Role Of Knowledge And Technology In Development[edit | edit source]
- Please excuse the formatting. It is planned to do a proper conversion soon. --07:44, 25 October 2008 (UTC)
A thesis submitted to the faculty of San Francisco State University In partial fulfillment of The requirements for The degree Master of Arts In International Relations by
Ricardo Valverde San Francisco, California May 2005 Copyright by Ricardo Valverde 2005 CERTIFICATION OF APPROVAL I certify that I have read Role of knowledge and technology in development by Ricardo Valverde, and that in my opinion this work meets the criteria for approving a thesis submitted in partial fulfillment of the requirements for the degree: Master of Arts in International Relations at San Francisco State University Raymond Miller Professor of International Relations James Quesada Professor of Anthropology ROLE OF KNOWLEDGE AND TECHNOLOGY IN DEVELOPMENT Ricardo Valverde San Francisco State University 2004 Abstract
Technology is widely considered one of the major engines of development, both outside and inside the field of development. Development interventions make use of specific types of technology to reach their goals. In many cases several technological solutions are considered, and then one of them is selected. This thesis is concerned with the decision-making process regarding the choice in development interventions: when is the decision made, by whom, and following what criteria?
The study examines first the general planning and evaluation of development projects and second the appraisal of alternative techniques as described by major actors in the field of development. To illustrate the application of the general principles, the thesis reviews a set of reports on actual World Bank projects in the energy sector. The results of the study show that the economic perspective is still by far the most important in the appraisal of development interventions, and that a serious consideration of technological alternatives is often missing.
I certify that the Abstract is a correct representation of the contents of this thesis.
__________________________________________ ________________ Chair, Thesis Committee Date ACKNOWLEDGMENTS I would like to thank Professors Ray Miller and James Quesada for their guidance, especially during the last stages of the completion of this work. Also thanks to Professor Stanley Bailis for a wonderful class and the imprint of interdisciplinarity it left on me.
And thanks to Professor Glenn Fieldman for her encouragement and friendship.
Finally, and most importantly, thank you Natalia for walking with me all this time, and for poking me when it was necessary.
Para Jesús, Ester, y Ariadna. Es su futuro lo que nos estamos jugando.
v TABLE OF CONTENTS LIST OF TABLES ...................................................................................................... viii LIST OF FIGURES ...................................................................................................... ix
1. Introduction[edit | edit source]
2. Technology, Society, And Development[edit | edit source]
Knowledge, technology, power and development
Definition of technology Development and the field of development Main Framework Different perspectives Conclusion
3. Development Interventions[edit | edit source]
What is a development project?
Project Cycle Stakeholder Analysis
4. Choices In Development Interventions: Project[edit | edit source]
Analysis And Appraisal[edit | edit source]
Continuing with our search for answers to the three questions regarding the choice of technology in development interventions –when, by whom, and following what criteria—
we will look into how projects are appraised, what are the tools and techniques used, and the criteria for the selection of one solution among several alternatives.
Planning and managing projects: Objective Oriented Project Planning and the Logical Framework Before looking at the assessment processes and techniques, let us look briefly at the methods commonly used for project planning and management. There are two main approaches that are often used complementarily: Objective Oriented Project Planning
(OOPP) and the Logical Framework.
Objective Oriented Project Planning (OOPP)
The Objective Oriented Project Planning approach was originally conceived by the German aid agency (GTZ), and is often referred to by its German acronym, ZOPP. It helps in the generation, organization and development of ideas for projects by providing a systematic way to work with them.
OOPP is centered on the problem situation and helps with the elucidation of its causes and effects. The method is designed to achieve the definition of the objectives of a project with the involvement of the direct beneficiaries, improving the communication 76 among the actors involved and trying to integrate project planning and implementation.
OOPP includes four major steps explained below.
- Participation Analysis This first step consists basically in what was described in the previous chapter as stakeholder analysis. All the actors –individuals, groups, institutions, etc— involved one way or another in the project are identified, categorized, and their interests, degree of importance and of influence regarding the project analyzed.
The participation analysis allows the identification of potential conflicts among parties involved, and the definition of a strategy of participation for all the stakeholders.
