(with 0 embodying the “unsatisfactory variables” and 1 being the “satisfactory variables”)<sup>10</sup> and as a 1 to 6 scale (with 1 being Highly Unsatisfactory and 6 Highly Satisfactory) for the multiple ratings.

Given our definition of infrastructure project<sup>11</sup> , 1912 classify for our analysis. They are developed between 1979 to 2008 and represent 136 countries; in Table 2 it is possible to find some summary statistics for the whole dataset, while in Annex A it is possible to find a table reporting the countries in analysis and the number of projects per country. However, among this dataset, only 1710 projects classify for our analysis and present all of the needed ratings.

In this work we use both the binary and the 1-6 ratings. The benefits of the former are several: less sophisticated econometric methodologies, more intuitive results and a simpler analytical framework. However when the interactions between the performance of the project, borrower and supervising agent (bank) are to be studied, we need to disentangle the marginal improvements that performance changes can produce in boosting the project effectiveness; for this reason we employ the 1-6 ratings in order to be as detailed as possible.

Some authors argued that the project, borrower and bank 1-6 ratings may be highly correlated and that it is uncertain to what extent each rating reports independent information. After having read a congruous amount of reports and discussed with evaluators, we feel that this may not be the case as each indicator is separately developed, argued and strongly motivated by facts, interviews and comparisons<sup>12</sup> . For what concerns the correlations, it is indisputable that because we are dealing with ratings, there will be a significant correlation and Table 4 reports the

> 10 The satisfactory variables take value 1 and are Highly Satisfactory, Satisfactory, Moderately Satisfactory; while the unsatisfactory variables take value 0 and are Moderately Unsatisfactory, Unsatisfactory, Highly Unsatisfactory.

> 11 We define as infrastructure those projects which are classified in the following sectors: Agriculture and Rural Development, Energy and Mining, Environment, Global Information/Communications Technology, Transport, Urban Development and Water. We recognize that also projects classified in excluded sectors may include infrastructure investment (excluded sectors are Economic Policy, Education, Financial and Private Sector Development, Financial Sector, Health Nutrition and Population, Poverty Reduction, Public Sector Governance, Social Development and Social Protection), however we needed define infrastructure projects and thus decided to take a sector board classification. It may be argued that Agriculture and Rural Development may not be considered a fully “infrastructure sector”. We recognize that and in our analysis we have also repeated the same exercise excluding this sector, without any significant recorded change. However because in this specific sector, for example, several projects deal with rural electrification, rural transport, irrigation, drains, embankments and other infrastructural improvements within rural development, we strongly believe that this sector should be considered within a broader definition of infrastructure.

> 12 Refer to Annex B for further explanations.

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