Many Bank-financed projects, especially those implementing large and complex contracts continually face high risk of implementation delays, and procurement is the most frequently used scapegoat.
What has gone wrong in those cases?
At the onset, borrowers are requested to prepare a detailed procurement plan for the first 18 months of project implementation, which is carefully reviewed and approved by the Bank before loan negotiations and the projects are then declared "good to go."
But the reality is almost never that rosy.
Selilah stares out over a landscape she has inhabited for 70 years. In the valley below, deep gullies scar the slopes where rains have carried away the soil. Living with three of her four sons, she is struggling to make ends meet in this part of Sidama Zone, Ethiopia, where, she says, there used to be a forest more than 40 years ago.
Now most trees have been felled and water is scarce. Selilah spends two hours a day collecting her two jerrycans (50 liters) from a neighboring kebele (neighborhood), but when that source fails she has to buy water from a vendor at ETB 6 (30 US Cents) per a jerrycan, a huge cut into her income.
In the last 10 years, she says, the rains have changed – they are lighter than before and more infrequent. As a result, production from her meager plot – just 0.25 ha – is declining. After her husband died more than a decade ago, she now only makes ends meet through the daily wage-labor income of her sons. Like many others, Selilah is on the frontline of climate change in a landscape under increasing pressure.
Crises in access to water are making headlines around the world. Among difficult policy pathways to respond, convincing people to change their behavior and reduce their consumption can be one of the hardest.
This post gives us a promising picture from Belén, a small town in Costa Rica. Of Belén’s 21,633 inhabitants, 99.3% have access to water service, but shortages are anticipated by 2030. Our recent study demonstrated that the government could cheaply encourage citizens to save water by enabling them to compare their consumption with that of their peers.
This is a timely lesson, as the United Nations estimates that more than two-thirds of the world’s population will live in water-stressed regions by 2025. Demographic and economic pressures make water management an increasingly urgent policy priority even in water rich areas like Latin America, home to nearly 31% of the world's freshwater resources.
While Costa Rica is relatively well-endowed with water resources, current demand virtually matches production capacity Risks of water deficits and existing shortages are heightened by overdevelopment of areas with limited water supply. To help address these challenges, we partnered with local authorities in the small municipality of Belén to conduct a randomized control trial, capturing an innovative approach that can help conserve water across the country, and in similar contexts around the world.
The project built on insights from the growing field of behavioral economics, which challenges the underlying, intentionally simplified assumption of standard models: that people make rational decisions based on a self-interested cost-benefit analysis. Behavioral economics borrows from other sciences to consider the full scope of social and psychological influences on human decision-making.