- Problem Analysis The second step includes the identification of the major problems and causal relationship among them –causes and effects. First, there must agreement on what the central problem is, which will be stated as a negative condition. From there a tree will be built with all the ramifications of causes and effects as shown in Figure 7 below,
reproduced from NORAD's handbook for objective-oriented planning (NORAD, 1990).
It is important that the causes and effects tree is built with the maximum consensus from all the stakeholders involved. The visual relationship between the core problem and its causes and effects helps determine specific measures that might be taken to solve the problems identified. 77 Figure 7: Problem tree in Objective Oriented Project Planning
- Objectives Analysis The third step is the generation of objectives from the analysis of the problem tree.
NORAD recommends the transformation of the problem tree into an objectives tree by restating the problems (negative statements) as objectives (positive statements) to be achieved. This process basically transforms the cause-effect relationships into means-
ends relationships, generating a hierarchy of objectives and a desirable future, which will 78 be reached when the problems are solved. It is necessary to review the final objectives tree that has been generated using this process to ensure that in every means-end relationship the stated means are realistically sufficient to reach the end.
- Alternatives Analysis The fourth step in the OOPP is the analysis of alternatives, where all the alternative ways to reach the set of objectives should be considered. This part is very important from our point of view since potential technological alternatives would be taken into account here. This process should be done as early as possible in the project planning process,
definitely during the identification and formulation phases, in order to give all the alternatives a fair chance of being chosen.
According to NORAD's handbook on OOPP, the analysis is done by identifying alternative means-end branches in the objectives tree that can lead to the achievement of the goals. The list of alternative branches should be generated and discussed with the participation of as many stakeholders as possible in order to assess whose interests would be affected and how by going through one path or another.
Once the list of options has been generated, a first filter will eliminate those with undesirable or unachievable objectives, and those with objectives that are pursued by other projects in the area.
In order to select the best alternative, NORAD recommends that the following criteria are always used: 79
- Total cost
- Benefits to priority groups
- Probability of achieving objectives
- Social risks And suggests some other criteria that might be used:
- Technical: Appropriateness, use of local resources, market suitability, etc.
- Financial: Costs, financial sustainability, foreign exchange needs, etc.
- Economic: Economic return, cost effectiveness, etc.
- Institutional: Capacity, capability, technical assistance
- Social/distributional: Distribution of costs and benefits, gender issues, socio-cultural constraints, local involvement and motivation, etc.
- Environmental: Environmental effects, environmental costs vs. benefits (NORAD, 1990).
The assessment of the different alternatives and how well they do vis a vis the above mentioned criteria should lead to the selection of the best project strategy.
The next step defined by NORAD in its handbook for OOPP is the completion of what they call project matrix (PM). This is the name NORAD uses for their particular adaptation of the commonly used Logical Framework, described below.
Logical Framework The Logical Framework was originally designed for the US Agency for International Development (USAID), independently from the OOPP. Nevertheless, its ability to synthesize in a very systematic way the main components of a development project,
avoiding the all too common confusions between means and ends that took place under the OOPP approach, led to its adoption and adaptation by many of the most important 80 bilateral agencies. NORAD, as many others, uses OOPP and the Logical Framework in a complementary fashion (NORAD, 1990).
The Logical Framework is based on a four by four matrix, an example of which is provided by Potts as reproduced in Table 10 (Potts, 2002: 32).
Table 10: Logical Framework Matrix The column on the left contains the main information about the project obtained from the final project tree. The first row –the highest level— is the program or sector goal, what NORAD calls the development objective. The second level is the purpose of 81 the project, or immediate objective, which is the contribution of the project to the overall development objective.
The third level lists the specific outputs generated by the project; these expected results should make possible the achievement of the immediate objective. According to NORAD, the project management should be able to guarantee the outputs of the project,
but the actual achievement of the immediate objective is beyond their direct control.
The fourth level, according to Potts, is that of inputs. It includes resources such as goods and services required for the execution of the project, as well as activities that must be undertaken. NORAD's version includes two different rows, a fourth level for activities and a fifth level for inputs— goods and services.
The second and third columns of the Logical Framework are one of the keys of its philosophy. There must be a way to measure, to obtain feedback, at different stages of its implementation, in order to know whether the project actually works as planned. It must be possible to know if the goals are being reached, the expected outputs generated, and the necessary inputs obtained. This will allow the adjustment of the project as it unfolds and the learning of valuable lessons for future projects.
