101 THINGS THAT CAN GO WRONG IN AN ECONOMIC APPRAISAL OF RURAL ROADS IN DEVELOPING COUNTRIES.

The road sector consumes a considerable amount of investment resources in developing countries. With poverty reduction (and especially rural poverty reduction) being an important objective in the policies of developing country governments and development agencies, there is increasing emphasis on investment in rural roads which ranges from improvement of community access tracks and roads at the lowest end of the road network to the improvement of feeder roads that perform wider economic and socioeconomic functions. It is generally agreed that selection of rural roads at the lower end of the network should not be based on economic criteria alone, but more important rural roads requiring higher levels of investment are still largely justified on the basis of economic criteria. Until recently the economic analysis of rural road investments was difficult as the available models could not deal with some important features of the rural roads (e.g. the models lacked facilities to estimate the vehicle operating costs of non-motorised transport modes, predict cost and deterioration characteristics of unsealed roads and estimate benefits due to an improvement of disrupted passability). Recent development of some user friendly road economic appraisal models (e.g. the World Bank's Road Economic Decision (RED) Model and components of HDM-4 ) have made economic appraisal of rural roads easier. Like other road economic appraisal models, these improved economic appraisal tools use functional relationships to calculate costs and benefits based on the inputs from the model users. Evidently, the quality of model output is dependent on the quality of the input data. However, in many cases adequate data are not available and a balance has to be struck to ensure adequate quality of data (and assumptions) with acceptable cost of collecting them and taking account of the available data collection capability. The paper draws on the experience of the authors in the appraisal of rural roads in various developing countries to identify some of the common issues anduproblems faced by practitioners and provides guidance on avoiding some of the pitfalls. It is based on currently available theoretical and empirical evidence and makes reference to other sources for further details. For the covering abstract see ITRD E135448.