Strengthening State Capacity Through Better Project Readiness

From a linear to a “step-up” approach

A conventional approach to project preparation can follow a linear trajectory, with a project moving through a series of stages toward approval and eventually implementation. Some critical actions on bidding, safeguards, and project management may not advance until after project approval.

A “step-up” approach treats the project value chain as a continuum in which readiness is strengthened progressively rather than achieved at a single point. Key requirements are addressed early, with clear responsibility for completing them. A checklist can set concrete deliverables for major milestones, allowing actions to be completed progressively and monitored throughout the project cycle.

Such an approach may also require legislative or executive action to revisit existing government processes. The objective is to prevent unresolved issues from accumulating until implementation and instead build readiness progressively as the project advances.

What the South Asia experience shows

Recent experiences in South Asia show how business process reforms can take different forms and proceed at different speeds. Together, they illustrate how governments can move from identifying readiness constraints toward institutionalizing solutions.

For several years, India has had comprehensive government-prescribed readiness criteria for processes related to the approval of projects financed by multilateral development banks. These criteria provide an institutional framework for project readiness.

In Bangladesh, discussions with government counterparts identified business process constraints which hindered readiness levels at approval. The focus was on ensuring that procurement, safeguards, institutional arrangements, approvals, counterpart funding, budgeting, and financial management were addressed sufficiently early to support implementation.

Government business processes involving key departments were mapped to identify opportunities for restructuring. In 2025, the government issued a circular setting out conditions that relevant ministries or departments must fulfill before signing loan agreements for externally financed projects. These included approval of the detailed project proforma, appointment of the project director and other essential project management officials, completion of necessary land acquisition and procurement processes, and submission of the resettlement plan.

Institutionalizing these requirements provides a foundation for more consistent project preparation. Sustained implementation of the readiness matrix, however, will be critical for the reforms to endure and deliver their intended results.

Another example comes from Nepal, where a new readiness checklist was developed in 2025 following discussions and an exchange of good practices. The checklist emphasized early planning and interagency coordination while giving greater attention to fiduciary, environmental, and social safeguards. By specifying actions and minimum requirements before loan negotiations, the checklist translated readiness into concrete steps that can be monitored.

Other countries are at different stages. In Sri Lanka, discussions with the government are ongoing for the development of new readiness criteria. The process also brought greater attention to project conceptualization, financial resources, and monitoring and evaluation. A working group was established to further develop the recommendations. Aligning business processes with readiness criteria remains a work in progress in Bhutan. In the Maldives, readiness has been discussed to a more limited extent, alongside a relatively smaller project portfolio.

These experiences suggest that approaches need to reflect country circumstances. They also point to a common progression: identify readiness constraints, understand the business processes behind them, and introduce specific actions through a formalized readiness framework within government systems. Readiness can then become more than a requirement for individual projects—it can become part of how governments manage development delivery.

How business process reforms strengthen state capacity

The significance of these reforms extends beyond making individual projects ready for implementation. Improving business processes can strengthen the systems through which government institutions plan, coordinate, decide, and ultimately deliver development programs.

The South Asia experience offers several lessons for governments seeking to improve project readiness and strengthen state capacity.

First, treat readiness as a business process issue. Better project documents alone will not resolve problems rooted in complex approval, procurement, safeguards, financing, and institutional processes. Governments need to examine the processes surrounding projects, identify where bottlenecks arise, and streamline business processes. They can also work with development partners to identify opportunities to simplify and better align processes.

Second, build readiness progressively. A project should not become “ready” only at approval. Critical actions should be addressed at the appropriate stages so that unresolved issues do not accumulate and undermine implementation.

Third, make requirements concrete and measurable. Translating broad readiness objectives into specific actions can make responsibilities clearer and progress easier to monitor. Formalizing requirements is an important first step, but sustained implementation will determine whether reforms endure.

Fourth, adapt the approach to country circumstances. A single template may not fully suit every country, but it can provide a useful framework for moving forward. Governments can begin by identifying their specific business process constraints and determining the legislative or executive actions needed to address them. Knowledge exchange can help countries learn from different approaches.

Finally, sustain government ownership and appropriate delegation of authority. Business process reforms ultimately need to be owned by governments and supported by clear institutional responsibilities. Policy dialogue and knowledge exchange can complement these efforts.

Portfolio forums organized by the Asian Development Bank between 2023 and 2025 brought together six South Asian countries around a consistent message: the project value chain should be treated not as a linear trajectory but as a continuum requiring stepped-up efforts, accountability, and monitoring at every level. Alongside efforts to strengthen or establish capacity-building resource centers in countries, business process reforms provide a framework for improving project preparation and implementation practices and creating opportunities for more upstream engagement.

Sustaining these reforms requires continued effort. Embedding readiness requirements in government processes can improve the transition from project preparation to implementation while strengthening the capacity of governments to deliver development outcomes.