Beyond Project Delivery: How the Global South Can Get More from Development Finance

1. Development Finance Must Serve a Wider Development Strategy

International development finance has an important role in enabling countries of the Global South to build infrastructure, expand public services, and address development needs that might otherwise remain unmet. Financing from intergovernmental development finance institutions and other international sources can help governments undertake capital-intensive projects, access specialised expertise, and distribute the costs of major investments over time. For many countries, such financing is not merely an option but a necessary component of their development strategies.

However, the successful delivery of an infrastructure project and the achievement of broader developmental objectives are not necessarily the same thing.

A project may be completed within its contractual parameters, its infrastructure commissioned, and its immediate technical requirements fulfilled. Yet the wider economic, social, and environmental benefits may remain limited, while opportunities to strengthen the country's own engineering, manufacturing, consulting, and technical capabilities may go unrealised.

Consider a wastewater-treatment project. Its immediate objectives might include constructing a treatment plant, installing the necessary equipment, and achieving specified effluent-quality standards. These are important and measurable deliverables. But the project's wider developmental significance also depends on whether it contributes to cleaner water bodies, better sanitation, improved public health, and more effective urban environmental management. Its performance may depend on factors beyond the plant itself, including the coverage of the wastewater collection network, the reliability of electricity supplies, the competence of operating personnel, and the capacity of the responsible utility to maintain the system.

There is another dimension. Does the project help domestic engineering firms gain experience? Does it create opportunities for local equipment manufacturers and specialist suppliers? Do domestic consultancies and universities acquire knowledge that can inform subsequent projects? Does the public authority retain the technical information and institutional experience necessary to make better decisions in the future?

These questions do not diminish the importance of project delivery. They place it within a broader conception of development.

For governments, the central task is therefore to connect development finance with national development priorities extending beyond individual projects. This does not require every project to establish an entire industrial ecosystem or achieve every conceivable social objective. Rather, it requires governments to identify the outcomes that matter for each intervention and to consider, from the outset, how the investment can contribute to both immediate public needs and longer-term developmental capabilities.

Development finance should be evaluated not only by the infrastructure it helps deliver, but also by the contribution that infrastructure makes to development and, where practicable, by the capabilities the country gains through the process.

2. Look Beyond Project Delivery to Domestic Capability Formation

Infrastructure projects are also potential sites of capability formation. Their planning, design, procurement, construction, commissioning, operation, and maintenance generate demand for technical knowledge, specialised equipment, engineering services, and skilled personnel. How these activities are organised can influence whether domestic enterprises and institutions develop stronger capabilities or remain peripheral to the process.

The contractual architecture matters. A large integrated engineering, procurement, and construction (EPC) contract, for example, can offer advantages in coordination, accountability, and delivery. A turnkey arrangement may be entirely appropriate where technical complexity, implementation risks, or time constraints make it the most effective option. Foreign contractors can bring experience and expertise that domestic firms do not yet possess.

The concern is not that such arrangements are inherently undesirable. It is that their immediate advantages should be considered alongside their implications for domestic capability formation.

When a single contractor assumes responsibility for most major project activities, opportunities for domestic firms to undertake substantive technical work may be limited unless these opportunities are deliberately identified and incorporated into the project structure. Domestic businesses might participate as suppliers or subcontractors without acquiring the engineering responsibility, design experience, quality-assurance expertise, or operational knowledge required to undertake more complex assignments independently.

Governments can address this possibility without compromising technical standards or value for money. During project preparation, they can examine the domestic industrial and technical landscape, identify capabilities that already exist, and determine which additional capabilities could realistically be developed. Procurement and contract packaging can then be designed, where appropriate, to enable qualified domestic firms to compete for suitable components of the work. Technical partnerships can provide further opportunities, provided domestic participants undertake meaningful responsibilities rather than merely supplying labour or performing peripheral tasks.

The wastewater-treatment example illustrates the range of possibilities. A project may require pumps, motors, membranes, pipes, electrical systems, sensors, instrumentation, laboratory testing, engineering design, construction supervision, and specialised maintenance services. Not every component will necessarily be available domestically, and local production will not always be commercially viable. Nevertheless, an assessment of existing capabilities and plausible opportunities for their development can help governments distinguish between activities that require external expertise and those in which domestic enterprises could participate or progressively assume greater responsibility.

