11.484J / 11.144J
Project Appraisal in Developing Countries

Policy makers and analysts around the world are facing difficult policy decisions everyday.  For instance, should informal settlements in a city center be relocated to the urban fringe?  If not, what are the alternatives?  If so, would the relocation project make sense financially, socioeconomically, and politically?  Similarly, should municipalities charge user fees instead of raising the property tax to finance a road improvement project?  What are the financial and socioeconomic benefits as well as costs of these two financing schemes?

In a complex world where political and socioeconomic considerations interact with each other, predicting and measuring benefits and costs of a particular program is not always straightforward.  When programs are evaluated, scholars and practitioners do not use a standardized method.  Evaluators who rely on economic modeling tend to assess projects or programs based largely on financial and economic outcomes, such as changes in investment return, output, and employment.  In contrast, assessors who use political economy and organizational approaches focus on how governance and organizational behaviors affect policy performance.  Both perspectives are necessary for a comprehensive evaluation. 

In this class, we will examine four program evaluation methods, including (1) financial benefit-cost appraisal; (2) economic benefit-cost analysis; (3) political economy assessment; and (4) organizational approaches.  Because the first two methods are more commonly used by practitioners, we will spend the major of our class time discuss them thoroughly.  In addition, the possibility of integrating these four approaches into a coherent evaluation framework will be explored.  The objective is to help students learn how to select or combine evaluation frameworks for measuring and evaluating the financial, socioeconomic, and political effectiveness of urban programs.