Cost-Benefit Analysis for Development: A Practical Guide

Institutional Document | January 2013

This practical guide provides an overview of recent methodological developments in cost-benefit analysis as well as suggested improvements in the economic analysis of projects in selected sectors through case studies.

The Asian Development Bank (ADB) has been continuously undertaking measures to enhance the effectiveness of its operations. To improve projects both at the preparation and implementation stages, ADB issued the Guidelines for Economic Analysis of Projects in 1997 as a means to enhancing project quality at entry. The conduct of proper economic analysis helps ensure the efficient use of development funds and public resources and thereby increase aid effectiveness.

This practical guide is a supplement to the Guidelines for the Economic Analysis of Projects. It provides an overview of recent methodological developments in cost-benefit analysis as well as suggested improvements in the economic analysis of projects in selected sectors through case studies. These case studies illustrate the application of suggested methodologies, taking into account sector-specific needs, as well as difficulties faced by practitioners in terms of data and time constraints during project processing. It also aims to contribute to ADB's capacity building initiatives as this will be the main reference material for conduct of economic analysis.

Contents 

  • Foreword
  • Introduction
  • Economic Analysis of Projects: An Overview
  • Theory and Practice in the Choice of Social Discount Rate for Cost-Benefit Analysis: A Survey
  • Good Practices for Conducting Willingness-to-Pay Surveys in the Water and Sanitation Sector
  • Assessing the Willingness to Pay for Improved Water Supply in Sri Lanka
  • Economic Analysis of Integrated Services Projects
  • Economic Analysis of Transport Improvements
  • Appraising Electricity Projects
  • Economic Analysis of Power Generation and Transmission Projects
  • Bibliography and References