Diagnosing and Correcting Problems with Project Selection at the World Bank

In 1992, the World Bank Group’s success rate - as evaluated the Bank’s unit, the Independent Evaluation Group - had substantially declined. In response, the Bank formed a task force to determine what factors had caused the decline. The Task Force report detailed several problems with the Bank’s project selection and implementation process. A review of the report and other literature concludes that projects often fail to achieve their goals because of overly optimistic ex-ante appraisals, and project delays. The project selection and design process should attempt to mitigate the risk of project delay by ensuring that financing is available on time, site conditions are stable, and the supply of materials is adequate. A regression analysis based on projects implemented in the 21st century investigates how project success has changed since the report, and how the Bank can continue to improve its project selection process. It concludes that the Bank’s projects are more successful when implemented in countries with a political environment conducive to businesses. In addition, projects experience more delays and are less successful when the borrowing country is responsible for funding a large percentage of the project