2023 Annual Evaluation Review: What Explains ADB’s Project Performance, 2016–2022

Evaluation Document | 13 April 2023

The 2023 Annual Evaluation Review (AER) provides a summary of the Asian Development Bank’s (ADB) development effectiveness based on findings and evidence from Independent Evaluation Department’s (IED) work.

The success rate of ADB’s sovereign operations continued to steadily decline in 2016–2022. This was driven by slumping infrastructure performance, especially because of operations in relatively new areas of activity in transport and energy, such as rail, urban public transport, energy efficiency and conservation, and energy sector development and institutional reform. In nonsovereign operations, the performance of private sector projects remained stable, although financial institution projects and legacy private equity funds continued to lag. In the first full reporting in 2022 of IED-validated technical assistance (TA) success rates, results from the independent assessment indicated that ambitious objectives and inappropriate performance indicators in design and monitoring frameworks undermined TA projects’ relevance and effectiveness.

To better understand why some sovereign projects succeed and others do not, this year’s AER took a “deep dive” through an analysis of the correlates of project success, a staff perception survey, qualitative information gleaned from key informant interviews and focus group discussions, and case studies comparing higher- with lower-performing projects. The assessment found that project factors—such as project complexity, risk, supervision, delegation, financing utilization, and procurement and design readiness—accounted for nearly three-fourths of the explainable variation in sovereign performance in 2016–2022. Hence, interventions devoted to enhancements in project design, implementation, and monitoring can address challenges arising from project factors, which are directly, but not completely, under the influence of ADB sector and project teams.

Country factors—such as governance, political stability, fiscal management, economic performance, and unforeseen events—accounted for the remaining variation in sovereign performance in 2016–2022. While they cannot be affected directly by project activities, they influence all stages of the project cycle. The risks arising from country factors can be in part mitigated through ADB’s risk assessments, policy advice and TA, among others. 

To improve performance, the AER notes the importance of effective project appraisal on a technical, economic, and fiduciary basis; a country-level perspective for supporting enhancements in the performance of individual sovereign projects; and adequate risk management and mitigation and high quality due diligence especially for riskier, more complex approaches. These measures need to be followed up with adequate supervision and corrective actions during implementation, informed by sound monitoring and evaluation.