Major steps in identification, many of which will be pursued concurrently in the identification process, are:

• review of the national and sectoral analyses, plans and priorities of both the government and the potential financing agency – for overall context and to identify overall goals and outcomes to pursue;
• social analysis [see Social Analysis] – understanding the socio-economic context, and examining the dynamics of rural livelihoods, social diversity and gender in the context of agriculture and rural development;
• stakeholder analysis – assessment of relevant stakeholders and institutions and their respective interests, roles and capacities to inform definition of outcomes and interventions. Mapping stakeholders can be a helpful analytical exercise, but care should be taken that preliminary analysis does not cement a status quo at the expense of developing a common vision for change; 
• diagnosis and preliminary assessments of technical, institutional or socio-economic constraints and opportunities. Diagnosis of the underlying causes of the problems – for instance, by using a problem tree approach – and of the factors which underpin the opportunities;
• preliminary definition of envisaged results of the investment, and overall project logic in a draft results framework [see RBM];
• the definition of clear project objectives and related metrics is important to focus the discussion. The exact wording will be refined throughout design [see Design]. It should capture the essence of the concept and what the project will actually be able to achieve;
• review of alternative possible solutions or development strategies;
• review and assessment of relevant past and current development efforts and projects in the same or related fields or geographic area, considering the evidence base and lessons learned, in particular from evaluations of relevance to the present context [see Evaluate and Capitalize];
• preliminary financial and economic analysis [see FEA];
• consideration of major cross-cutting issues such as climate change, gender, nutrition and governance [see Gender Analysis and Nutrition], and delineation of how they will influence project scope and strategy.

Professional bias is a common problem in identification, as experts tend to focus on solution paths linked to their particular area of expertise. The identification team needs to have the breadth of expertise to be able to identify and undertake a preliminary screening of major alternatives. Further, close consultation with relevant stakeholders in the identification process at national and local levels is essential in order to ensure not only that identification draws upon the best available information (evidence base), but also that the evolving concept will reflect stakeholder concerns and aspirations, and that there is clear political and institutional buy-in to pursue a project with the envisaged focus. As early as possible the formulation team should also initiate contacts at field level with potential participants and beneficiaries of the proposed investment and with the stakeholders at community level. Encouraging active stakeholder participation in the identification process will also create buy-in, which enhances prospects of implementation success and sustainability.

A participatory workshop focusing on the results framework, using the logframe planning methodology or a similar approach [see RBM], is a useful method for harnessing resources and bringing together the perspectives of all stakeholders. This can effectively define stakeholders’ needs, set project objectives and the related project interventions, and promote understanding of the distribution of implementation responsibilities. It can also be used to identify knowledge gaps requiring further research and field survey and to assess likely resource availability and institutional capacity and community perceptions. 

Social analysis is most useful if it feeds into the identification process rather than being invoked at a later stage, as insights may have a determining influence on priorities and the approach to be pursued [see Social Analysis]. Where detailed social analysis cannot be undertaken at identification because of time or resource constraints, the team must draw upon the best and most relevant existing analysis available, and identify priority areas for more detailed analysis during preparation.

Guiding Questions for Identification

The following questions can help to focus identification work. Not all of these can be answered during the identification phase, but they should also be considered with a view to identifying further analytical work that will be necessary to inform subsequent formulation, should the concept be approved. Typical questions include:

• Is the macroeconomic and policy context conducive to project success? Are the legal framework, governance and social setting compatible with successful implementation? What are the constraining factors?
• Does the proposal fit national and sectoral policies and the strategy of the financing agency?
• Have the constraints, problems or opportunities to be addressed been properly diagnosed and understood? Is there a clear link between the investments proposed and the priorities of beneficiaries and stakeholders [see  Social Analysis]? Will participants face constraints in embracing the envisaged options – linked, for instance, to social constraints, perceptions of risk, lack of personal resources or restricted access to resources or markets? Can the new opportunities that are envisaged compete successfully with other options open to the beneficiaries to improve their livelihoods, such as paid employment or urban migration?
• Do the key stakeholders and institutions support the project idea? Are they committed to playing their envisaged roles in implementation? Do they have the funds, skills and other resources needed to do so? Will deploying these resources jeopardize other development activities to which they are also committed?  Can the project strengthen the institution sufficiently to carry out new as well as existing responsibilities effectively?
• Is the basis for any envisaged technological change well established? Is it relevant to the specific target group and context ? If not, what type of additional analysis is required to inform investment choices?
• Is there a real need for the investment – and if so, why has it not been made before? Are the proposed actions the most appropriate way of reaching stated goals and benefits? Are other lenders or donors already addressing, or about to address, the same issue? 
• What has been done before and has it worked well or not ? What were the main constraints and success and success factors?
• What is the potential contribution of the project to national economic development? Is there a rationale for public investment and for the involvement of international financing partners? What type of economic analysis needs to be carried out during preparation to inform and appraise design [see FEA]?
• Do other donors need to be involved to enhance success – for instance, to align existing interventions, or to provide complementary support through technical assistance? 
• Are the scale and time frame proposed for implementation realistic, especially in relation to institutional capacities? Would a testing or pilot phase be more appropriate before large-scale investment? Should targets be scaled down? Are government and stakeholder resources, as well as the natural resource base, likely to be adequate to sustain the proposed development after external funding ends?

The proposed concept should be presented in the format specified by the government and the financing agency. In recent years, financing agencies have adjusted formats to make them shorter and to focus on the key aspects necessary to review the concept prior to proceeding with more investment for detailed preparation. 

Within the concept note, or in a separate report, the following should be included: 

• an explanation of the context in which the investment has been identified;
• the reasoning processes which led the team to its conclusions;
• general evidence that the proposed development will be attractive to the intended beneficiaries and that it can be implemented in the chosen setting;
• any design alternatives from which to make the final choice of what to prepare in detail;
• the issues to be resolved or decisions to be taken, and by whom, to finalize choices and clear the way for final preparation; and
• a listing of further studies necessary to bring the chosen or recommended option to final preparation, including terms-of-reference, cost estimates, timetables and suggested responsibilities. 

The main text may be supported by working papers that provide further details on specific aspects, as well as relevant background data. 

Recommendations for further studies and information collection should focus on what is absolutely necessary, drawing as much as possible on existing information and analysis, as the accurate gathering and analysis of primary data and the conduct of surveys of all types is expensive and time-consuming.