Capability formation also extends beyond firms. Engineers, technicians, project managers, researchers, and public officials can acquire practical experience through involvement in projects. Domestic consultancies can strengthen their technical expertise by undertaking substantive assignments. Universities can study project performance and longer-term outcomes, while public agencies can build the institutional knowledge needed to plan and manage subsequent investments.

These possibilities are particularly important when governments consider multiple projects across a sector or region. An individual wastewater-treatment plant may offer limited opportunities to develop certain specialised industries. A sustained programme of investments in water supply, wastewater treatment, industrial water management, and environmental infrastructure, however, could create more predictable demand for equipment, engineering services, technical personnel, and research.

The strategic question is whether a country's development investments can reinforce one another, gradually expanding its capacity to undertake increasingly complex work.

This is ultimately a responsibility of national governments. International development finance institutions can support agreed objectives, provide expertise, and participate in suitable project arrangements. But governments must establish the wider developmental priorities, understand their domestic capabilities, and decide how individual investments should contribute to them.

The objective is not to maximise domestic participation regardless of cost, competence, or technical suitability. It is to identify where domestic capability formation is feasible and valuable, and to ensure that these opportunities are considered alongside the immediate requirements of infrastructure delivery.

3. Three Risks Governments Should Anticipate

Connecting development finance with domestic capability formation requires governments to recognise several risks that can arise from the way infrastructure projects are financed, contracted, and implemented. These risks are neither inevitable consequences of international development finance nor evidence that foreign participation is inherently undesirable. They are possibilities that governments should examine when designing projects and evaluating their wider developmental implications.

3.1. Infrastructure Delivery Without Proportionate Domestic Capability Formation

The first risk is that infrastructure may be delivered successfully without a corresponding strengthening of domestic capabilities.

Large infrastructure projects often require extensive technical expertise, specialised equipment, and coordination across multiple activities. Where domestic firms lack some of the required capabilities, governments may reasonably engage experienced foreign contractors, equipment suppliers, and consultants. However, if project responsibilities remain concentrated within these external organisations, domestic enterprises may have few opportunities to progress beyond supplying basic materials, providing labour, or undertaking relatively simple subcontracted activities.

A wastewater-treatment plant, for example, might be constructed using imported equipment, designs developed by an international engineering firm, and installation services provided by a specialised contractor. The facility could meet its contractual performance requirements. Nevertheless, domestic firms might emerge from the project without significantly improving their ability to manufacture relevant equipment, design treatment systems, undertake complex engineering assignments, or provide specialised maintenance services.

The distinction is between participating in a project and developing capabilities through participation. Domestic firms may generate revenue and employment without necessarily acquiring the technical knowledge, organisational routines, or quality-assurance systems required to compete for more sophisticated work.

Governments should therefore examine not simply whether domestic firms participated, but also the nature of their responsibilities and whether their capabilities changed as a result. Such improvements cannot be assumed: they depend on the work undertaken, the opportunities available, and the firms' own investments and learning processes.

3.2. Capacity Displacement Across the Domestic Economy

A second risk concerns the allocation of scarce technical and managerial resources across a country's development programmes.

In countries where experienced engineers, project managers, specialist contractors, and technical consultants are in short supply, a large development-financed project may offer attractive remuneration, substantial contracts, and relatively predictable payment arrangements. It could consequently draw personnel and suppliers away from other infrastructure projects, including those financed through national or state budgets.

This possibility deserves particular attention where governments are pursuing multiple infrastructure programmes simultaneously. A project may secure the resources required for its own delivery while making implementation more difficult elsewhere. The result could be a redistribution of scarce capacity rather than a proportionate expansion of the country's overall ability to deliver infrastructure.

For instance, a major wastewater-treatment programme might attract experienced project managers and electrical engineers from smaller municipal water projects. If the country cannot readily replace those personnel, delays or quality problems could emerge in the other projects.

This is a plausible mechanism, not a claim that development-financed projects invariably displace domestic capacity. Large projects can also create employment, attract investment, encourage training, and expand the supply of skilled personnel. The net effect depends on labour-market conditions, the availability of alternative suppliers, the timing of investments, and the extent to which project demand stimulates additional capacity.

