Abstract
Experience with irrigation projects in developing countries has shown that a substantial number of projects have not been able to achieve the planned change in the cropping pattern envisaged at appraisal with the implication of a lower ex post economic rate of return.
This paper shows that this may be caused by the questionable assumption of economic certainty built in the benefit-cost analysis of almost all projects. The paper begins with a brief overview of the treatment of economic uncertainty in irrigation projects and then demonstrates how uncertainty may inhibit adoption of high-value crops and result in lower project benefits. Finally, the sources of revenue and cost uncertainty are explicitly illustrated with actual irrigation project data.
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Mergos, G.J. Evaluation of irrigation projects under uncertainty: a symmetric quadratic programming approach. Water Resour Manage 1, 45–56 (1987). https://doi.org/10.1007/BF00421797
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DOI: https://doi.org/10.1007/BF00421797