The World Bank's long history of project financing provides a unique opportunity to quantify the level of uncertainty in public sector investment projects in developing countries and to assess the effects of cost-benefit analysis on investment decisions. For projects whose costs and benefits are reasonably amenable to quantification, Bank staff calculate economic rates of return at appraisal and again at project completion (after construction works have been completed and the project begins normal operations). For more than 1,000 projects, economic rate of return estimates now are available for both appraisal and completion. The difference between these two estimates provides an interesting empirical measure of the uncertainty of development projects financed by the World Bank.Cost-benefit analysis is a standard appraisal tool for selecting development projects at the World Bank and other development finance institutions. Several governments also have adopted these techniques in planning public investment projects. The World Bank broadly follows the Little-Mirrlees (1968, 1974 methodology, which expanded earlier approaches to cost-benefit analysis to take