APPENDIX 17
Memorandum submitted by World Vision
AFTER THE PARTY IS OVER: POLICIES FOR POVERTY
REDUCTION AFTER THE ANNUAL MEETINGS OF THE WORLD BANK AND IMF
The demonstrators and delegates may have departed
from Washington, but the task of carrying forward the decisions
of the Annual Meetings of the World Bank and IMF will have an
impact for many years. The meetings generated much discussion,
particularly on the two issues of sovereign debt restructuring,
and the fact that HIPC has done little to reduce debt repayments.
The controversial nature of these discussions cast into shadow
some of the less high-profile issues on the agenda. Nevertheless,
these lower-profile policy matters will have profound significance
for development policy in the future. World Vision would like
to highlight three areas that will need careful scrutiny.
MANAGING FOR
DEVELOPMENT RESULTS:
On 28 September the Development Committee of
the World Bank and IMF accepted a paper proposed by the World
Bank on adopting a more results-based approach to its work. The
committee endorsed:
The overall approach set out for discussion today
for making results central to the management of development programs
in both developing countries and in development agencies. We urged
the Bank to expedite implementation of the action plan for increasing
its results orientation and to intensify its work with multilateral
and bilateral partners to share information on planned and ongoing
country development activities, including diagnostic work and
operational support, as a basis for enhanced alignment of donor
support for national development strategies[88]
The action plan, attached as an appendix to
the paper, commits the Bank to implementing a results-based approach
in both its Country Assistance Strategies (CAS), and also country-owned
Poverty Reduction Strategy Papers (PRSPs). Such changes entail
a significant shift in the Bank's own corporate culture, for the
results in question cannot be framed around loan volumes or repayments,
but instead will be based on Millennium Development Goals (MDGs).
The Bank has therefore made clear that new methodologies and some
testing must take place to make its lending results-based.
To address the need for a change in corporate
culture, the "Results" paper committed the Bank to "review
staff incentives and revise as necessary to reflect enhanced results
focus." The paper reflected that
Focusing Senior Management and Board attention more
systematically on results—via corporate reporting and other
vehicles—will send powerful signals to staff and middle
managers..... At the same time, considerable proactivity is needed
to ensure a consistent and coherent approach and to correct disincentives
that staff may perceive in current human resources and budget
policies[89].
"Considerable proactivity is needed"
because the Bank for years has encapsulated a macho lending, or
"approval," culture that equated high loan volumes with
success. Those loans funded programmes that would be completed
long after the staff in question had moved on to other work. The
results of loans therefore often had little relationship to the
performance evaluation of key personnel involved. The decision
to finally replace the lending culture with a poverty reduction
culture is potentially a significant step forward, but as so often
with the Bank the devil will be in the details.
Real challenges must be overcome if a results-based
approach is to take hold in the corporate culture of the Bank.
As an operational development NGO, World Vision is aware that
external factors such as the role of local government policy or
changes in the international trade environment make monitoring
results more complex. Operational NGOs, particularly those such
as World Vision, that operate programmes encompassing large geographic
areas, have had to address such issues. World Vision's experience
is that these issues can be addressed through the programme planning
and evaluation cycle, partly by developing key indicators that
can be tracked across large areas.
For the World Bank these challenges are on a
larger scale, yet some foundations have been laid—if the
Bank builds effectively on its past experience. The World Bank
has in recent years invested significantly in developing capacity
and expertise in a range of poverty diagnostic tools. These include
qualitative and quantitative tools, such as integrated household
surveys, participatory poverty assessments, and quantitative service
delivery surveys. This experience must be applied directly to
staff performance for a results-based approach to work effectively.
The Bank itself has noted that to "track progress on results,
effective monitoring and evaluation systems are key," yet
the potential for manipulating figures is very real.
When data collection systems are determined
they must also be continual. Time lags do exist between programme
interventions and poverty reduction, but some positive changes
would be expected within the normal time-frame on which Bank staff
work on individual countries. The Bank must therefore tie its
new incentives and disincentives for staff to changes in poverty,
health and education indicators over real time. A challenge for
the Bank will be to ensure that this does not lead to short-term
decisions based on artificial increases in human development figures
at the expense of long-term progress. Data-collection systems
should be complemented by sustainability indicators to ensure
that those short-term movements reflect real underlying change.
