bern , september 27th, 2010
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IEG INDEPENDENT EVALUATION GROUP. World Bank Budget Support to IDA Countries Anjali Kumar Independent Evaluation Group, World Bank Presentation to the Swiss Development Corporation. Bern , September 27th, 2010. PRSCs reflected the Bank’s response to shift s in the aid paradigm. - PowerPoint PPT PresentationTRANSCRIPT
1Bern, September 27th, 2010
IEG INDEPENDENT EVALUATION GROUP World
BankBudget Support toIDA CountriesAnjali KumarIndependent Evaluation Group, World Bank
Presentation to the Swiss Development Corporation
PRSCs reflected the Bank’s response to shift s in the aid paradigm
2
Anchored in country-owned development strategies
Implementation through country systems
Responsible fiduciary environments
Explicit poverty-oriented growth
Pro-poor service delivery
From 2001-09, 99 PRSC operations were approved
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080
5
10
15
20
25
24
8
13
20 2018
19
2 2
7
10
17
15
19
15
3
…worth $8 billion, in 27 countries
Countries with ongoing PRSCs
New PRSCs approved
From 2001 to September 2009, 99 PRSC operations were approved
20 more operations ($1.7billion) under preparation (for FY10)
One-fourth of Bank policy lending but 30-40% of disbursements to PRSC countries
But PRSC share of country budgets is declining (7 % in 2001; 1.5% in 2008)
Introduced under Interim Guidelines in 2001
…PRSCs were not a separate instrument after 2004, but the PRSC label retains many distinguishing features:
► Built around credible poverty reduction strategies
► Broad-based programmatic support
► For better-performing IDA countries
► Oriented toward poverty-reducing growth
4
1. PRSCs improved aid processes
Enhanced country ownership
Eased conditionalityBetter predictabilityMore pro-poor service
delivery2. Growth and poverty
outcomes are unclear Weak Results frameworksPartial Support to Sectors
3. Other Policy Based Lending converged to a similar design
5
Three Key Findings
Inputs
• Predictable medium term resources
• Aligned with country needs
Outputs
• Implementation of PRSP• Improved accountability• Enhanced donor
harmonization
Outcomes
• Effective public administration
• Improved climate for growth• Better pro-poor service
delivery
Impact• Sustained growth• Reduction of poverty
Evaluation Results Chain
6
PRSCs improved the
aid process
7
PRSCs were expected to ease aid processes
8
• Eased conditionality
• Increased flexibility
• Greater predictability in volume and frequency
• Better alignment with client budget cycles
• Improved vehicle for donor harmonization
Eased conditionality -
9
…conditionality declined in all policy lending
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
0
10
20
30
40
50
Conditions in Bank adjustment loans, FY1980 -- FY2008
Ave
rage
# o
f con
ditio
ns p
er o
pera
tion
28 383336303842 3228 23483629292727 323032322931 23161699 144
2 1916171072 15
PRSC legal conditions
Non-PRSC legal conditions
Eased conditionality -
10
…conditionality declined in all policy lending
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
0
10
20
30
40
50
Ave
rage
# o
f con
ditio
ns p
er o
pera
tion
Conditions in Bank Adjustment loans, FY1980 -- FY2008
28 383336303842 3228 23483629292727 323032322931 23161699 144
2 1916171072 15
PRSC program benchmarks
Non-PRSC program benchmarks
More flexibility in interpreting conditionality…
PRSCs introduced ‘triggers’ -- indicative prior actions in place of legally binding tranche release conditions
Triggers between FY01 and FY08:• 59% met• 15% downgraded• 9% amended• 8% dropped• 9% replaced/postponed
Sometimes new prior actions were included
11
More lending for social services and public sector management…
12as did other DPLs
Education
Finance
Health
Ind. & Trade
Public sector
0% 10% 20% 30% 40% 50% 60% 70%
non-PRSC PBL (IDA) FY95-00 - 92 projects
Education
Finance
Health
Ind. & Trade
Public sector
0% 10% 20% 30% 40% 50% 60% 70%
PRSC (01-08) 87 Operations
Education
Finance
Health
Ind. & Trade
Public sector
0% 10% 20% 30% 40% 50% 60% 70%
non-PRSC PBL (IDA) FY05-08 - 57 projects
More predictable resources …
Burkina Faso is a good example…
13
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
0
10000000
20000000
30000000
40000000
50000000
60000000
70000000
80000000
90000000
100000000
Q4
Q3
Q2
Q1
PRSC 1
PRSC 2
PRSC 3
PRSC 4
PRSC 7
PRSC 6
PRSC 5
PRSC 1
PRSC 2
PRSC 3
PRSC 4
PRSC 7
PRSC 6
