Improving the Relevance and Feasibility of Agriculture and Rural Development Operational Designs: How Economic Analyses Can Help

This paper reviews how the Asian Development Bank (ADB) has changed the way it addresses rural problems. The paper states that the performance of agricultural and rural development projects of donors, including ADB, showed mixed results. In response to this mixed performance, ADB's support for agriculture and rural development has addressed the lessons learned and changed its approach in various ways.

The paper states that an assessment of the economic analysis of ADB's operations shows that supporting agriculture and rural development (ARD) in the correct manner can improve project relevance and feasibility. For better project economic analysis, the paper considers a simple conceptual framework on:

• How agriculture and rural areas interact with the economy?
• How use of countrywide growth diagnostics can help to more clearly structure problems and their causes, thus identifying the binding constraints?

The paper considers ways to better understand transformation and transaction costs that help in project design using stakeholder and accountability relationship analysis. Finally, the paper concludes by emphasizing that:

• In any project, overly complex project designs should be avoided even if the sector plan calls for integrated and multi component programs;
• There is need for up-front economic sector work to understand project content and design as it is the basis for project economic analysis.