The second column lists the Objectively verifiable indicators for each one of the four levels, that is, means of measurement of the progress of the project. The indicators must be verifiable, which often means they must be quantifiable. The third column, according to Potts, is the Means of verification. It basically describes the sources that can be used to obtain information about the indicators. 82 NORAD would call the second column direct indicators and the third column indirect indicators.
The fourth column in the matrix includes the assumptions made about the external environment of the project. The assumptions are listed at each one of the four levels; they are necessary for the progress of the project, but are out of the control of the project management. During the identification and formulation phases it is crucial to assess how important and realistic the assumptions are in order to know the chances of project success.
The OOPP and the Logical Framework have been briefly described here with the idea of providing enough background information to continue with our analysis.
Additional information and details can be found in the references cited above from Potts and NORAD. In addition to that, a complete example of the use of OOPP and the Logical Framework in an actual project is provided by Potts in his book Project Planning and Analysis for Development (Potts, 2002: 38-46).
For the main concern of this thesis, the decisions regarding the choice of technology,
the most important part is the alternatives analysis included in the OOPP. By the time the Logical Framework is applied, the main strategy of the project has been defined already,
and therefore decisions regarding alternative paths, including alternative technological solutions, have been made already –although the Logical Framework approach would in theory allow for adjustments of those choices on the fly. 83 The rest of this chapter is dedicated to the techniques used to evaluate the different alternatives, to compare their performances with the project objectives in mind, and to eventually select the best one amongst them.
It is important at this point to notice the difference between the feasibility and desirability of a project. A specific project is feasible if it is possible to do it, and to achieve the stated goals in the process. The answer of a feasibility analysis for a project would normally be either yes –provided the assumptions are true— or no. Some typical things that need to be checked in order to find out whether a project is feasible are: the technical design meets the criteria specified and the workforce and management has the necessary technical skills; the required finance is available and financial commitments can be met; the environmental impact of the project falls within legal limits; from an institutional point of view the implementing agencies have the authority and motivation to perform the roles assigned; from a social point of view the project is acceptable under existing laws and social norms; the project is consistent with government policies and plans (Potts, 2002: 48).
If a project is feasible that means it can be done, and the stated main objectives can be reached. The next question is whether it is desirable or, most likely, whether it is more desirable than other projects (alternative options) that can fulfill the same stated goals.
All said, oftentimes the line between feasibility and desirability is not clearly defined in the analysis of a project. 84 There are several common tools or techniques used to assess the desirability –some of them are used also for feasibility analysis— of development projects. Some of them are standard tools used in project analysis in general, while others are more specific to development projects. Some of them are used in virtually every project, while others are less common.
In the next sections of this chapter we explore these tools and techniques having in mind our interest in decisions regarding the choice of technology.
Cost-benefit analysis Cost benefit analysis (CBA) is a tool commonly used for the analysis of the worthiness of an action –an activity, a program, a project, etc— that requires investment of some kind (financial or otherwise). It analyzes the current and expected future costs of the undertaking and compares them with the expected benefits obtained from it, in order to see if it is worthwhile –benefits should exceed costs. CBA is applied in almost every development intervention, especially when foreign donors are involved.
CBA can be used to analyze the desirability of a project from the point of view of the investor –financial analysis— or from a wider regional or national perspective –economic analysis. The latter is the case in the analysis done for development interventions, where CBA is used to analyze the project from an economic perspective. Nevertheless, as we will see below, some adaptations allow for the inclusion of some social and environmental questions into CBA. 85 CBA typically starts with the calculation of cash flows for every year of the expected project life. Typical benefits for commercial projects come from revenue sales, while typical cost categories include investment costs, cost of operation –fixed and variable
(tied to the output level)—, and working capital –capital tied and necessary for the normal operation of the project, like stocks of raw materials or finished products in a production facility. The difference between benefits and costs for each year of operation is the net benefit.
All those values, since they occur in the future, have to be converted into equivalent present values (time value of money) using a common tool of accounting and financial analysis, the discount factor (based on the concept of compound interest)7. The discount factor has to be estimated for each project, and is typically close to the estimated cost of capital –the interest rate— in the country of implementation –at least for commercial projects.