PRSC 5
PRSC 1
PRSC 2
PRSC 3
PRSC 4
PRSC 7
PRSC 6
PRSC 5
PRSC 1
PRSC 2
PRSC 3
PRSC 4
PRSC 7
PRSC 6
PRSC 5
PRSC 1
PRSC 2
PRSC 3
PRSC 4
PRSC 7
PRSC 6
PRSC 5
PRSC 1
PRSC 2
PRSC 3
PRSC 4
PRSC 7
PRSC 6
PRSC 5
PRSC 1
PRSC 2
PRSC 3
PRSC 4
PRSC 7
PRSC 6
PRSC 5
PRSC 1
PRSC 2
PRSC 3
PRSC 4
PRSC 7
PRSC 6
PRSC 5
A steady volume of disbursements, in the same quarter per series…
Budget support through PRSCs complemented sector lending…
14
…Replacement was rare
Many tried to channel sector lending through the PRSC:
• Of 15 CASs in health and education, only 2 achieved sustained results
• Of 6 CASs in nutrition, water supply, agriculture or environmental management, 1 on a sustained basis
Weak but improving results frameworks
Need for:Clearly defined indicatorsBaseline data Consistent over timeIntermediate milestones
Shortcomings due to:Weak upstream PRSPs/ CASs Multi-donor process differencesModest M&E frameworks, often reflecting weak country statistical capacity
15
PRSCs improved donor harmonization
16
Sometimes as a focal point for donors
Often as member of a multi-donor group
Harmonized common donor matrices and alignment with the national plans
Reduced transaction costs for recipients
Provided Bank expertise to recipients and other donors
Bank harmonized more missions than other donors in PRSC as well as non-PRSC countries, especially weaker IDA countries
Donor harmonization challenges remain
Limited integration of PRS reviews with the joint matrix (PAF)
Initial perception of increased conditionality
Increased transaction costs for Bank (e.g. Mozambique, Ghana)
Some loss in Bank relevance alongside undue influence of small donors
17
PRSC Outcomes –
Public Financial Management
Easier objectives accomplished
18
Most PRSCs achieved their PFMP reform objectives, with minor shortcomings
Reforms well grounded in diagnostics led to well sequenced strategy agreed with donors
Program achievements were in easier areas (e.g., budget classification reform)
More difficult reforms show less success (e.g.bringing extra-budgetary funds and donor funds on budget; timely resource transfer to sector ministries)
19
PRSC Outcomes in Growth and Poverty Alleviation…
are difficult to establish
20
1985-1999 2000-2007
Per Capita GDP growth
PRSC countries 0.8 4.2
Better Performing Non-PRSC 0.5 3.3
All IDA countries 0.2 3.0
21
Attribution to the PRSC is difficult
PRSC countries grew faster in the PRSC period…but so did other
countries
Poverty Rates for PRSC and Non-PRSC Countries (% of population below $38 per month)
PRSC countries
(20)
Better performing non-PRSC
(24)*
Non-PRSC counties
(36)
All IDA countries
(56)
% change (1984-99) -16.2 -12.6 -2.1 -7.8
% change (1999-2005)
-19.3 -13.0 -10.8 -14.1
but the decline began before the PRSC was introduced
PRSC countries had more income poverty reduction…
22
PRSC Countries had greater progress with Millennium Development Goals…
PRSC and Other Countries: Millennium Development Goal Achievement
Difference (%)(% of population) (1990/1–2000/1) (2001–06)Primary enrollment, net PRSC 9.7 14.8 All IDA countries 11.6 9.1Infant mortality (per 1000) PRSC -19.0 -13.3 All IDA countries -14.5 -9.6Access to safe water PRSC 20.2 7.3 All IDA countries 12.6 4.8
…and progress was faster than before the PRSC period …and faster than all IDA countries in the PRSC period
23
Poverty rates declined in PRSC countries although attribution is
difficultIncome poverty rates fell faster in
PRSC countries, in the PRSC period, but also fell faster prior to the PRSC
In non-income measures of poverty PRSC countries did better, and improvement in the PRSC period was faster
Yet most PRSC programs do not trace links between actions and poverty outcomes
Parallel sector projects increase the difficulty of attribution
24
Evaluation Recommendations
1. Underpin PRSCs/DPLs with comprehensive pro-poor growth diagnostics
2. Strengthen results frameworks, link with underlying PRS; increase poverty focus
3. Focus sector content on high-level or crosscutting issues
4. Further simplify the language of conditionality and eliminate the term ‘triggers’
5. Synchronize Bank’s internal processing with country and donor processes to enable greater ‘voice’ for Bank in multi-donor budget framework
6. Phase out PRSC “brand name” or clarify when it is to be used25
IEG INDEPENDENT EVALUATION GROUP
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Thank You!www.worldbank.org/
ieg/prsc