Using time-frames that relate current staff
appraisals to current movements in key poverty indicators could
benefit methodologically from an approach that seeks wider input
on the performance of country offices. The Bank has talked about
citizens' "score cards" to rate the performance of national
governments in implementing their PRSP. Adopting a "results-based
approach" is an ideal time to explore and develop options
for citizens' and civil society score cards on the Bank's own
country office and CAS.
World Vision welcomes the decision of the Development
Committee to accept the "Results" paper, and calls for
implementation of the action plan.
RECOMMENDATIONS:
1. Time-frames and Tracking: The time-frames
used for assessing performance against results must enable an
effective link between performance and poverty reduction in the
country/ies on which they are working. Tracking should therefore
be continual, to allow a staff-person's performance to be equated
to real movements in key indicators within the period of their
work on particular country/ies and programmes.
2. Participatory appraisal: The Bank's support
for an citizen's report card approach is welcome and the same
principles should be applied to the work of the Bank.
PROGRESS ON
PRSPS
The Development Committee reviewed the latest
progress report from the Bank and Fund on the experience of PRSPs,
which it concluded had:
confirmed the broad findings of the joint Bank/Fund
review earlier this year. The Committee is encouraged by the increased
momentum in countries' efforts to develop and implement their
PRSPs. We call on the Fund and Bank together with all donors to
align their support with country PRSPs and to collaborate with
each other to: strengthen their analysis of the sources of growth;
streamline conditionality; help countries improve their public
expenditure management systems; facilitate an environment conducive
to private sector development; and intensify efforts to help countries
undertake poverty and social impact analyses on a more systematic
basis.
The Development Committee communiqué
was a reminder that the work of persuading all major bilateral
donors to fully embrace PRSPs is not yet finished, and reflected
the four major challenges discussed within the progress report.
The progress report[90]
nevertheless takes an optimistic tone. Summaries of progress with
participatory processes and parliamentary involvement might be
seen as over-optimistic, as is the discussion of civil society
involvement in public expenditure management. Fortunately, there
is realism in relation to the continuing challenge posed by lack
of alignment between PRSPs and the macroeconomic framework set
by a country's PRGF.
Yet it is section IV of the progress report
that deals with perhaps the most important constraint on the development
and implementation of PRSPs—country level capacity. The
report notes that capacity building to overcome the problems that
have dogged PRSPs is not just a technical exercise, but relates
directly to the political-economy of the country in question.
When PRSPs seek to not only improve social delivery but also improve
rule of law, governance, and participation, it is inevitable that
the capability of the state will become a crucial dynamic.
Enabling countries to be more effective in responding
to the needs of their citizens is often a question of changing
institutional culture—for instance, strengthening rule of
law is not just a question of judicial reform, but also of political
will. The capacity building challenge for the World Bank and IMF
is therefore integrally linked to strengthening the values of
public service that underpin institutional commitment, a challenge
that hinges upon finding an agreed framework for respecting the
needs, dignity, aspirations and expectations of the poor.
One clear framework accepted to some degree
by all PRSP countries is that of human rights (all have ratified
international human rights instruments), and World Vision has
long advocated for adopting a rights-based approach to PRSPs.
A rights-based approach would provide a normative framework for
PRSPs and also for capacity building. It also offers a basis for
consensus in the dialogue among development partners, and a safeguard
for assessing the appropriateness of the impact of individual
programmes and policies.
Of immediate concern, however, is the question
of how the World Bank and IMF will assist with capacity building
those countries that have already identified human rights as critical
to the institutional culture change that they need to secure.
One PRSP country has rightly identified human rights as one of
three key steps to achieving rule of law (the others are judicial
reform and Parliamentary scrutiny). Two countries have expressed
the desire to internalise their international commitments on human
rights in domestic legislation. Beyond this, all PRSPs countries
have signed the Convention on the Rights of the Child, and most
have signed the Convention on the Elimination of All Forms of
Discrimination against Women.
The World Bank and IMF must determine urgently
how they will assist PRSP countries in converting these policy
commitments into widespread awareness and respect for rights within
the public sector. Achieving the institutional culture change
so critical to the success of PRSPs is possible only by raising
the ability of PRSP countries to respect human rights.
World Vision welcomes the recognition that country
capacity building must remain a significant priority, and we believe
that an essential element within this process should be assistance
in the area of human rights.
RECOMMENDATIONS:
1. Rights-based: PRSPs should be rights-based,
and countries with completed PRSP documents should consider adopting
a rights-based approach to implementation.