Governments should nevertheless assess major projects within the context of their wider investment pipeline. Workforce availability, contractor capacity, procurement schedules, and competing project requirements should inform implementation planning. Where necessary, governments can coordinate project schedules, strengthen training pipelines, and encourage measures that expand the domestic supply of technical personnel and services.

3.3. The Loss of Project Knowledge and Institutional Learning

A third risk is that valuable knowledge generated during a project may not remain accessible to the country that financed, hosted, or ultimately operates the resulting infrastructure.

Infrastructure projects generate substantial technical and institutional knowledge. Surveys, feasibility studies, design calculations, equipment specifications, procurement decisions, construction records, commissioning results, and operational data can all inform future investments. They can reveal which technologies work under local conditions, which assumptions prove unreliable, what causes delays, and how maintenance requirements affect long-term costs.

Yet this information may remain dispersed across contractors, consultants, implementing agencies, and equipment suppliers. Some records may be difficult to interpret or reuse, while others may be held in proprietary systems. Even when documents are formally handed over, public authorities may lack the staff or institutional arrangements needed to analyse them.

The consequences extend beyond the immediate project. If the next implementing agency cannot readily access the previous project's technical lessons, it may repeat investigations, reproduce avoidable mistakes, or select unsuitable technologies. Domestic firms and research institutions may also lose opportunities to study project performance and build expertise.

The wastewater-treatment example is instructive. Records of membrane performance, electricity consumption, equipment failures, maintenance interventions, and effluent quality could help governments determine which treatment technologies are most suitable for comparable locations. Without organised records and the capacity to interpret them, such experience may remain confined to individual contractors or operating teams.

Governments should therefore treat project knowledge as an institutional asset. Appropriate arrangements for data access, documentation, transfer, storage, and subsequent use should be considered from project preparation onwards. These arrangements must respect legitimate commercial confidentiality, intellectual property, privacy, and cybersecurity requirements. The objective is not unrestricted access to every proprietary document, but the retention of sufficient usable information to support public accountability, operational continuity, and future decision-making.

Taken together, these risks point towards a broader principle: a project should be assessed not only by what it delivers, but also by how it affects the country's capacity to deliver, manage, and improve infrastructure in the future.

4. What Governments Should Seek When Structuring Development-Financed Projects

4.1. Assess Domestic Capabilities Before Finalising Project Arrangements

Governments can begin by making domestic capability assessment a practical component of project preparation. Before finalising procurement arrangements, they should examine which domestic firms, manufacturers, consultancies, technical institutions, and skilled personnel could contribute to the project, and where genuine capability gaps exist.

This assessment should distinguish between capabilities already available, capabilities that could be developed within the project's timeframe, and specialised requirements for which external expertise is likely to remain necessary. It should also consider whether the project forms part of a longer investment programme that could sustain domestic capabilities beyond a single contract.

Such an exercise need not become an elaborate bureaucratic requirement for every small intervention. Its depth should be proportionate to project size, technical complexity, and the potential for domestic capability development. For a major wastewater-treatment programme, however, mapping relevant equipment manufacturers, engineering firms, laboratories, and maintenance providers could reveal opportunities that would otherwise be overlooked.

The resulting assessment should inform contract design, procurement strategy, training provisions, and arrangements for retaining project knowledge. It should not predetermine the award of contracts to domestic firms regardless of competence. Transparent competition, technical suitability, safety, quality, and value for money must remain central considerations.

4.2. Create Meaningful Opportunities for Domestic Enterprises

Where domestic firms possess the necessary capabilities, or could realistically develop them, governments should consider procurement arrangements that enable them to compete for appropriate portions of project work. This might involve packaging certain assignments separately, establishing technically justified qualification requirements, or encouraging substantive partnerships between domestic and foreign firms.

The emphasis should be on meaningful responsibility rather than nominal participation. A domestic engineering firm that undertakes design calculations, equipment integration, testing, or commissioning may acquire different capabilities from one that merely supplies materials or provides labour. Similarly, a manufacturer that develops and validates a component for a project may gain experience that can support future product improvements and market expansion.

These arrangements must be designed carefully. Excessive fragmentation can create coordination problems, while unrealistic localisation requirements can increase costs or compromise quality. Some technologies may not be available domestically, and attempting to manufacture every component locally may be economically unjustified.

The aim is therefore to identify credible opportunities for domestic participation and capability development without imposing a uniform model on every project.

