An International Comparison of the Financial and Economic Rate of Return of Development Projects
Università degli Studi di Milano Economia e Politica Aziendale (DEPA) Working Paper No. 99.06
40 Pages Posted: 22 Oct 2003
There are 2 versions of this paper
An International Comparison of the Financial and Economic Rate of Return of Development Projects
An International Comparison of the Financial and Economic Rate of Return of Development Projects
Date Written: December 1999
Abstract
In this paper we analyse data on the rates of return of investment projects sponsored by three international institutions: the European Union, the European Bank for Reconstruction and Development, the World Bank. The focus of the paper is on the variability of ex-ante economic rate of returns (ERR), of financial rates of return (FRR, available for EU and EBRD) and ex-post or re-estimated economic rates of return (RERR, available for WB only). We propose a framework of analysis of FRR and ERR variations across projects, sectors, financing institutions, of the wedge between ERR and FRR, and of the gap between ERR and RERR. In principle the same framework could be used for comparing rates of return variability of development projects across countries, time of approval or completion, or any other relevant sampling criterion.
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