All the benefits and costs are converted to present values (PV). The difference between present values of benefits and costs is called net present value (NPV), and is 7 Any decent book on project analysis, accounting, or financial management can be consulted for detailed information on concepts like discount rates, Net Present Value (NPV), Internal Rate of Return (IRR), etc. See for example Potts or Heitger Lester E. Heitger, Pekin Ogan, and Serge Matulich, Cost Accounting, 2nd ed. (Cincinnati, Ohio: College Division, South-Western Pub. Co., 1992), David Potts, Project Planning and Analysis for Development (Boulder, CO: Lynne Rienner Pub., 2002).. 86 used to assess if the project is worthwhile –a positive value indicates that discounted benefits exceed discounted costs.
Another typical value used to evaluate the worthiness of a project is the internal rate of return (IRR). It is the rate at which the present value of benefits and costs would be equal (NPV=0). A project would be worthwhile if the IRR is bigger than the estimated discount rate. Other instruments of investment analysis are often used, such as cost-
benefit ratio (CBR) and sensitivity analysis.
The details about the calculation of all these values and its specific use are beyond the scope of this thesis. Nevertheless, it is important to understand that for the CBA analysis to work, all the benefits and costs of a project have to be measurable, and translated into monetary terms. This is normally possible for commercial projects such as for example a textile production facility, but it is not the case in many development interventions.
Some of the problems of using analysis of commercial profitability –CBA calculation of benefits and costs at market prices— in development projects were described in Guidelines for Project Evaluation (1972), an excellent work published by UNIDO (United Nations Industrial Development Organization) –rather old now, but not outdated. These include:
- Dealing with distributional issues: market prices do not adequately represent social welfare 87
- Externalities: negative such as pollution or positive such as workforce training from a production facility
- Consumer "surplus": the difference between what consumers are willing to pay and what they actually pay
- The calculation of the rate of discount – the authors talk about a social rate for development projects that often differs, is smaller, than the commercial rate of discount based on the price of money (Dasgupta, et al., 1972: 22-24).
The authors of UNIDO's guidelines acknowledge that the problems arise from the use of a tool, marginal analysis, which is based on a theory –neoclassical theory— that
"justifies, even deifies, commercial profits as an index of social as well as private welfare" (Dasgupta, et al., 1972: 244). Although they disagree with the relevancy of neoclassical theory in social issues (or at least they did in 1972), they still proposed the use of a modified version of the tool, marginal analysis, in their methodology of social benefit-cost analysis.
In their proposal the values that in the neoclassical model are determined in the market place –prices— should be estimated by the project or national level planner,
therefore correcting market prices to reflect social values –shadow prices—, including the consideration of distributional issues and merit-want questions –such as the preference for alternatives that require less foreign exchange. Different weights would be assigned to income generated by different groups or regions, compensating those that are disadvantaged. Put this way it sounds easy, but the authors themselves recognize that the 88 problem with this approach is to find who will "bell the cat" (Dasgupta, et al., 1972: 247).
According to them, it should be the political leadership that assigns the weights, but it is not likely that they would do it. Therefore, they propose a bottom-up approach where it is project formulators and evaluators who should take the initiative and propose weighted alternatives on a case by case basis to the politicians, and force them to make political decisions having those weighted alternatives in mind, therefore taking responsibility instead of shielding themselves with the argument that decisions are made based only on technical grounds. Nevertheless, this kind of proposal would not have many defenders nowadays in the mainstream, although it would certainly appreciated among supporters of ecological economics such as Herman Daly (Daly, 1996).
More recent works by Potts and White (Potts, 2002; White, 1998) offer several proposals to account for project benefits not realized through sales revenue. Both Potts and White cite the example of an infrastructure project such as road improvement, in which benefits can be calculated through savings in vehicle operating costs (Potts, 2002:
185; White, 1998: 325). Similarly, for an energy project where one source of energy is substituted for another, such as households using electricity as opposed to kerosene for lighting, benefits from the project can be partly obtained from savings in the cost of the old energy source. If there is no energy substitution, but instead an improvement in the electricity grid that leads to increased energy use, the benefit can be calculated through consumer surplus: the value to users of the good or service provided over and above what they would have been willing to pay (Potts, 2002: 179). 89 In all the examples cited above, the project benefits are calculated in monetary terms and therefore, leaving aside the question of the adequacy of the monetary estimation, can be included in the standard cost-benefit analysis. But what happens in cases where it is not possible to assign a monetary value to the benefits?
