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p. 1 of 6 BACK | NEXT Foreword I. Introduction II. Economic Analysis in 2003: An Overview III. Project Rationale and Analysis of Alternatives: Further Assessment IV. Further Improving EREA's Service Delivery V. Conclusions and Recommendations

Economic Analysis Retrospective: 2003 Update

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Foreword

This report is a follow up to the retrospective report published last year that reviewed the quality of economic analysis of ADB-financed projects and programs processed in 2002 entitled Economic Analysis in 2002: A Retrospective (Retro 2002). The report presents an updated assessment based on the projects and programs reviewed in 2003, focusing on two aspects. First, it provides a preliminary assessment of the responsiveness so far to the recommendations of Retro 2002. It is also to determine if changes move broadly in the right direction and to provide clarifications accordingly. Second, the report critically reviews the quality of analysis in respect to project rationale and alternatives—the two areas being the critical link in the analytical chain.

The key to strengthening the articulation of project rationale and improving alternative analysis lies in systematic and careful problem diagnosis both at country and sector level and at project level. Country and sector analysis is an essential step to identify key problems, their causes and effects, and the basic rationale for a project and its objective. Project-level appraisal, in turn, helps to revalidate the project rationale and assessment of project feasibility and economic viability. Indeed, project-level appraisal is preconditioned on the choice of a particular operation. So, in order to improve the quality-at-entry, ADB needs to further strengthen country and sector studies leading to the preparation of operational program and subsequently, individual projects.

Economic Analysis Retrospective: 2003 Update (Retro 2003) also presents an assessment of how the Economics Research and Operations Support Division (EREA) could more effectively support the regional departments, through prioritizing its work program and activities, with the view to provide more relevant and value-adding advisory assistance.

Ifzal Ali
Chief Economist

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