The Delta of Sustainable, Inclusive and Resilient Infrastructure Investment: Evidence from Cost-Benefit Appraisal

This paper examines whether infrastructure projects that incorporate sustainability, inclusion, and resilience (SIR) components differ from traditional investments in economic appraisal outcomes. Using a harmonized dataset of World Bank and Inter-American Development Bank projects across energy, transport, and water sectors in Latin America and the Caribbean, we identify SIR-oriented operations through text-mining and compare them with non-SIR projects using a propensity score matching approach. Results show no statistically significant differences in standard cost benefit indicators such as internal rates of return, benefit cost ratios, or total economic costs between SIR and non-SIR projects. However, SIR projects exhibit a distinct cost structure: a higher share of discounted capital expenditures and relatively lower operating and maintenance costs, suggesting more investment-intensive designs and better long-term adaptation. This difference has important policy implications: by concentrating costs upfront and reducing recurrent expenses, SIR projects improve cost predictability, enhance resource allocation efficiency, and strengthen fiscal responsibility. At the same time, current appraisal methods fail to capture the broader benefits of SIR investments, underscoring the need for improved data and valuation frameworks to measure resilience and inclusion gains. This study provides one of the first empirical assessments of SIR considerations in economic appraisal and highlights the priority of advancing methodologies to reflect their true value.