4.3. Build Technical Experience Through Projects and Talent Circulation

Infrastructure projects can serve as practical learning environments for engineers, technicians, project managers, and other technical personnel. While formal education provides essential foundations, many specialised competencies develop through exposure to real projects: interpreting technical specifications, responding to unexpected site conditions, diagnosing equipment failures, coordinating different engineering disciplines, and understanding the relationship between design decisions and operational performance.

Governments should therefore explore opportunities to integrate structured technical learning into suitable development-financed projects. Depending on the project's scale and requirements, contractors, equipment suppliers, engineering firms, and public agencies could provide supervised internships, apprenticeships, graduate traineeships, and early-career placements. These arrangements should have defined learning objectives, appropriate supervision, and opportunities to participate in substantive technical activities.

A wastewater-treatment project, for example, could expose trainees to equipment installation, instrumentation, process monitoring, commissioning, laboratory testing, and maintenance planning. Their experience would be more valuable if it extended beyond observation to appropriately supervised participation in technical work.

Such arrangements must not compromise safety, quality, or project delivery. Nor should trainees be treated as a source of inexpensive labour. Participation should be appropriately compensated, and the training should provide genuine, transferable competencies.

The wider objective is talent circulation: enabling practical experience acquired through one project to spread across the domestic economy. Engineers and technicians who gain experience with an international contractor might subsequently work for domestic engineering firms, equipment manufacturers, utilities, consultancies, or public agencies. Those who remain with the original contractor could also contribute to the development of its domestic operations.

This circulation matters because a country's infrastructure capabilities do not reside exclusively within individual companies. They are distributed across the workforce, institutions, and networks through which technical knowledge moves. A project can therefore contribute to wider capability formation even when the contractor responsible for delivery is foreign-owned.

Governments should also consider the cumulative effects of training across multiple projects. Rather than treating every placement as an isolated contractual activity, they could identify recurring skill requirements across infrastructure programmes and coordinate training with domestic universities, technical institutions, and employers. The resulting approach would connect project implementation with longer-term workforce development.

4.4. Open Short-Horizon Knowledge Work to Qualified Domestic Consultancies

Infrastructure projects generate substantial knowledge-intensive work beyond construction itself. Before implementation, this includes feasibility studies, technical investigations, environmental assessments, demand forecasting, design support, and preparation of procurement documentation. During and after implementation, it includes construction supervision, project-management support, quality assurance, commissioning, performance assessments, and technical audits.

These assignments can help governments make better investment decisions while providing domestic consultancy firms with opportunities to develop expertise. Yet the availability of such opportunities should not be taken for granted. Governments need to understand how consultancy assignments are structured, who undertakes them, and whether qualified domestic firms can compete for substantive technical responsibilities.

The objective is not to exclude international consultancy firms. Specialised expertise may be unavailable domestically, and external firms can contribute valuable experience. Instead, governments should identify assignments that domestic consultancy firms can undertake independently, as well as those in which they could work alongside international specialists and progressively assume more complex responsibilities.

Suitable measures could include transparent procurement, appropriately sized assignments, technically justified qualification criteria, and partnerships that provide domestic firms with genuine analytical or engineering responsibilities. Merely appointing a domestic firm as a nominal partner would offer limited developmental value if the substantive work remained elsewhere.

Consider a wastewater-treatment project requiring an assessment of local wastewater characteristics, an evaluation of alternative technologies, and a review of operating costs. Where domestic consultancy firms possess the necessary expertise, they could undertake some of these studies. Other assignments might require specialist laboratories or international technical knowledge. A carefully structured approach would distinguish between these requirements instead of assuming that all consultancy works must be performed by either domestic or foreign firms.

Over time, meaningful participation in such assignments could help domestic consultancy firms develop stronger technical teams, improve their methodologies, establish professional track records, and compete for more complex work. Governments would benefit from a broader domestic knowledge base that could support future projects.

4.5. Make Project Data and Knowledge Usable for Future Decisions

Governments should establish arrangements to retain and use project information throughout the infrastructure lifecycle. This requires more than collecting final reports at project closure.

Relevant information can include the results of initial investigations, design assumptions and revisions, equipment specifications, procurement decisions, construction progress, technical problems, corrective actions, commissioning results, maintenance records, operating performance, and lifecycle costs. Information on training activities and the participation of domestic firms may also help governments assess whether intended capability-development objectives were achieved.

