Macro and micro determinants of project performance

Abstract

One year from the target date of the achievement of the Millennium Development Goals (MDGs), the result in Africa is only a work in progress. Africa has made progress towards some of the MDGs but needs to draw lessons and improve performance post 2015. This study investigates the development effectiveness of the African Development Bank Group-financed projects using 229 concluded projects between 2004 and 2012 to assess the major determinants of project performance. The study finds that the Bank Group has on average a high level of development effectiveness. Using econometric analysis the study found that country-level variables’ interactions with project-level variables explain a substantial share of the variationsin project performance. In particular, it affirmed that country policies and institutions and country capacity in general is positively correlated with project performance whilst parallel project implementation units were not correlated. At the micro level, the age of a project, the quality of project design and the choice of programing instrument were also important determinants of project success. The findings of this study therefore will inform the policy formulation processes in the post 2015 agenda.