What makes a good project? Success factors of the World Bank education development projects

Abstract

Despite criticisms on foreign aid, empirical studies show mixed results on aid effectiveness. Since past studies have limitations, as they used an aggregate country-level approach, recent studies began to focus on aid effectiveness in the individual sector. However, there are very few studies examining aid effectiveness in the education sector. Education plays a fundamental role in poverty alleviation and economic growth. Considering that country level approach has limitations in explaining the large variation in success and failures of development projects, this study examined the factors that are associated with education project outcomes implemented by the World Bank.

This study used a mixed method design. Utilizing the World Bank project performance ratings data, I employed linear probability, logit, and ordinal logit models with country and year fixed effects. Interviews with the World Bank staff were also conducted to complement the limitations of the quantitative data. The findings suggested that the role of borrower governments (government effectiveness and commitment) is significant for the success of education projects, which supported Burnside and Dollar’s (1997) theory that aid works in a sound policy environment. Administrative factors such as project cost and duration were not significant, while project design and staff quality were found to be significant for project outcomes. In addition, this study suggested evidence that challenged the validity of the World Bank evaluation ratings data. The findings of this study call for a closer examination of the role of the borrower country’s government in project implementation, and suggests that donors should consider ways to deliver aid effectively and efficiently rather than providing more amount of aid.