The information should be organised in formats that public agencies can retrieve, interpret, and reuse. Appropriate safeguards must protect commercially confidential information, intellectual property, personal data, and cybersecurity. Responsibilities for maintaining records and transferring them between contractors, implementing agencies, and operators should be established in advance.

However, documentation alone does not guarantee institutional learning. Public authorities need personnel with the technical and analytical skills required to interpret project records, identify recurring problems, and apply lessons to future investments. Domestic consultancies and universities can assist in this process by analysing data, comparing projects, and evaluating performance.

This creates a useful relationship between two forms of capability development. Talent circulation transfers practical knowledge through people, while systematic project documentation preserves institutional knowledge across projects and generations of personnel. Together, they can help governments avoid treating each new infrastructure investment as an entirely separate undertaking.

5. Universities as Long-Horizon Development Institutions

5.1. Distinguish Short-Horizon Consultancy from Long-Horizon Research

Domestic capability formation and effective project delivery require different forms of knowledge. Some knowledge needs can be addressed through clearly defined consultancy assignments. Others require sustained research extending beyond the construction and initial operation of an individual project.

This distinction matters when governments decide which institutions should undertake different kinds of work.

Consultancy firms are often well suited to short-horizon assignments with specified deliverables, deadlines, and technical requirements. Universities, particularly credible national and regional universities with relevant expertise, can contribute to these assignments where their capabilities and institutional arrangements are appropriate. But universities have an additional potential role: investigating the longer-term consequences of infrastructure investments and examining how these investments affect the wider development process.

Unlike project contractors or temporary consultancy teams, universities are permanent institutions embedded within a country's intellectual and social landscape. Their continued presence can support longitudinal research, the accumulation of evidence, and comparisons across projects and regions. Regional universities may be especially well placed to understand local environmental conditions, household circumstances, institutional arrangements, and patterns of economic activity. National universities can synthesise findings across regions and sectors.

This does not mean that universities are automatically better suited to evaluation. Relevant expertise, methodological rigour, research capacity, credibility, and independence must determine their selection. Nor should universities be expected to replace specialist consultancies or take responsibility for project-management functions for which they are not equipped.

Their distinctive contribution lies in research that requires continuity, interdisciplinary analysis, and a perspective extending beyond immediate contractual deliverables.

5.2. Evaluate Developmental Outcomes Beyond Project Completion

A university-based research programme could examine whether infrastructure investments produce the intended economic, social, and environmental benefits over time. For a wastewater-treatment project, the research might investigate changes in water quality, pollution levels, public health indicators, household expenditure, neighbourhood conditions, and local economic activity.

The questions would extend beyond whether the treatment plant operates according to its technical specifications. Researchers could investigate whether wastewater collection has expanded sufficiently to bring households and businesses within its service area, whether treatment performance remains reliable, and whether the responsible utility possesses the operational and financial capacity to sustain the facility.

They could also examine how benefits and costs are distributed. Are certain neighbourhoods underserved? Do households experience improvements in sanitation or reductions in expenditure associated with polluted water? Have local businesses benefited from better environmental conditions? Are operating costs placing pressure on the utility's finances or on the affordability of services?

Such research would help governments understand the difference between infrastructure outputs, service outcomes, and longer-term developmental impacts.

A completed plant is an output. Reliable treatment and improved sanitation are service outcomes. Changes in environmental conditions, public health, household welfare, or economic activity are potential longer-term impacts. These categories are related, but they are not interchangeable.

Credible evaluation also requires methodological care. If public health indicators improve after a treatment plant begins operating, the improvement cannot automatically be attributed to the project. Changes in healthcare access, sanitation practices, population characteristics, economic conditions, and other public interventions may also contribute. Baseline data, follow-up studies, and comparison methods where feasible can help researchers distinguish the project's contribution from other influences.

The scale of evaluation should be proportionate to the project's size, cost, risks, and plausible wider effects. Not every infrastructure intervention requires a large, long-term research programme. But for substantial investments with significant environmental, social, or economic implications, governments should consider whether sustained independent evaluation would provide valuable evidence for future decisions.

