 30 BACK | NEXT Executive Summary I. The Setting II. Key Variables Affecting Project Quality A. The Approval Culture B. Ownership C. Quality of Macro and Sectoral Analyses D. Portfolio Management E. Institutional Capacity Assessment F. Beneficiary Involvement in Preparation and Implementation G. Evaluation of Risks/Sensitivity Analysis H. Clarity and Implementability of Project Design I. Role of the Bank in Project Administration J. Responsibility for Project Quality K. Major Themes in Project Quality Analysis III. Assessment of Current Bank Practices and Areas for Improvement IV. Findings, Recommendations and Action Plan V. Implications and Monitoring Arrangements

Report of the Task Force on Improving Project Quality : II. Key Variables Affecting Project Quality

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G. Evaluation of Risks/Sensitivity Analysis

35. If risk and sensitivity analysis are not thorough during project preparation, project performance may fall short of expected standards. Post-evaluation reports indicate, in several cases, overstatement of expected benefits; overly optimistic estimations of implementation schedules; and inadequate treatment of uncertainties that are widely prevalent in the macroeconomic, social and institutional environment.

36. The Bank needs to address these issues more systematically and carefully than it has done to date. The guidelines for sensitivity analysis need strengthening. Guidelines for assessing the risks relating to social and institutional factors need to be developed. Provision should be made in project preparation and processing, and in related documentation, for analysis of preventive and contingent measures. As the Bank increasingly adopts elements of the process-oriented approach, with more indicative rather than precise project designs and implementation approaches, the need for the comprehensive treatment of risks, sensitivity analysis, and preventive and contingent measures will be increasingly felt.

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