As one of the Board of Executive Directors' standing committees, the Committee on Development Effectiveness (CODE) monitors and assesses the Bank Group's effectiveness in fulfilling its development mandate. The Committee reviews the work of the Independent Evaluation Group for the World Bank Group, Management's Responses thereon, and select reports from Management to satisfy itself that the operations evaluation and self-evaluation activities are adequate and efficient. The committee also prepares for Board consideration select operations evaluations, draft strategies and policies, other high-priority development effectiveness issues, and monitors the implementation of Board decisions to ensure that the overall objective of poverty reduction is being served. World Bank Board of Executive Director Website
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On October 18, 2006, the Committee on Development Effectiveness discussed the Annual Review of Development Effectiveness 2006: Getting Results (ARDE) and the Draft Management Response.
2006 ARDE
Building on the 2004 ARDE that examined the Bank’s contribution to poverty reduction, the 2006 ARDE considered the factors at the country, sector, and institutional levels that facilitate or hinder poverty-reducing growth and effective service delivery to the poor, and how the Bank has taken these elements into account in its operations. Drawing on recent IEG evaluations of World Bank operations, the 2006 ARDE considered: (1) how efficiently economic growth has translated into poverty reduction, and what factors contributed to the effectiveness of Bank support towards achieving these results; (2) what factors have helped interventions lead to high-quality development results in sectors that deliver services to the poor; and (3) what types of Bank assistance have helped increase the accountability of public institutions responsible for delivering and sustaining results. The Annual Review identified three key areas where the Bank can further strengthen its effectiveness: focus on the nature of growth to ensure that the poor can benefit from economic growth; clearly articulate the results chain to ensure that objectives are set realistically and that key cross-sectoral constraints to achieving them are adequately identified and addressed; and build on a realistic assessment of the political economy of governance-related reforms.
Draft Management Response
Management found many of IEG’s findings and recommendations useful as inputs into improving the development impact of Bank support. At the same time, it noted that the Annual Review portrays a pessimistic view on growth and poverty reduction. Management also suggested that the ARDE could have been more balanced, to reflect the current Bank approach to country assistance strategies, the difficulties around strategy development in uncertain environments, the achievements in terms of continuing improvements in quality at entry and exit of operations with a growing volume of lending, and the focus on service-oriented approaches to improving governance and service delivery, and recent work to strengthen engagement with client countries on governance.
Overall Conclusions and Next Steps
The Committee appreciated the candid report and welcomed the findings on the sustained improvements in project quality, although much remained to be done. Indeed, many members felt that management need not be defensive or embarrassed about the results and should maintain a positive approach to learning from experience.
Members discussed the strategic issue of quality of economic growth for poverty reduction, and the ARDE observations related to potentials of growth resulting in job creation and productivity for the poor, and the challenges of rural poverty reduction. There was general support for ARDE’s call for setting more realistic objectives in country assistance strategies, as well as in individual operations. In this regard, members highlighted the importance of solid analytical work (including political economy) and the involvement of local institutions and experts in this area; the need to balance shortand long-term objectives; and the effective use of the results chain to set realistic objectives and identify sectoral and cross-sectoral constraints to reach the stated objectives. Members supported addressing cross-sectoral constraints for strong sector results, including the issue of matrix management structure and organizational incentives to support work across sectors. The chapter on public sector accountability drew interest in the context of the Bank’s new governance and anti-corruption strategy. Some speakers noted that the ARDE could have incorporated gender dimensions and aspects of harmonization.
The main issues raised during the meeting were the following:
ARDE's Findings. The Committee appreciated the candid report, although a few members echoed management’s view that the ARDE presented an overly pessimistic perspective of countries’ performances in reducing poverty, and it could have presented a more balanced picture of the Bank’s contributions. One member felt that the ARDE’s objectives were ambitious and it may have presented a simplified picture of the complex development issues. A number of speakers indicated it could have further differentiated between the poor, in particular to take into account the gender dimensions. IEG pointed to a number of country sector examples in the ARDE that illustrate how gender issues were addressed. It also indicated willingness to undertake another review of gender, which had last been evaluated in 2000. Management reminded the Committee of the Gender Action Plan, and the forthcoming Global Monitoring Report will also cover gender issues. The tendency to group African countries together and then generalize the findings, which were too broad, was also noted. Several speakers suggested the report might have better defined the methodology, terms, and data used, regarding which there were a number of comments and questions.