5.3. Evaluate Whether Domestic Enterprises Gain Lasting Capabilities

Universities could also investigate an important question that conventional project-completion assessments may not answer: Do domestic enterprises emerge from infrastructure projects with stronger capabilities, or do they simply complete a temporary assignment?

Where domestic manufacturers, engineering firms, suppliers, and consultancies participate in a project, researchers could examine changes in their capabilities before, during, and after that participation. Relevant dimensions might include product quality, engineering and design expertise, production processes, testing and certification, quality assurance, maintenance services, workforce skills, and the ability to compete for more complex contracts.

For instance, a domestic equipment manufacturer supplying components to a wastewater-treatment project might subsequently improve its manufacturing processes or develop products suited to more demanding operating conditions. An engineering consultancy might gain experience in commissioning or process optimisation. A maintenance provider might develop the technical expertise required to service more sophisticated equipment.

These are possibilities to investigate, not outcomes to presume.

A firm's revenue may increase temporarily because it has secured a contract without developing capabilities that endure after the contract ends. Conversely, a firm might acquire useful technical expertise without immediately winning additional business. Evaluation should therefore distinguish between temporary commercial benefits and lasting improvements in productive, technical, and organisational capabilities.

Researchers could use baseline assessments, follow-up interviews, technical records, product evaluations, and comparisons with firms that did not participate, where feasible. They should also consider other influences, including firms' own investments, changes in market demand, and support received through unrelated programmes.

The resulting evidence could help governments determine which procurement arrangements, technical partnerships, training measures, and forms of project participation are most likely to strengthen domestic enterprises. It could also reveal where firms face persistent barriers, such as inadequate testing facilities, limited access to finance, or difficulty obtaining certification.

In this way, universities could help turn domestic capability formation from a general aspiration into a question that can be examined, measured, and incorporated into subsequent infrastructure policy.

6. From Project Evaluation to National Infrastructure Strategy

6.1. Use Accumulated Evidence to Identify Future Infrastructure Needs

If universities and other qualified research institutions undertake sustained evaluations of infrastructure projects, their work can contribute to something more consequential than assessments of individual investments: a stronger evidence base for national infrastructure planning.

Governments frequently face difficult choices about where to direct limited financial and administrative resources. Should they construct new infrastructure, expand existing facilities, rehabilitate ageing assets, complete missing connections, or improve the operation and maintenance of infrastructure already in place? These decisions require more than estimates of construction costs or assessments of immediate demand. They require an understanding of how existing infrastructure performs, which populations and economic activities it serves, and where deficiencies continue to constrain development.

Long-horizon research can help answer these questions. Studies of wastewater-treatment projects, for example, could reveal whether treatment capacity is sufficient but underutilised because sewerage networks remain incomplete. They could identify locations where existing facilities require rehabilitation, where operating practices undermine performance, or where additional treatment capacity is genuinely necessary. Research might also show that the most pressing requirement is not another treatment plant but investment in wastewater collection, pumping infrastructure, electricity reliability, or the technical capacity of the responsible utility.

These distinctions have important financial implications. Constructing additional treatment capacity when existing facilities are underutilised may produce lower developmental returns than completing the collection network or improving operations. Conversely, where demand exceeds available capacity and existing facilities are functioning effectively, additional infrastructure may be justified.

Universities can contribute by combining technical assessments with environmental research, household surveys, economic analysis, and institutional studies. Their findings can help governments distinguish between infrastructure shortages, operational deficiencies, and institutional weaknesses.

The same approach can extend across sectors. Research on water supply, electricity, transport, industrial infrastructure, and public services can help governments identify recurring bottlenecks and understand how investments in one sector affect outcomes in another.

National universities could synthesise evidence across regions, while regional universities could investigate local conditions and implementation challenges. Together, these institutions could contribute to a cumulative body of knowledge that informs infrastructure priorities beyond individual projects and budget cycles.

6.2. Connect Infrastructure Planning with Financing and Funding Decisions

Identifying an infrastructure need is only the beginning. Governments must also determine how the proposed intervention should be funded and financed, taking account of its public benefits, revenue potential, affordability, fiscal implications, and risks.

These considerations are related but distinct. Funding refers to the resources ultimately used to meet project costs, such as tax revenues, user charges, grants, or other public and private revenues. Financing provides resources upfront and establishes how the associated obligations will be met over time. A project may therefore require financing even when its ultimate funding source is public revenue.