For example, in water supply and sanitation projects, health projects, and education projects, it is very difficult to assess the benefits in monetary terms. When benefits from a project take the form of health improvements, there are approaches that assign a monetary value through the calculation of loss of earnings from sickness and premature death, or a direct monetary valuation of human life. These methods are controversial and not often used.
For improvements in education the human capital approach is sometimes used
(Potts, 2002: 195). The monetary value of education or training is calculated through an estimation of the difference in earnings between somebody that has received the education or training, and somebody that has not. This approach is very difficult to apply in practice –requires a lot of data over an extended period of time— and is not applicable when the connection between the education or training and the level of earnings is not clear, such as in primary and secondary education projects.
When monetary values for benefits are difficult or impossible to obtain, non-
monetary indicators are suggested. For health benefits it is possible to measure mortality rates and morbidity rates. Common indicators used include years of life gained (YLG),
healthy years of life gained (HYLG), and disability adjusted life years (DALY) (Asian 90 Development Bank, 2000: 45-53). Indicators for general education benefits include number of years spent in school –controversial because it does not measure the outcome,
how much is learned—, and measures of literacy and numeracy.
However, these nonmonetary indicators cannot be used in the standard cost-benefits analysis. A different tool of economic analysis is used with them, called cost-
effectiveness analysis (CEA). CEA can be used when there are two or more alternative ways to achieve a set of goals. In this situation CEA facilitates the comparison of costs and the level of achievement of goals amongst them, leading to the selection of the best option. Costs are calculated as in CBA, but benefits (effectiveness), are derived from the non-monetary indicators.
There are two approaches to CEA. In the first one the tool helps figure out which alternative obtains the most effectiveness –let us say the bigger value of HYLG— for a fixed cost. In the second one the idea is to see which alternative offers the lowest cost to achieve a fixed effectiveness –for example a predetermined value of HYLG. Good explanations and details about CEA can be found in English (English, 1968) and Fabrycky (Fabrycky and Blanchard, 1991).
Recent works on the subject such as Potts' do not offer much new with respect to the old UNIDO guidelines regarding the consideration of distributional issues in the cost-
benefits analysis of projects. Proposals to deal with them include the disagreggation of benefits and costs into relevantly chosen groups of stakeholders –for example unskilled workers, farmers, landowners, etc –and a subsequent political evaluation of the results; or 91 the assignment of different weights to the benefits and costs of different groups, which involves a mostly subjective judgment (Potts, 2002: 272-82).
In summary, the commonly used tool of CBA is very powerful for the economic analysis of development projects, but it is necessary to recognize that it is limited to just that: economic analysis. Although it is able to incorporate to some extent distributional questions, the validity of the distributional analysis obtained that way is often questioned.
Besides, not all social questions involved in a development intervention have to do with distribution.
Social analysis We have seen that cost benefit analysis cannot be expected to do more than an economic assessment. This section discusses how social issues can be brought into judgments about development interventions. Terms such as social analysis or social impact assessment are commonly used by organizations involved in development to refer to the analysis of how people affect, and are affected by, development interventions.
In its Social Analysis Sourcebook (2003) the World Bank defines five "entry points"
that should be used to structure the social analysis work in development interventions:
social diversity and gender; institutions, rules and behavior; stakeholders; participation;
and social risk (World Bank, 2003). This work includes a socio-cultural "mapping" of the population affected by, and affecting, the project: how people are organized into different 92 social groups, based on ethnicity, clan, gender, locality, language, class, or status; what are the public and private institutions, norms, values, behavior, and formal organizations.
Part of that information can be provided by previous studies at the level of the country, the region, or specific sectors –ESW (Economic and Sector Work). The rest of the information is related to the particular development intervention and should be collected specifically for it.
According to the World Bank's manual on participatory tools and techniques the main questions explored in the social analysis of a particular intervention are:
What will be the impact of the project on the various stakeholders, particularly women and vulnerable groups? Are there plans to mitigate adverse impacts?
What social risks might affect project or program success?
