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of this modality of public infrastructure provision. Because the average and marginal costs will diverge once assets have been put in place, ex post pressures by governments will effectively expropriate private investors by pushing them to operate assets at marginal cost or even below.
Benchmarking The IMF’s PIMI provides insight into the general quality of appraisal, selection, implementation, and evaluation based on 17 indicators (Dabla-Norris et al. 2011). In effect, it codifies the must-have features of the project cycle proposed by Rajaram et al. (2010) and depicted in figure 3.8. The World Bank’s Public Sector Group recently developed a diagnostic framework for capital spending (World Bank 2011). This framework is designed as a drill-down tool for the 28 performance indicators of the Public Expenditure and Financial Accountability (PEFA) framework directed at capital spending. In addition to indicators for the project cycle, the tool seeks to capture the broader PFM practices surrounding capital spending in an evidence-based fashion. Because of
Figure 3.8 Steps in the Public Investment Management Value Chain detailed project design
project development
1
2
guidance and screening
formal project appraisal
3 appraisal review
prefeasibility feasibility cost-effectiveness cost-benefit analysis regulatory requirements
Source: Rajaram et al. 2010.
4 project selection and budgeting
5 implementation
8
6
7
project adjustment
facility operation
project evaluation
basic completion review evaluation