Pre-Investment in Infrastructure in Latin America and the Caribbean: case studies from Chile, Mexico, Peru, and Uruguay

During a public consultation process, conducted by the Inter-American Development Bank (IDB) several participating stakeholders from the public and private sectors indicated a particular need to improve the pre-investment phase of the infrastructure project cycle in LAC.

This report studies why the region is having a problem with the pre-investment phase and what the consequences are. It uses a multiple-case-study design to confirm that the countries’ institutional strategy for pre-investment is failing because: it has not been adapted to address new problems; the strategy does not always consider political acceptability issues; there are undesired interactions between the different institutions participating in the process; and there is a lack of sufficient resources to implement the strategy correctly.

The analysis concludes that a flawed pre-investment process in LAC is probably contributing to cost overruns and delays. Specific institutional recommendations are put forth to mitigate these consequences, including institutionalizing stakeholders’ participation when generating a vision and goals for future infrastructure investments; increasing governmental capacity, particularly in terms of human resources, to develop specific types of pre-investment studies; and institutionalizing the participation of self-described “interested parties” when a project is first accepted, and before project implementation starts.

The paper concludes that there is room for feasible policy improvements in the pre-investment phase in LAC that would enhance infrastructure delivery, boost growth, and promote development in the region.

Download it here:http://publications.iadb.org/handle/11319/6792