On February 7, 2007, the Committee on Development Effectiveness (CODE) considered the report The Development Potential of Regional Programs – An Evaluation of World Bank Support of Multicountry Operations and the draft Management Response.
Background
CODE discussed the approach paper for this IEG evaluation report in July 2005. This evaluation on Bank Support of Multicountry Operations builds on IEG's Review of Bank Support for Global Programs, which had also been considered by the Committee. Regional programs are distinguished from global programs in that regional programs often address issues of a geographic dimension (for example, a river system, transport corridor, energy market), and often involve Bank lending.
Findings and Recommendations of the Report
The IEG report assessed the World Bank's support for regional development programs active between fiscal years 1995 and 2005. These accounted for less than 1 percent of total Bank financing during this period. Three key findings are: (i) regional programs can deliver strong results; (ii) success and sustainability depend on strong ownership of all participating countries; and (iii) the Bank has been particularly effective in fostering country interest in regional programs through analytical work and resource mobilization, and less effective in helping countries deal with their conflicting interests and plan for sustainable activities. The evaluation identified five design features that have proven critical to the success of regional programs: strong country commitment, scope of objectives matched to national and regional capacities, clear delineation and coordination of the roles of national and regional institutions, accountable governance arrangements, and planning for sustainability. The evaluation concluded that the Bank has an opportunity to adopt a potentially bigger role, building on examples of successful experience. To do so, the evaluation recommended that the Bank: (i) establish regional program strategies and integrate them into Country Assistance Strategies (CASs); (ii) work with partners to put together grant and loan financing packages for individual regional programs; (iii) give more attention to improving the impact of Bank support for regional partnerships; and (iv) strengthen corporate incentives and capacities to provide effective regional program support. IEG intends to disseminate the findings of the report at a half-day meeting in Washington before the Spring Meetings, as well as organize press briefings in Nairobi and elsewhere.
Draft Management Response
Management found the evaluation review useful in helping to refine its thinking on the Bank's role in supporting regional activities. At the same time, it noted the relatively small sample size and that a relatively large share of the Bank's support for regional programs is recent; these recent programs fell outside the scope of the IEG review. Management recognized that there are some issues that may be better addressed at global and regional levels. It committed to strengthen Bank support for regional programs, although the Bank remains a country-focused institution. Management broadly agreed with the thrust of the evaluation report and its recommendations. However, given the different regional contexts that necessitate varied responses and considering the complexity of regional initiatives, it stressed the need for flexibility. Accordingly, it proposed to address the specific IEG recommendations practically, taking into consideration the regional and country contexts.
Overall Conclusions
The Committee welcomed the IEG evaluation report. Members found it insightful and informative for the Bank's future approach to regional initiatives, although the sample size of the evaluation was relatively small. The Committee also appreciated management's thoughtful response to the evaluation report. It found the staff presentations from the Africa, Europe and Central Asia, Latin America and Caribbean, and Middle East and North Africa Regions on their ongoing regional work illuminating. Recognizing the growing significance of regional cooperation, the Committee supported strengthening of the Bank's role through a more strategic and proactive approach. Members and speakers reiterated IEG's findings on the importance of ownership of participating countries for the success and sustainability of regional initiatives. Given the complexity of regional initiatives, members supported flexibility and innovation in the Bank's approach. Speakers encouraged the development of regional program strategies by regional departments, particularly where crosscountry approaches are actively being pursued. Likewise, they supported more integration of regional dimensions into relevant country assistance strategies. The Committee discussed various aspects of support to regional initiatives including differences between regions, design and financing issues, alignment of the organization to strengthen support, and coordination within the World Bank Group and among donors.
Next Steps
The Committee requested management to come back to the Board as soon as possible with more information on the Bank's approach to regional initiatives, preferably as part of the overall Bank strategy, which is being updated. The following main issues were raised during the meeting:
Urge More Strategic Approach
The Committee supported the IEG recommendation that Bank involvement in regional programs should be strengthened and be more strategic, particularly given the growing portfolio of regional activities. Two speakers clarified that strengthening of Bank support should be focused on quality and not on volume, noting the value and importance of regional analytical work in some Regions, such as the Middle East and North Africa Region. A number of areas were identified where the Bank could do more on a regional basis, including large-scale transport infrastructure, trade facilitation, natural resource management, energy supply, communications, and health.
