Development Effectiveness Review

OED’s evaluations provide the basis for its Annual Review of Development Effectiveness (ARDE). The ARDE 2002 identified three important messages related to the Bank’s contribution toward achieving the MDGs:

1. Having endorsed the MDGs, the Bank has put in place a corporate strategy aligning Bank Group efforts with the MDGs and providing an overall framework for addressing them. The Bank, however, needs to assess and address the implications of the MDGs more fully, especially for its use of lending and administrative resources.
2. The Bank’s country, sector, and global programs are consistent with the MDG themes and have increasingly focused on poverty reduction. This focus can be greatly enhanced by defining quantified and time-bound country targets for poverty reduction and other relevant outcomes, and helping client countries design strategies to achieve them.
3. The performance of Bank-financed projects continues to exceed the Strategic Compact target of 75 percent satisfactory (see figure 3.10). The MDGs now challenge the Bank to demonstrate improvements at the country level—in terms of economic well-being, human development, and environmental sustainability. This will require outcome-focused, cross-sectoral strategies that capitalize on the comparative advantage of partners. “Business as usual” by countries and donors will not suffice.

Opportunities, Risks, and Challenges. Endorsed by all 189 United Nations member states in the 2000 Millennium Declaration, the MDGs represent an unprecedented agreement among the development community about key development outcomes. The themes embedded in the MDGs are not new to the Bank. The first of the goals—poverty reduction—has been the Bank’s overarching objective since 1990. The newness of the MDGs lies in their focus on outcomes, on quantitative and time-bound development targets, and on developed-country obligations in a global partnership for development. These new aspects of the MDGs present an opportunity to increase the results focus of country and donor programs, to address the multisectoral determinants of outcomes, and to improve the measurement and monitoring of outcomes. They also should facilitate evaluation by providing better data on baselines and achievements.

At the same time, adopting the goals entails risks and challenges for the Bank. Based on current progress trends, many countries will not achieve the MDGs by 2015, which poses a risk of disappointment and cynicism. There are also challenges: localizing the global goals to country conditions, harnessing the contribution of sectors without an explicit goal, focusing on outcomes among poor countries and population groups rather than on global outcomes, and identifying the results chain and monitoring appropriate intermediate indicators. The Bank’s effectiveness in addressing the development goals will depend on how well it manages these risks and challenges.

Findings.�ARDE 2002 finds that the Bank’s country, sector, and global programs are consistent with the MDG themes and that the Bank’s support for them has been continuous. Moreover, performance at the individual project level shows an upward trend. The Bank must now scale up impact to the country level. Although CASs have increasingly focused on poverty reduction, their goals are often expressed in terms of directions of change rather than in achieving specific targets. Poverty Reduction Strategy Papers, on the other hand, provide a clearer set of targets, although the realism and achievability of their targets can be improved. The Bank needs to define the objectives and targets of its country programs with greater specificity, deriving these from national targets established by countries in light of global development goals, and using PRSPs where applicable. It requires better analytical work, including stronger poverty analysis.

The Bank’s sector strategies show increasing attention to poverty linkages. Although they also increasingly recognize the multisectoral determinants of outcomes, they do not yet provide guidance on how to develop multisectoral strategies to achieve specific outcomes in various country settings. The strategies need a more effective institutional mechanism to foster the design and implementation of cross-sectoral strategies.

All Bank-supported global programs broadly support the MDGs. But few involve developing countries in their governance and management, and few focus on global public policy formulation involving developed-country policies. Complementary country-level investments have received insufficient attention. Global programs are no better than other development efforts at monitoring and evaluating their activities—typically monitoring funds inputs but not outcomes.

The monitoring of both project outcomes and the effectiveness of Bank programs in addressing the MDGs needs strengthening. The Bank should pay greater attention to helping clients improve the quantity and quality of relevant data to measure and improve progress toward the goals.

