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Do Nonlending Services Increase Project Success? An Empirical Investigation ABSTRACT The paper utilizes project-level data to explore the relationship between Bank non-lending services ("economic and sector work") and the impact of Bank-supported development projects. We find that (i) higher levels of non-lending services undertaken before project implementation have consistently been associated with better portfolio quality; (ii) there is no contradiction between lending and non-lending services -- by contrast economic and sector work is associated with higher levels of commitments as well as disbursement; (iii) quality at entry and economic benefits of individual projects are enhanced by prior economic and sector work. This supports the hypothesis that analytical background work undertaken before project implementation can improve project performance without decreasing lending volume. Even if -with increasingly competitive financial markets- the Bank's comparative advantage in providing financial resources is likely to deline, this is unlikely to diminish the importance of non-lending services. Back to Research Papers |
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