Evaluating how multilateral development banks produce and use benefit-cost evidence in water and sanitation project decisions

Principal Supervisor:   Ian Ross (LSHTM)

Co-Supervisor:   Elisa Van Waeyenberge (SOAS)

Project Description

Regional development banks and the World Bank disbursed US$ 120 billion for water, sanitation, and hygiene (WASH) projects in the 5 years to 2020. Some projects succeed and others fail. For example, a third of World Bank WASH projects during 2007–2016 had “moderately unsatisfactory” outcomes or worse. Benefit-cost analyses (BCA) of candidate projects are carried out at the appraisal stage, and the African/Asian Development Banks and World Bank make appraisals of approved projects available online. These BCAs are usually upbeat about economic returns, perhaps unsurprisingly because only appraisals of approved projects are published. However, given the substantial WASH finance at stake, investigation is warranted of: (i) the influence of interim and final BCA results on project design and evaluation decisions; (ii) the role of partner governments in economic analyses; (iii) similarities and differences in BCA practice across institutions; (iv) whether rates of return projected ex ante are higher or lower than those assessed ex post once key results are achieved.

The aim of this PhD is to evaluate approaches to BCA in project appraisals by multilateral development banks. Its specific objectives are to:

  1. Review methods applied by development banks in BCAs of WASH projects, in the context of the broader practices of each institution.
  2. Explore how BCA methodological decisions were made as part of broader project selection and appraisal, in a qualitative exploration with stakeholders in six recently-approved projects.
  3. Undertake ex-post BCAs of three recently-completed development bank projects, and compare results to those projected at the appraisal stage.

This evidence generated could help improve BCA methods and practice within and beyond these institutions, enabling more efficient allocation of resources over time.

Key References

  1. Independent Evaluation Group (2017). “A Thirst for Change : The World Bank Group’s Support for Water Supply and Sanitation, with Focus on the Poor.” http://hdl.handle.net/10986/29345
  2. Flyvbjerg, B., & Bester, D. (2021). The Cost-Benefit Fallacy: Why Cost-Benefit Analysis Is Broken and How to Fix It. Journal of Benefit-Cost Analysis, 12(3), 395-419. doi:10.1017/bca.2021.9
  3. Yannis Arvanitis, Marco Stampini & Desiré Vencatachellum (2015) Balancing development returns and credit risks: project appraisal in a multilateral development bank, Impact Assessment and Project Appraisal, 33:3, 195-206, DOI: 10.1080/14615517.2015.1041837
  4. Lavagnon Ika & Simon Feeny (2022) Optimism Bias and World Bank Project Performance, The Journal of Development Studies, 58:12, 2604-2623, DOI:10.1080/00220388.2022.2102901

Further details about the project may be obtained from

Ian Ross Ian.Ross@lshtm.ac.uk

Elisa Van Waeyenberge ew23@soas.ac.uk

How to apply

A Master’s degree equivalent to UK merit or distinction is essential, ideally in economics but alternatively in public health, engineering, development studies, or any relevant subject. An interest in both quantitative and qualitative aspects of social science is essential, with aptitude for statistical analysis strongly desirable. Studentships are open to international candidates. Successful applicants who are nationals of low-income countries or lower-middle income countries may be eligible for an LSHTM bursary to cover fee top-up costs, following the principles for UKRI studentships (https://www.lshtm.ac.uk/study/fees-and-funding/funding-scholarships/ukri-international-recruitment-lshtm)

Further details on how to apply here: https://www.lshtm.ac.uk/study/fees-funding/funding-scholarships/2023-24-bloomsbury-colleges-phd-studentship-project-1

Closing date for applications is: 
Sunday 19th February (23.59)