Country Ownership as Basis
Speakers stressed that regional programs should be based on strong ownership and commitment of participating countries, noting that these factors were critical to their success and sustainability. A few members also suggested that there needs to be some country within the region willing to take on a large role and responsibility in regional programs to ensure success and sustainability. Some speakers stressed that regional programs should be demand-driven, and the Bank could help build, but not impose, country ownership. Speakers observed that country ownership involved addressing the political context, national policies, and strategies integrating regional issues, as well as capacity building and more use of national and regional institutions. Management remarked on the need for patience to tackle issues of regional political economy and capacity building of regional institutions. As for integrating regional issues into national policies and capacity building of regional institutions, staff elaborated on the Bank's approach in Africa, where it was developing regional programs within the country-based approach. The Bank, along with other development partners, is focused on supporting Africa's intent to develop more effective institutional arrangements to facilitate progress on regional integration. Management noted that regional poverty reduction strategies have been developed in West and Central Africa and others were expected. However, the incorporation of regional issues into national strategies is as yet limited, chiefly due to the limited ability of many regional institutions to put together priority programs. Management also said that it was working with and providing capacity building support to regional institutions such as NEPAD.
Approach to Regional Initiatives
Given the complexity of regional initiatives, in particular regional partnerships, several speakers encouraged flexibility and innovation of Bank support. Accordingly, the Bank may work through regional institutions, act as a convener and work with a coalition of national institutions, or to establish a mechanism or institution to implement a regional activity. IEG staff said the evaluation had found that different models can work. Although working with existing institutions had in many cases proven to be an asset, some successful programs have involved institutions newly created for the purpose. Management stated that, in its view, the Bank has a comparative advantage among development partners in supporting regional programs. The Bank's engagement in policy dialogue at the national level helps it support countries in achieving the policy alignment they need for many regional solutions to be feasible.
Members encouraged Regional departments to consider developing a Regional program strategy, particularly where cross-country approaches are actively being pursued. Staff representing the different Regional departments briefed the Committee on Bank support to regional initiatives. The Committee noted the different emphasis placed and the diversity of Bank assistance in each Region, including that East Asia and the Pacific has remarkably fewer regional programs. In response to the oral briefings on current initiatives, a few speakers wondered whether further lessons may be distilled across regions to inform future initiatives, such as lessons emerging from the Caribbean region that may be applicable to the Pacific region. IEG replied that there are more lessons that could be drawn through the 19 program evaluations it reviewed, but which could not be included in the short synthesis report. IEG also suggested that the monitoring and evaluation processes, including Project Implementation Completion Reports, could contribute more to drawing lessons. Speakers felt that, when appropriate, regional dimensions should be better integrated into relevant Country Assistance Strategies to ensure a consistent and coherent link between the two.
Design of Regional Programs
Some speakers affirmed the IEG evaluation's findings about the importance of clarifying the respective roles and accountabilities of national and regional actors. A few speakers also supported more cost-benefit analysis, although a member also noted the difficulties of determining this up front. The need to consider the evaluation methodology and appropriate indicators to capture regional impacts was raised.
Financing Support
Some members highlighted the need for adequate financing for regional initiatives and observed that one of the Bank's comparative advantages is the investment support it can provide to regional projects. Noting the limitations to financing through the IDA14 regional pilot program, several speakers suggested this matter be reviewed during the IDA15 replenishment. The need to improve the allocation of grant resources for regional initiatives, including through the Development Grant Facility and other funds, was also raised. Others encouraged public-private partnerships and leveraging private sector funds to support regional initiatives, especially large-scale investments such as for infrastructure. Although the Bank is making an effort to mobilize funds, management remarked that co-financing partners were facing similar challenges as the Bank in terms of appropriate instruments for regional initiatives. A coordinated World Bank Group approach to include effective use of IFC and MIGA resources for regional programs was considered important; staff provided examples of cooperation with IFC and MIGA in the Africa Region.
Aligning the Organization
A number of speakers emphasized the need to address institutional incentives and capacity issues to ensure effective support to regional initiatives; management agreed to this point. In this regard, a speaker mentioned that the Bank's Operational Manual needed to be reviewed. A member also proposed that the Bank establish a single source of information or database on regional programs, which currently does not exist; this proposal was one of IEG's recommendations.
Donor Coordination
Several speakers urged greater harmonization and coordination among donors (including regional development banks) to support regional initiatives. A speaker also suggested more cooperation and coordination with the IMF. Management responded that discussions were ongoing on the possible extension of the Paris Declaration to include regional programs. While the Bank is working with the IMF on some specific initiatives (for example, CARICOM, co-funded TA on economic management), management noted that a more systematic approach to working with the IMF would be beneficial. |
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