Universities and other research institutions can help governments analyse these choices. Their work could examine the likely economic and social benefits of a proposed investment, the extent to which users can reasonably contribute towards its costs, the long-term operating expenditure it will generate, and the fiscal consequences of alternative arrangements.

Depending on the project, possible options may include national or state budget allocations, grants, concessional loans, domestic financial institutions, development finance, or combinations of these. The appropriate arrangement will depend on the nature of the infrastructure, its expected benefits, its revenue-generating potential, and the capacity of the responsible institution to manage the resulting obligations.

A project with substantial public-health and environmental benefits may justify significant public funding even when it cannot generate sufficient revenue to cover its costs. A revenue-generating infrastructure project may offer different financing possibilities, although its commercial potential must be assessed realistically rather than assumed.

Research institutions should provide evidence and analysis, not substitute themselves for governments in making public policy or financing decisions. Their contribution is to help decision-makers understand the likely consequences of different options and the trade-offs involved.

This also creates a practical connection between long-horizon evaluation and future investment. Evidence about an existing project's performance can inform the design of subsequent projects, while research into unmet needs can help governments determine where new investments are justified. Financing decisions can then be considered in relation to a more comprehensive understanding of infrastructure requirements and developmental priorities.

6.3. Build Continuity Across Projects, Regions, and Investment Cycles

For this approach to work, research cannot depend entirely on short-term assignments commissioned after a project has been completed. Governments should consider establishing research arrangements during project preparation, with appropriate baseline studies, funding provisions, access to relevant information, and plans for follow-up evaluation.

Such arrangements need not be identical across all projects. A major infrastructure programme with substantial environmental or economic consequences may justify a multi-year research programme, while a smaller intervention may require a more limited evaluation. The objective is to match the scale of research to the importance of the questions being investigated.

Continuity also requires institutional independence. Universities must be able to report unfavourable findings, including evidence that a project has underperformed, that its expected benefits have not materialised, or that an alternative investment would have been more appropriate. Evaluation loses much of its value if researchers are expected to validate decisions already taken.

Governments can strengthen continuity by enabling research institutions to compare findings across projects and share relevant lessons with public agencies, domestic enterprises, and technical institutions. Over time, this could help identify which technologies perform reliably under particular conditions, which implementation arrangements produce better results, and which forms of domestic participation contribute most effectively to capability development.

The broader objective is to connect project-level experience with national development strategy. Rather than repeatedly making investment decisions through isolated project appraisals, governments could draw on accumulated evidence to improve priorities, procurement arrangements, technology choices, operating models, and financing decisions.

7. Conclusion: Development Finance as a Means of Building Development Capacity

International development finance should be understood as a means of enabling development, not as an end in itself. Its value lies in the infrastructure it helps countries deliver, the public services that infrastructure supports, and the economic, social, and environmental benefits that follow.

But governments should also consider whether their infrastructure investments strengthen the capacity to undertake future development. This does not mean that every project must create new industries, train large numbers of personnel, or support an extensive research programme. Nor does it require governments to reject integrated contracts, foreign expertise, or international suppliers. These can all be appropriate components of successful projects.

The task is to identify opportunities that are technically feasible, economically justified, and relevant to national priorities. Domestic firms may acquire more sophisticated responsibilities; technical personnel may gain practical experience; consultancies may strengthen their capabilities; universities may generate evidence about long-term outcomes; and public agencies may retain knowledge that improves future decisions.

These opportunities are unlikely to emerge automatically from the availability of finance. They require governments to connect individual investments with wider strategies for industrial development, technical education, institutional learning, and infrastructure planning.

Development finance institutions can contribute through their project arrangements and technical support. However, national governments must retain responsibility for establishing developmental priorities, assessing domestic capabilities, coordinating investments, and deciding how the lessons from completed projects should shape future policy.

Ultimately, the relevant question is not simply whether a financed project has been delivered successfully. It is whether the investment has met its public purpose and, where opportunities existed, helped strengthen the country's capacity to pursue that purpose again.

Governments of the Global South should consider the question:

When development finance delivers an infrastructure project, does it leave the country better equipped to deliver the next ten?

That question offers Global South governments a practical way to connect external financing with a more ambitious objective: not merely building infrastructure, but progressively strengthening the domestic capabilities through which development can be sustained.