October 1998, The World Bank
The main objective of this second phase is to propose minimum baseline requirements in terms of economic analysis of Social Investment Fund (SIF) subprojects that should be followed by SIFs financed by the Bank. For this purpose, four case studies were carried out in Bolivia (FIS and FDC), Argentina (FOPAR) and Panamá (FES). An analysis of different SIF methodologies and “best practice” economic analysis mechanisms will allow the World Bank to develop a simple methodology for the economic analysis of projects. The work was carried out in four steps:
(a) Revision of financial and economic analysis systems and methodologies utilized by SIFs. This step included a validation of the different processes, an assessment of the systems’ strengths and weaknesses and problems encountered during the implementation of the processes;
(b) Analysis of results of processes. This step included an analysis of variation in costs through the project’s different stages (appraisal, contracting, implementation and conclusion). The purpose of this analysis was to assess the efficiency of the financial appraisal system;
(c) Major Findings. After having concluded steps (a) and (b), a comparison of financial and economic analysis systems utilized by the SIFs was carried out; and
(d) Design of a Standard Economic Analysis Methodology for SIF projects. Based on major findings and on the consultants experience, final recommendations were made.
