The Economic Evaluation of Projects · Papers From a Curriculum Development Workshop

The chapters in this volume were originally papers for an Economic Development Institute (EDI) Economic Analysis of Projects curriculum development workshop. The workshops' objectives were to reexamine curriculum content and review teaching courses. This book presents a simplified approach to project evaluation adopted by the Bank. The following conclusions were reached: a) the use of economic surplus as the sole measure in formal project evaluation means that a great burden is placed on separate analysis of the social and macroeconomic context of the project; b) project evaluation should be simple and understandable; c) changes in the relative prices of production factors and final products require more attention in project evaluation. Price projections to get at relative price changes require equal or greater attention than conversion factor or shadow price estimation; d) computer technologies have rendered formal risk analysis accessible to all. Monte Carlo simulations should be an important part of project evaluation, especially in connection with price projections. In many cases, point estimates of variables can now be replaced by probability distribution and the probabilities of accepting a bad project or rejecting a good one can be stated.