What institutional arrangements are needed for participation and project delivery? Are there adequate plans to build the capacity required at the appropriate levels? (Rietbergen- McCracken, et al., 1997: 20)
Figure 8 below has been reproduced from the World Bank's manual and represents the different steps of the social assessment process according to the Bank. The first step of course is to know who is affected by the project and who can affect the project. This is what we call stakeholder analysis and was described in the previous chapter. 93 Figure 8: Social Assessment process according to the World Bank Once the main actors are known social factors must be identified, that is, the relevant social issues that may affect or be affected by the project. At this stage it is necessary to gather information about the affected population, including economic and social data and more qualitative information about social structures, cultures, and stances towards the project.
Some of the important issues to have in mind are: distributional issues, including the effects of the project on the incomes of different groups, and the definition of the groups themselves –considering not only income level but also variables such as gender, social status, and ethnicity; motivations of the different stakeholders and potential conflicts;
consideration of the effects on the most vulnerable people; institutional structure,
including roles, degree of authority and legitimacy, and allegiances to stakeholders. 94 Participation and public involvement are very important for a proper social assessment. There is no way to analyze the social impact of a development intervention without interaction with the affected population. Especially during the data gathering process local involvement is key for obtaining relevant and meaningful information.
The data collected should then be analyzed and used to develop plans for the intervention. According to the Bank's manual, these plans should be developed in consultation with stakeholders, which for the Bank means discussing the findings with the affected people to "ensure that conclusions and recommendations are appropriate"
(Rietbergen-McCracken and Narayan-Parker, 1998: 23). Although the Bank emphasizes the importance of participation all over in its document, it seems to use a very limited interpretation of it, meaning consultation but not empowerment.
Other authors suggest that the information gathered be used in conjunction with potential alternatives that had been identified –recall the alternatives analysis included in OOPP and described earlier in this chapter— and together with stakeholders find the best option and define potential mitigating actions to minimize negative effects (Potts, 2002:
295). This seems to be a more open and flexible approach than the one suggested by the Bank.
Another tool often used is the Participatory Rural Appraisal (PRA), a set of participatory approaches and methods that focus on local knowledge and the participation of local people in the gathering of information, appraisal, analysis and planning for development interventions. It has been used since the 1980s by organizations involved in 95 development, first NGOs and later multilateral and bilateral agencies. PRA techniques are used today in a variety of settings, not only rural, and include group animation and exercises to facilitate information sharing, analysis, and action among stakeholders,
allowing local people, government officials and development professionals to work together. PRA is widely used for social assessment, and it is specifically recommended by the World Bank. More information about PRA can be found in the following references (Chambers, 1992; Rietbergen-McCracken, et al., 1997; Theis, et al., 1991).
The review of social analysis in development interventions presented in this section is mainly focused on World Bank procedures, and it is good as an example of how the major bilateral and multilateral aid agencies deal with the social dimension in development projects.
Although –at least on paper— there is obviously an effort by the World Bank and other major aid agencies to seriously take into consideration the social issues surrounding development interventions, one still has the feeling that while economic analysis is consistently and systematically applied, and used as criteria to decide whether a project is worthwhile undertaking, social analysis seems to be less crucial and often used only to refine projects the worthiness of which has already been decided. In the next chapter we will look at some factual information from World Bank documents and other sources that supports this impression. 96 Environmental analysis One very important aspect to consider in development interventions is the environmental dimension. What are we referring to? Any development intervention, any project for that matter, does not take place in a vacuum. It takes place in a specific
"environment," which broadly understood would include all types of conditions encompassing human activities. In the field of development environment is commonly understood as either the social and natural conditions, or only the natural conditions.
There is an on-going debate as to whether social and natural environments should be considered together or separately. Leaving that discussion aside, since the previous section has already covered the consideration of the social aspects surrounding development interventions, this section will focus on the natural –biophysical—
environment.
There is already a long history of analysis of environmental impact. The first legislation on Environmental Impact Statements came from the US government in the early 70s under the National Environmental Protection Act (NEPA 1979) with the intention of applying it to all major new development and construction projects. During the 1980s many countries formally embraced Environmental Impact Assessment (EIA),
but it was not until the 1990s that many developing countries approved EIA legislation
(World Commission on Dams., 2000: 182).
In the last two decades concerns about global environmental problems such as the depletion of the ozone layer and global warming, as well as human generated disasters 97 such as Bhopal and Chernobyl have contributed to greater public awareness of environmental problems in all countries.
