Abstract

This paper applies ex ante econometric, cost–benefit, and financial methodologies to predict diffusion and feasibility of the irrigation project in Shahrazoor, Kurdistan, Iraq. To do so, I investigated the socio-economic, psycho-cultural, and financial factors that determine participation. The socio-economic part of the econometric analysis showed that the project was appreciated more by poorer and economically weaker farmers who rely on agriculture than those who rely on livestock activities. The psycho-cultural part of the econometric analysis emphasized that the project was appreciated more by literate farmers who adopt a maximization (rather than a status quo) approach. The cost–benefit analysis applied to the irrigation project tailored to poorer and weaker farmers determined an acceptable internal rate of return, but the financial analysis highlighted that values for water prices, a feasible internal rate of return and loan interest rates that simultaneously meet the government and farmer budgets might not exist.