Focus on Quality of Growth. The ARDE finding that growth more effectively reduced poverty when it occurred in regions where most of the poor live and in job-creating sectors resonated with a number of speakers. However, some speakers cautioned against focusing too narrowly on jobcreating sectors or "cherry picking," and noted the need to address broader development issues that may be more challenging to address. Some members supported more attention to job creation for the poor, and observed that the ARDE could have elaborated on the role of the private sector in creating jobs, and on contributions of International Finance Corporation (IFC) and World Bank Group synergies in this area. IEG noted that ARDE covered the World Bank activities, while IEG-IFC prepares a separate review of IFC activities. It also indicated that it was looking at ways to review the World Bank Group synergies in its evaluation work. Several speakers commented on the need to strengthen Bank support for rural development, taking into account the rural-urban linkages. One member sought information about the weaknesses and constraints of Bank assistance in rural development, while another asked about the Bank plans to improve outcomes. Management viewed rural development as an important area for support, noted that the results of the new rural strategy cannot yet be measured, and also remarked on the need to address the overall trade environment. Deepening country-specific knowledge of the constraints to the poor’s participation in the benefits of growth and the distributional impact of growth-enhancing reforms was emphasized.
Selectivity and Setting Realistic Objectives. Generally, speakers supported ARDE’s call for greater realism in country assistance strategies, as well as in individual operations. The resultsbased Country Assistance Strategies (CASs) were considered key to selectivity and setting realistic objectives. Management broadly agreed, but it also echoed the view of a few speakers that optimism and ambition are also needed in development.
- Country analytical work: Speakers stressed solid country analytical work (including political economy) to underpin country strategies and to support greater selectivity and proper sequencing of Bank assistance, especially in Low-Income Countries Under Stress/fragile states. Some speakers urged more involvement of local institutions and experts to promote country ownership. Management remarked on its increased efforts to consider the political context and country ownership issues. In order to be effective, members emphasized the need to strengthen country capacity for data collection and analyses, and for monitoring and evaluation. A few remarked on the importance of integrating technical assistance for capacity building in the overall assistance strategy.
- Short- and Long- Term Objectives: The need to balance short- and long- term objectives and the importance of sequencing, especially when countries face capacity issues and/or political resistance, was noted. In this connection, speakers supported a betterarticulated and more realistic results chain. Management assured the Committee that it is using a results chain, which is a central element of the Results-Based CAS. It also expected that the increased emphasis on impact analysis would also help strengthen the results chain.
- Policy-Based Lending: A member considered realistic country assessment critical for policy-based lending and sought to ensure staff incentives and support in this area. Another member urged closer monitoring of the implementation and results of policy-based lending. Management noted that the bulk of the Bank’s development policy support has gone to countries with higher Country Policy and Institutional Assessment (CPIA) ratings, indicating a better policy and institutional environment.
Enhancing Sectoral Impacts through Cross-Sectoral Synergies. The Committee concurred with the need to overcome cross-sectoral constraints for strong sector results, which IEG elaborated on, referring to a number of examples. Two members noted the transaction costs associated with coordination and implementation, and the need to work across line agencies at the country level. Of particular concern to most speakers were the constraints posed by the matrix management structure and staff incentives to work across sectors, and management action in this area. Different views were expressed in response to a member’s question as to whether cross-sectoral work was limited by the organizational structure or by lack of appropriate incentives. Management did not consider structure as the main underlying issue limiting work across sectors. It commented on the need for behavioral changes, observing that limited cross-sectoral work may also be attributed to the Bank hiring professionals with strong sector skills.
Strengthening Public Sector Accountability. Speakers stressed the importance of country ownership, broad-based support, political commitment, and the long-term perspective needed in improving governance, which were highlighted in the ARDE. In this context, one member cautioned about Bank’s involvement in coalition building when political conditions were not ready for broad-based public sector reform. IEG clarified that better results have been associated with an incremental approach to public sector reform, taking into account the country’s political situation to allow governments to align support for its reforms. Other speakers stressed the importance of working with local governments in community-driven development initiatives. Both management and IEG remarked that more recent community-driven development operations are taking into account the need to work closely with local governments.
The unchanged perceptions of governance quality at the country level, despite the implementation of Bank-supported public sector reforms, were of concern to some speakers. Some speakers questioned the usefulness of the governance indicators, and one member urged extra care in the underlying methodology of the CPIA and World Bank Institute governance indicators. A few speakers expressed interest in the factors that support societal and attitudinal changes, for which one member proposed establishing process indicators. Responding to a question about the record of public financial management in the Africa Region, management said that the actual results for public administration reform had been mixed, while that of public expenditure and financial management was stronger. A member supported ARDE’s point that sector initiatives having a positive impact on governance should be further encouraged, even when they are not labeled as "governance support."
Harmonization and Coordination. Several speakers referred to the limited Bank resources, the need for the Bank to complement other donors’ efforts, and the importance of donor coordination and harmonization. Some suggested ARDE could have considered whether harmonization, in line with the Paris Declaration on Aid Effectiveness, led to better overall results at the country level. IEG recognized the importance of reviewing the extent to which harmonization is contributing to better results. It emphasized that such a review should be done jointly with other partners, which is a challenge. IEG mentioned that a joint evaluation of donor harmonization efforts is being contemplated under the auspices of the OECD/DAC. Management mentioned it was preparing a report on harmonization and aid effectiveness, which will soon be considered by the Board.
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