In the field of development, major bilateral and multilateral aid agencies require nowadays some kind of environmental screening in project analysis. The type of environmental assessment varies depending on the type of project. Roughly, there are projects the aim of which is some kind of environmental improvement, projects with goals not related to environmental improvements but with very important environmental effects, and projects with negligible environmental effects.
The first step in the environmental assessment of a development project is often referred to as environmental screening –UNEP calls it preliminary assessment (United Nations Environment Programme, 1988)—, and is intended to give an idea of potential environmental effects of a project. It often consists of a simple checklist of the most important factors such as size, location, and nature of the project. Major aid organizations produce their own checklists8 – for example the British ODA (Overseas Development Administration., 1996), OECD (Winpenny, 1995), or the World Bank (World Bank.
Environment Dept., 1991).
In most countries nowadays EIA legislation specifies the necessary contents of the preliminary screening process, which depends on the nature of the project, its size and its 8 UNDP offers a complete list of references at http://web.archive.org/web/20050218214338/http://www.undp.org:80/seed/guide/handbook/part3.htm. 98 location, with special attention paid to those interventions taking place in areas considered particularly vulnerable or fragile.
As a result of the screening process a project could either obtain the green light, if the effects are considered minimal or negligible, or could be recommended for a full environmental impact assessment (EIA). The possibility for a project to proceed without further EIA is normally articulated in the legislation. In the US, for example, a project may obtain a FONSI (finding of no significant impact) permit, which allows it to proceed without going through a full EIA, and other countries provide equivalent options. Project proponents, of course, prefer a FONSI or equivalent path, which is less expensive and less time consuming.
When a full environmental impact assessment is needed, there are several points that need to be considered.
- What would be the future state of the environment if the proposed project were executed?
- What would be the future state of the environment without the project?
- What would be the future state of the environment if one of the identified alternatives (if there are any) were applied instead of the preferred one?
- Assess the magnitude of the changes resulting from the project, whether they are beneficial, and their importance –this implies some type of measurement.
- Potential mitigation measures in the case of adverse impacts. 99 When a project results in significant environmental impacts the EIA process normally generates a plan for environmental management and monitoring during the implementation and post-project.
In order to proceed with the assessment the identified environmental impacts of the project, both positive and negative, need to be measured and quantified if possible,
including their type, size, range, social and spatial distribution, potential cumulative effects –e.g. acres of agricultural land flooded or level of noise generated by an installation in decibels.
Once measured and maybe quantified, environmental effects need to be valued. After all, negative (and positive) impacts need to be compared with other benefits to be obtained from the project to decide if it is worthwhile undertaking it. Many of the valuation methods assign monetary or economic values (easy to compare) to environmental effects, which is often controversial.
There are several more or less standard procedures in environmental economics,
commonly classified as objective valuation –effect on production, human capital,
replacement costs, preventive expenditure— or subjective preference valuation – hedonic methods, travel cost, contingent valuation. A description of environmental valuation techniques is beyond the scope of this thesis. Good descriptions of these techniques is offered by the World Bank (World Bank. Environment Dept., 1991), Dixon (Dixon, et al., 1994), or Winpenny (Winpenny, 1991). 100 A more radical approach to the full consideration of environmental aspects is provided by supporters of ecological economics such as Herman Daly. Instead of devising ways to incorporate environmental aspects into mainstream economics resulting in the kind of patchwork proposed by environmental economics, ecological economics considers economics as a subset of ecology. Ecology studies the energy transactions of life and the earth, and the human economy is a subset contained in it. Natural capital is considered at the same level with human-made capital, and both are complementary rather than interchangeable –lack of natural capital cannot be substituted by more human-
made capital (Daly, 1996). Most of the ideas of ecological economists did not made their way into mainstream development so far, although many of them were developed and written by Daly while he was working at the Environment Department of the World Bank.
As we have seen so far, requirements and procedures for the environmental assessment of development interventions are quite extensive and specific in the legislation of most countries as well as in the standard procedures of aid agencies. The important question for us is: does the environmental aspect play an important role in the definition and selection of the best alternative to achieve the development goal of a specific development intervention?
A look at the procedures for environmental assessment seems to suggest that they are more likely to be used to generate a binary result (green or red light) to projects that have 101 already been defined and to define mitigation measures to adverse effects, rather than to be part of the decision-making process that defines the best way to achieve the goals.
