 | Sally Zeijlon of the ECA region speaks to Bank staff at the BBL |
February 28, 2006 – For three decades, the World Bank has been talking about getting rid of project management units—separate entities established in a country for the sole purpose of implementing development projects. Yet, despite many studies showing the need to put project management in the hands of partner countries, PIUs have continued to proliferate.
Is the bell tolling for project implementation units (PIUs)? The Bank is among the 100 signatories of the Paris Declaration, which pledged to reduce project implementation units by two thirds by 2010. And a new guidance note from OPCS calls for the progressive elimination of PIUs.
Hosted by WBI’s Capacity Development unit and OPCS, close to 100 Bank staff assembled on February 15 to debate this critical issue. WB staff shared their views, convictions and misgivings. While most agreed that PIUs usually failed to create sustainable institutional capacity in countries, they admitted that internal incentives in the Bank were still biased in favor of PIUs as a way of getting project implemented on time, with minimal corruption and at expected levels of quality.
Project Implementation Units, or PIUs, are separate entities created by the World Bank to implement development projects. They were created 40 years ago as a technical solution to deliver engineering projects in newly independent developing countries. Over time, PIUs became vehicles to bypass local bureaucracies to ‘get the job done’. Since the Bank’s internal incentives – such as lending cycles that emphasize fast delivery, strict fiduciary requirements and focus on disbursements speed in portfolio monitoring – favor known and tested arrangements for implementation PIUs are used even in countries that have well-established institutions. The Bank has long recommended that stand-alone PIUs be mainstreamed into existing ministry structures, because they are inconsistent with the Bank’s mission of capacity development and institutional strengthening in developing countries. In practice, PIUs vary in size, function, physical location, legal status, degree of integration into existing country structures, and effects on the country’s long-term capacity. For more information on the different types of PIUs please see the new PIU guidance note from OPCS |
The brown bag lunch (BBL) featured three case studies illustrating how enterprising Bank Task Team Leaders have blazed new paths in some very difficult circumstances. Working in three countries where capacity and institutions were considered especially weak, these TTLs have found ways to put the implementation job directly in the hands of government systems. In the case of the Lao PDR transport sector, the positive results have led to calls for spreading this approach to other sectors and other countries.
Staff said the use of PIUs is driven largely by the need to mitigate risks in weak capacity environments but it can also reflect internal incentives such as speed of project processing and disbursement. Many regard PIUs as ‘special cells’ that are created to implement projects by sometimes bypassing local bureaucracies to get the job done. Projects get implemented, bridges and roads are built.
Yet a growing body of evidence suggests that project implementation units are part of the reason that development is not taking hold in many countries. PIUs “do not help build capacity or institutional development, they rather undermine it” said Denis Robitaille, manager in East Asia Region based in Bangkok.
Some project managers worried about the ability of the Bank to ensure that projects were implemented without increasing corruption, especially in those countries where civil service salaries are not adequate. And task managers worry about being able to get the data they need to report on how the project is going.
“In weak country systems one still needs to maintain the leverage on the implementation processes,” said Sahr Kpundeh, task manager for the Institutional Reform Credit Program in Kenya. Nevertheless, Kpundeh managed to construct a project where the project implementation is fully integrated into government processes.
 | Chiyo Kanda shows the new guidance note on PIUs from OPCS |
In another BBL hosted by WBI’s Capacity Development unit on February 21, OPCS Vice President Jim Adams said that task team leaders should develop a greater ‘appetite for risk’ when carrying out projects. In this BBL, DAC’s Chairman Richard Manning and a group of colleagues from OECD (via videolink from Paris) joined Jim Adams and more than 50 Bank staff to discuss the ambitious agenda set forward by OECD/DAC’s paper "The Challenge of Capacity Development: Working towards Good Practice," and the Paris Declaration on Aid Effectiveness.
The PIU Guidance Note cites a study by the MNA region that found that while PIUs have facilitated implementation and monitoring, they failed in terms of positive long-term impact on capacity building. Another study by the Latin America region found the mainstreaming project within government structures actually enhanced administrative and operational coordination with government support.
Among the many obstacles of moving towards the transition from PIUs to integrated project management within government ministries may be the lack of expertise in management and organization among project teams. “Usually missing from the team is someone with an MBA or an organizational and change management specialist who can assess the needs of a given organization and identify solutions,” said Sally Zeijlon, Operations Adviser in the ECA Region.
Several staff said they needed more specific advice on how to handle the complex process of eliminating PIUs. They asked for tool kits, increased supervision budgets and stronger support from management.
 | | Bank staff watch the Lao PDR Transport Sector case study presented by Mr. Denis Robitaille |
Yet, the several participants said that there was no single “tool kit” for designing projects without PIUs. It requires sometime laborious negotiation with the countries and with other donors. The process will vary by country and project because of wide differences in sectors and implementation capacities. Thus, dissemination of good practices should become a priority for the Bank, the participants concluded. Staff can watch the case study videos and see the February 15 presentation. By Nansia Constantinou, Capacity Building Unit, World Bank Institute. |