Country Evaluation Findings

Country Assistance Evaluations (CAEs) carried out by OED concentrate on the development effectiveness of the Bank’s entire program of assistance to each country. They provide opportunities to assess lending and advisory services in the context of the CAS. OED undertook seven country evaluations in fiscal 2003.

Results from these evaluations confirm that the Bank’s country programs pay significant attention to poverty reduction, primary education, and primary health services. A number of OED CAEs noted improved treatment of poverty in the Bank’s country programs. Those CAEs also observed that even in some countries with low levels of poverty, poverty reduction has been a major focus of the Bank’s country programs. Country programs in transition countries, however, have been less successful at incorporating goals for poverty reduction.

Sector and Thematic Evaluation Findings

OED sector and thematic evaluations address issues that cut across Bank operations, such as the effectiveness of dialogue between borrowers and the Bank on policies and on project selection, design, and implementation. OED bases many of these studies on portfoliowide evaluations, country case studies, and assessments of nonlending services, including economic and sector work. The studies draw on external advisory panels and incorporate such participatory features as public consultations, workshops, Web-based discussion groups, and enhanced dissemination. Sector and thematic evaluations will feed into the revision or formulation of a Sector Strategy Paper.

A Joint Review on Private Sector Development in Electricity (PSDE) conducted by OED, IFC’s Operations Evaluation Group, and MIGA’s Operations Evaluation Unit found that outcomes of IFC and MIGA transactions were positive but that the Bank’s PSDE project-level outcomes were disappointing. The study also found that much work remained to be done to integrate poverty reduction and environmental mainstreaming into the design of power sector reforms and PSDE strategies.

Corporate Evaluation Findings

OED’s Debt Relief for the Poorest: An OED Review of the HIPC Initiative found that the core purpose of the Initiative—to reduce the elevated debt levels in eligible countries—was highly relevant from both political economy or aid effectiveness perspectives. HIPC, as a group, are receiving an increasing share of declining global aid resources; transfers to other poor (but not highly indebted) countries appear to be declining correspondingly. In absolute terms, however, HIPC are receiving less than they did in 1995. The HIPC Initiative’s emphasis on expenditures in the social services has led to increased health and education spending in national budgets, but more focus on growth-enhancing programs is warranted.

Global Evaluation Findings

The Bank now supports about 70 global programs with financial contributions in fiscal 2003 in excess of $150 million. At the request of the Board, in fiscal 2001 OED initiated an independent review of the development effectiveness of the Bank’s growing portfolio of such programs, assessing the Bank’s performance at three levels: corporate strategy, programmatic management, and individual programs. The review has resulted in two reports. The first, “The World Bank’s Approach to Global Programs: An Independent Evaluation,” focused on the Bank’s strategic and programmatic management of its portfolio global programs. The report already has resulted in a senior management proposal to improve management and strengthen Bank-wide strategies and priorities.

The second, The CGIAR at 31: An Independent Meta-Evaluation of the Consultative Group on International Agricultural Research (forthcoming), examined the Consultative Group on International Agricultural Research (CGIAR). According to the report the CGIAR’s productivity-enhancing research has had sizeable impacts on reducing poverty by increasing employment, raising incomes, lowering food prices, and releasing land from agricultural use. The report noted, however, that the Consultative Group is less focused on enhancing agricultural productivity than it used to be, and it has not responded sufficiently at the system level to the biotechnology revolution, the increasing importance of intellectual property rights, and the growth of private sector research.

Committee on Development Effectiveness

The mandate of the Committee on Development Effectiveness (CODE) is to monitor and assess the Bank Group’s effectiveness in fulfilling its mission of reducing poverty. The Committee reviews the work of the OED, management’s responses thereto, and selected reports from management to satisfy itself that the Bank’s operations evaluation and self-evaluation activities are adequate and efficient. The Committee also prepares for Board review of and decisions on selected operations evaluation and high-priority development effectiveness issues, and it monitors the implementation of Board decisions with a view to ensuring that the overall purpose of reducing poverty is being served.

Also available:

Box 3.1: Aid Effectiveness and Capacity Building