In this regard, Adger and Chigume indicate that the institutional set-up of environmental analysis has traditionally focused on one project and precludes the consideration of alternative projects –while cost benefit analysis includes this automatically through the decision criteria of IRR, NPV, etc (Adger and Chigume, 1991).
In a similar vein, the report from the World Commission on Dams (2000), after an extensive analysis of dam projects that were executed over several decades, points out that EIA results have no significant influence on the choices made. The report states that EIA is "not well suited to this purpose as it was meant solely for identifying impacts and associated mitigation measures rather than as a tool for including environmental and social considerations in the final project choice and design" (World Commission on Dams., 2000: 183).
In the next chapter we will look at some factual information about actual projects that seems to confirm the relatively minor role of environmental assessment in the definition and selection of the best ways to achieve the goals in development interventions.
Other dimensions. Integration of criteria.
The previous sections have presented some of the procedures commonly used for the assessment of development interventions in the economic –and financial—, social, and 102 environmental aspect. What about the other two aspects presented in our framework introduced in section two: cultural and political?
These two dimensions are not commonly dealt with separately, but as a part of social analysis procedures. The World Bank, for example, points out that the social analysis process "identifies opportunities and constraints arising from the country's socio-cultural,
institutional, historical and political context and, armed with that knowledge, prepares strategies that are more effective in achieving the project's intended social development objectives to help reduce poverty" (World Bank, 2003: 6).
Considering that the analysis of the cultural and political aspects involved in development interventions depends even more than the social analysis on the point of view of insiders, we could take the level of participation by local people in the definition and assessment of the project as an indication of how much those aspects are taken into account. The more local people are involved in the definition and appraisal of the project,
the more likely it is that cultural and political issues enter the equation. The next chapter provides some insight about participation levels by local people in development interventions.
Only in the case of indigenous peoples does the World Bank specifically and separately address the issue of cultural assessment and cultural appropriateness of development projects. In its Social Analysis Sourcebook, the Bank mentions just once the question of cultural compatibility of development interventions, when it says that concern for issues such as indigenous peoples and people displaced through resettlement 103
"underscored the importance of consulting and participating with affected groups, and helped to shift the Bank's social concerns toward the culturally appropriate development
of indigenous peoples" (World Bank, 2003: 79).
As for the political aspect, although politics at all levels, from local to international,
is involved in every one of these interventions –especially so when multilateral or bilateral organizations are present because their main partner is a national government—
political appraisal or analysis is never present explicitly in the appraisal guidelines. As we will se in the next chapter, the most explicit references to political aspects found in appraisal documents are quite aseptic descriptions of institutional arrangements.
Integration of criteria Let us consider now how the different criteria considered in the appraisal of development interventions can be integrated in order to make decisions as to whether the project should be undertaken or not, or what would be the best alternative to achieve the goals. Cost benefit analysis provides normally a numeric value that can be used in the decision-making process, but other assessments produce results that are not so simple.
Oftentimes the different analyses are made separately and then a trade-off is found through judgment or negotiation between specialists from different disciplines. Working this way means that there is no communication between people from diverse disciplines during the assessment process, the relative importance of the assessments from different perspectives is not clear, and therefore the final decision might be arbitrary. 104 Some authors (Pelt, 1993; Petry, 1990; Potts, 2002) suggest a more systematic way to take into account the assessments from the different disciplines, what they call Multi Criteria Analysis (MCA).
In MCA a set of different criteria to assess a project would be defined based on its stated objectives, and any foreseeable impacts –even if they are not goals of the project.
All the goals/impacts can be entered into a matrix, where for each one of them it is indicated if the impact is likely to be positive or negative, who are the stakeholders affected, whether each particular goal/impact is taken into account in the standard economic CBA, and the criteria to be used to assess it –specially for those not included in CBA. For each goal/impact it is necessary to define a scale. Those included in CBA already have a monetary value assigned, and for the rest a quantitative, if possible, or qualitative value needs to be assigned. Finally, weights are to be assigned to each criterium in order to come up with a final value representing the worthiness of the project. Ideally a value would be obtained for each one of the potential project alternatives, as well as for the "without the project" option.
Although more systematic, MCA as proposed by these authors still does not solve the big issues: the definition of a scale for non-quantitative values, and the assignment of weights, a very subjective process. 105
