The FINANCIAL — Washington D.C. – A new study from the Independent Evaluation Group (IEG) of the World Bank Group (WBG) provides a first integrated assessment of the effectiveness of the three WBG institutions—the World bank, IFC and MIGA.
It traces the WBG’s approach in helping countries reduce poverty as reflected in four core development goals: expanding economic opportunities, enhancing human development, reducing socioeconomic and environmental risks, and strengthening governance and public sector effectiveness.
Based on evaluations conducted in 2008-10, the “Annual Report 2011: Results and Performance of the World Bank Group” finds that a large majority of WBG operations were effective in helping expand economic opportunities in developing countries, particularly through infrastructure development, economic policy reform, and direct investments in real sectors. The report also finds the effectiveness in human development to be lower in the period reviewed, partly due to the increased complexity of objectives such as access to higher levels of education and improving education quality. The recent sector strategies have since sought to address these issues.
The Bank Group’s attention to vulnerability and social safety nets increased substantially in recent years, following the succession of food, fuel, financial crises and natural disasters. These recent shocks, combined with the rising concern for climate-related disasters, have contributed to setbacks to development and threaten progress. Evaluations point to the need for more attention to prevention and preparedness with regards to these crises and natural disasters.
The report highlights the need for good governance and public sector management as fundamental to advancing the other core development goals. Evaluation results show that the World Bank’s overall effectiveness was lower in countries with weaker public sector effectiveness. The Bank was helpful in making progress in some areas of public sector reform, such as public financial management, but less so in other more challenging areas, such as reducing corruption and achieving civil service reform.
The report notes substantial progress in developing countries over the past decade in reducing poverty rates, accelerating the pace of economic growth, and improving key indicators in human development. The proportion of people living in extreme poverty in developing countries declined sharply since 1999, but with vast increases in the total population, the numbers living in extreme poverty were still close to 1.4 billion people.
“Progress has been striking, even as weak governance, poor infrastructure, and inadequate access to finance continue to hamper development. What is more, shocks caused by multiple crises relating to food, fuel and finance as well as the environment and climate change are proving to be fundamental de-stabilizers that must be confronted by development strategies” said Vinod Thomas, Director-General, Evaluation at the WBG.
The study looked at forces underlying these results, with a focus on factors within the control of the three Bank Group institutions. In the World Bank, supervision of projects completed in 2008-10 improved as compared to projects completed in 2005-2007,while their design quality declined somewhat due to inter alia weaknesses in political economy assessments and results frameworks. In the International Finance Corporation (IFC) — the private sector arm of WBG — project work quality was generally high, although evaluations point to the need for IFC to strengthen its upfront project appraisal and structuring. For the Multilateral Investment Guarantee Agency (MIGA), evaluations indicate that the strategic relevance of the operations it supported has been high, while there is scope for improving aspects of work quality.
The report underscores the value of monitoring and evaluation and their follow up for obtaining stronger results on the ground. It notes the progress made by the WBG in measuring results and reporting on them. It also points to areas for strengthening: for example, reflecting better the costs associated with the nature of the growth process; paying more attention in average measures to country differences; stressing the need for better data.
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