Leadership Forum - May 2005

Implications for World Bank Operations

• Related Event
• Feature Reading

Author: Julie McLaughlin, Lead Health Specialist, Africa Region of The World Bank (based in Dar es Salaam, Tanzania). Lead author and Team Leader for the report.

As the chapter describes, the objectives of the HNP staff in the World Bank’s Africa Region are to support efforts by the Bank’s client countries to achieve sustainable improvements in health outcomes. Investments in health are often driven by compassion and the desire of development assistance agencies to undertake short-term initiatives intended to alleviate visible suffering quickly. However, unsustainable efforts to improve health will not reduce poverty and will not contribute to attaining the Millennium Development Goals. With the commitment to the MDGs, reductions in child mortality, maternal mortality, malnutrition, malaria and AIDS – as much as economic growth –now define the results of a country’s poverty alleviation and development efforts. Thus, the Bank’s health staff assume greater responsibility in ensuring that the Bank’s work contributes towards the reduction of poverty.

Efforts of the global community to improve aid effectiveness, the Bank’s recognition that it has to focus efforts in its areas of comparative advantage together with consolidation of global efforts around the Millennium Development Goals affect the way in which the Bank contributes towards improving health outcomes today.

Modesty is an underrated virtue

Approaches to development assistance are evolving. The World Bank, together with the rest of the development community, has had to become more humble in how it endeavors to improve health outcomes in the developing world, particularly Sub-Saharan Africa. No country or institution can claim to have the solution or the key to how limited resources (and they are always limited, even in the wealthiest countries) can best be organized, nor exactly what policies will produce desired results in health. Our international advice has often been proven wrong or inappropriate at country level. Today, we recognize that generic solutions promoted by global initiatives, commissions and task forces are implausible. The, sometimes subtle, differences between regions and between the 47 countries of Sub-Saharan Africa are important. It requires country and sector specific knowledge to understand these differences.

No longer do development assistance organizations describe how “they” will improve outcomes, but rather we recognize that it is African governments that need to lead efforts, working with non-government agencies and local communities in order to improve the health, nutrition and population outcomes of their own nations. Locally adapted and locally owned approaches are essential to achieving sustainable results.

Show me the money

Consistent with the above, the global community has begun to reform the way in which it provides development assistance financing. This has been both affected by, and reflected by, the Bank’s Comprehensive Development Framework, the commitment to operate within the frameworks of country-defined Poverty Reduction Strategy frameworks and the High-Level Forums on Harmonization in Rome (February, 2003) and Paris (March 2005). Development partners have increasingly appreciated that:

(i) money is fungible, thus tracking financing provided for particular diseases or designated program becomes less important, while monitoring total expenditure becomes more important;

(ii) developing parallel systems for managing and reporting on financing impinges upon limited capacity and undermines efforts to build local systems and capacity; and

(iii) earmarked or projectized external financing distorts sector budgets and can appropriate the responsibility of countries to set their own priorities.

In the health sector, this has encouraged financiers to shift away from earmarked or projectized financing, and raises concerns about the proliferation of global initiatives, which can increase transaction costs by initiating multiple missions, demands for reports, separate reporting and audits, etc. Also, when as much as half the health sector budget is determined externally (because donors have allocated funds for projects and/or specific ”priority programs”) governments are denied the opportunity to make decisions and set their own priorities. Allowing governments greater discretion over the use of external resources for health is key to capacity building. It is also critical to sustainability. We have seen how when one agency ceases to fund or provides vaccines, drugs for tuberculosis or contraceptives that government’s ownership of, and commitment to, such programs is questions as these inputs are then left unfunded.

So?…..

What does all of this imply for institutions, such as the World Bank, which have global lessons of experience and expertise, together with the capacity and mandate to transfer knowledge to client countries? What does this mean for how the World Bank transfers financial resources for health?

