An Assessment of the Efficacy of Delivering the Annual Development Program in Bangladesh

In order to achieve the goal of reaching a middle-income country status by 2021, Bangladesh requires increased public investment, particularly in order to close severe education, health, and infrastructure gaps. The major proportion of public investment in Bangladesh is channeled through the Annual Development Program (ADP).The government takes many projects every year for implementation in the ADP but a significant proportion of these projects are revised by cost escalation with time overrun as the implementation status remains poor. This study aims to assess and diagnose the ADP execution process against a sound public investment management framework, to identify the barriers responsible for poor implementation of ADP; and to recommend policy options to raise the efficacy of delivering ADP. The assessment of this study, using secondary data, found a weak project screening and appraisal status in the project preparation stage. This is supported by the finding of inadequate independent review of project proposals (e.g. log frames and CBA), as well as the practice of pervasive and increasing allocations to symbolic (small) projects and the substantial growth in the number of unapproved new projects. Although a significant improvement has been achieved in the ADP execution rate in the last two decades particularly for GOB projects (89 per cent), the execution rate of DP assisted projects (72 per cent) lags far behind. Furthermore, the evidence of fourth quarter syndrome suggests significant potential problems regarding the spending quality, and therefore the continued presence of project preparation and implementation weaknesses. In addition, the large share of projects which were declared completed despite not being 100 per cent complete indicates the necessity of reviewing and rationalizing quality of ADP spending. Two key indicators for evaluating the PIM system effectiveness are cost and time over-run. While some the average cost overrun showed some improvement in recent years, the average cost overrun is still on an increasing trend. Weaknesses in project preparation, financing, and execution are likely to have contributed to such inefficiency. Finally, inadequate follow-up on the recommendations generated from external audits, as well as IMED impact evaluations and lack of attention to the operation and maintenance of newly created assets are the two other critically important factors which hamper the efficacy of ADP delivery of Bangladesh. Therefore, the currents study recommends that these weaknesses should be addressed in the short, medium and long term to increase the effectiveness of PIM system in Bangladesh.