Evidence-based investment selection: Prioritizing agricultural development investments under climatic and socio-political risk using Bayesian networks

Abstract

Agricultural development projects have a poor track record of success mainly due to risks and uncertainty involved in implementation. Cost-benefit analysis can help allocate resources more effectively, but scarcity of data and high uncertainty makes it difficult to use standard approaches. Bayesian Networks (BN) offer a suitable modelling technology for this domain as they can combine expert knowledge and data. This paper proposes a systematic methodology for creating a general BN model for evaluating agricultural development projects. Our approach adapts the BN model to specific projects by using systematic review of published evidence and relevant data repositories under the guidance of domain experts. We evaluate a large-scale agricultural investment in Africa to provide a proof of concept for this approach. The BN model provides decision support for project evaluation by predicting the value-measured as net present value and return on investment-of the project under different risk scenarios.