often applied by combining expected benefits into a single composite indicator to be compared to project costs.<sup>3</sup> While CBA remained the standard project appraisal method, cost-efficiency approaches were used to appraise 71% of projects proposed between 2000 and 2015, accounting for 47% of proposed investments (Agostini and Razmilic, 2015). Therefore, a spectrum of appraisal techniques has been in use since the 1970s. Over the past few decades, the CBA and MCA methodologies have developed with respect to valuation approaches, applied assumptions, and analytical sophistication, but the overall methodologies and institutional frameworks have remained quite the same.

# Chile’s Project Investment Cycle

By law, except the armed forces (which have their own systems), any public-sector institution wishing to develop an investment project must do so via the SNI. Law pertinent to this process is described in Annex 1. The proponent unit initiates the process by submitting background project information to the SNI. This information is immediately available to the public via an open digital registry called the Banco Integrado de Proyectos (Integrated Project Bank) (BIP). The BIP provides a record of all project proposals in standardized format and tracks project development from initial proposal through ex-post project evaluation.

The proponent agency engages in an iterative process of submissions and approvals with MDS, via the SNI, that involves increasing levels of detail with respect to project appraisal as the project progresses through the system. Upon initial submission to the SNI, a project is assigned a unique identification code within the BIP, which can be used to track the projects’ progress through these stages. Except for some project types (e.g., projects with pre-approved designs), project proponents must submit project preparation information to the SNI, via the BIP platform, at the following stages:

- Profile (concept): the policy problem is described, along with the purpose and context of the project, alternative solutions under consideration, and an assessment of the feasibility and impacts of various alternatives to inform the selection of the most viable alternative;

- Prefeasibility: prefeasibility studies include additional project details, including tentative schedules, budgets, and more extensive information on expected benefits;

- Feasibility: full feasibility studies, including CBA or cost-effectiveness analysis are provided;

- Design: technical architectural, engineering, and construction studies are done, and the timings of investments and detailed budget are specified. Project execution plans are required to be based on specific estimates of the costs of equipment, personnel and supplies, as well as a realistic schedule to estimate the duration of the various activities required; and

- Execution: the project is approved to seek funding. Some projects can apply to the design and execution stages simultaneously when the main sources of risk are known.

Simple projects may not include detailed information at every step, however, and may move directly to project execution from the project profiling stage.

At each stage, MDS assesses the project and approves or rejects its progression to further development, depending on whether it meets the requirements of each stage. It then issues a

> 3 Pilar Contreras, an economist with a long career in public investment in Chile (ODEPLAN) and currently serving as Chief of Investment (DIPRES), reported in an interview that, where CBA was not feasible for health and education projects, analysts used relevant variables common to all projects (e.g., malnutrition, education, infant mortality, etc.) to construct a weighted, combined single indicator reflecting each project’s projected impact.

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