The Report recognizes that the World Bank can contribute to improving health, nutrition and population outcomes for the poor in Africa through multiple mechanisms: the transfer of financial resources, through knowledge transfer and policy advice, through analysis, appraisal, monitoring and evaluation, and through advocacy. With the move towards harmonization, the Bank recognizes that it must focus its efforts in areas where it adds value and has a comparative advantage – in the areas of health systems and health financing, in forging the linkages between health and macroeconomic policies, and in mobilizing multisectoral action for health.

As regards the transfer of financial resources, the recommendations in the report are consistent with a concurrent piece of work, the Bank’s Strategic Framework for Assistance to Africa (SFIA) which describes how the Africa Region will apply the above principles across all sectors. SFIA appreciates that more effective aid partnerships are based on client ownership, dependable financial flows, coordinated donors, harmonized processes and a linkage to results. It recognizes the trend towards multidonor budget support in many African countries. The Bank, unlike donor country development agencies, does not have a parliament or congress which defines or earmarks how moneys can be spent against specific diseases or programs. This is a comparative advantage to be exploited.

SFIA describes a goal to work towards whereby as country capacity increases, financing for health would first shift to sector-wide support and eventually to budget support. Yet, importantly, it recognizes that even when resource transfer modes are through PRSCs (or other programmatic lending) the Bank would need to retain its ability to engage in sector dialogue, provide quality policy advice, support analytical work, monitor sector expenditures, policies and results, and inform the Bank and IMF’s macroeconomic and fiscal work with a sector perspective.

SFIA exhorts the Bank to recognize that policy dialogue and partnership become critical as the model of development assistance shifts. Policy dialogue (encompassing analytical work, country level debate and discussions) should assist countries in strengthening their own strategies. Partnership is also critical for success. “IDA must seek opportunities to enhance donor cooperation and reduce transaction costs for clients (for example, by harmonizing procedures or pooling funds”.

This way of operating changes the benchmarks for Bank operations in health, Rather than reporting upon how much the Bank allocated or disbursed against immunization, child health, tuberculosis or reproductive health, we will instead be asked how well recipient governments are translating all their financing (including IAD) into outcomes.

This changes the job description for health staff. It also raises concerns. As we de-link financing from policy advice and sector dialogue, does this not undermine our expertise and our ability to ensure that IDA is well spent? The quality of our analysis and advice will have to complement that of many other agencies, and it will have to be of high-quality When our advice is not tied to our financing, it will be judged on its perceived value. In countries where we have made this transition successfully, such as Uganda, government continues to welcome our involvement in sector dialogue.

Uganda is not representative of all of the countries in the region. HNP projects will remain in many countries, and many will still benefit from a project approach. However, Bank operations are expected to work towards s trengthening the capacity of client countries building the capacity of ministries of health to:

• to identify and set priorities for their health concerns;
• design locally appropriate policies that build on global and regional knowledge and experience;
• allocated resources against priorities;
• implement effective strategies; and
• monitor and evaluate the impact of strategies on health outcomes for the poor.

In the new framework, recipients must have the capacity to plan and budget, skills that are limited in many recipient countries. Assisting countries to develop these skills means moving away from project management units, as instead of building government systems and capacity of government staff, project units are typically run by contractors trained in the systems and procedures of the external financier. It also means instituting sector public expenditure reviews in order to monitor expenditures (domestic and external) against budgets and against out puts and thus continually improve resource allocation.

The responsibilities of the Bank’s health staff is changing from managing projects to supporting governments with analysis and advice. That work should focus on the areas where the Bank has a comparative advantage – financing, systems, linkages with economic and fiscal policy and identifying opportunities through the Bank’s work in other sectors to impact on health outcomes. “Improving HNP Outcomes in Sub-Saharan Africa: The Role of the World Bank” describes the opportunities and challenges for the Bank to contribute in each of these areas.

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Related Event: Launching of “Improving HNP Outcomes in Sub-Saharan Africa: The Role of the World Bank” with the  African Development Bank in Hammamet, Tunisia May 24-27, 2005.

Feature Reading:  Improving Health, Nutrition and Population Outcomes in Sub-Saharan Africa: The Role of the World Bank, by The World Bank, 2004.