2. Capacity Building: The World Bank (including
the WBI) and the IMF must accept their responsibility to assist
countries to implement their policy decisions on human rights,
as expressed through their commitments to international human
rights conventions.
LOW-INCOME
COUNTRIES UNDER
STRESS
In the programme of meetings for civil society
that now surround the Annual Meetings was a consultation on a
new strategy that has been developed within the Bank since November
2001. The discussion was aimed at reviewing the publication of
the report of the World Bank task force on low-income countries
under stress (LICUS). The LICUS report[91]
has been much anticipated, as it deals with some of the most intractable
development problems of recent years. Many of the LICUS countries
are suffering or emerging from conflict, while others have chronic
problems of weak governance.
The working group, with members drawn from within
and outside the Bank, sought to emphasise realism by stressing
the achievement of a few key reforms rather than pressing for
wholesale change. This drive for realism may at times have led
to the acceptance of counter-productive short-cuts rather than
persevering with a more complex but difficult path. The group,
for example, concluded that LICUS countries might undertake no
more than a rudimentary PRSP process, with participation made
difficult by the context.
World Vision's experience as an operational
NGO working in many countries suffering or emerging from conflict
is that it is in just such contexts that participation becomes
critical to sustainability. While governments in LICUS countries
may be reluctant to undertake a truly participatory process, the
potential for a national dialogue on poverty reduction to aid
in peace-building should spur donors and the Bank to prioritise
capacity building of both government and civil society.
Perhaps one of the greatest contributions that
the Bank can make to long-term stability and human development
within these contexts is to engage rigorously with the task of
fostering a positive environment for local civil society development.
Investing in local organisational capabilities by the Bank, donors
and international NGOs is critical. Such investment will also
be a key determinant of whether the goals and approach suggested
in the Bank's own Empowerment Sourcebook can be realised.
The LICUS report also places great stress on
delivering basic social services to the poor, and suggests that
NGOs might be more widely used as a "retail" mechanism
in service delivery. The recommendation that NGOs become a more
prominent partner in Bank programmes is interesting and to a large
degree welcome.
Even so, the Bank must first address two significant
problems that NGOs have encountered when seeking to operate in
contexts in which the Bank is a grantor. Firstly, World Vision
documented many of the issues in Bank-funded programmes of bureaucracy
and delays nearly a decade ago, based on HIV/AIDS programmes in
Uganda. Many of the same issues were still characteristic of working
with the Bank in considerably more recent programmes. The use
of external (often ex-Bank) consultants to devise unworkable development
strategies that are then handed to NGOs to implement is also deeply
problematic. If NGOs are to be partners in implementation, then
they must also have a role in strategy development and planning.
Secondly, there is a need for the Bank to avoid
the gap-filling problems of the 1980s and 90s, with NGOs replacing
state provision and, in the process, undermining government capacity
and overall policy coherence. Where NGOs do work in Bank-funded
programmes in LICUS countries, there is an onus on the Bank to
ensure that the role of the state is not further marginalised.
When appropriate, NGOs should be required to work to build the
capacity of local government institutions, particularly in the
health and education sectors, and a coherent national policy for
social provision (ideally a PRSP) should be devised and maintained.
The Bank clearly envisages that LICUS countries
will be prominent in taking advantage of the facility within IDA13
for enhanced use of grants rather than loans. The Bank also envisages,
however, that LICUS countries may be the focus for programmes
that prioritise knowledge (ie, capacity building) over funding.
World Vision greatly welcomes the commitment to capacity building
and knowledge transfer to LICUS countries, yet the motivation
for effective programming in this area is likely to depend on
also receiving funding.
A serious underlying problem is the question
of the Bank's own staff and approach. The LICUS report states
that:
Because most LICUS have limited lending and analytic
programmes compared to typical low-income countries, they provide
little challenge for country team members. Indeed, it is sometimes
difficult for country directors to compose a country team for
a LICUS. The bulk of country interaction may be very difficult
process tasks, dialogue, hand-holding, informal capacity building,
and maintaining good Bank-country relations—all of which
are crucial in LICUS but difficult to capture and thus to reward.
[92]
World Vision welcomes the LICUS report, endorses
the view that weakly performing states should focus on a small
number of critical policy targets, and believes that these policy
targets should be poverty focused.
RECOMMENDATIONS:
1. Policy Coherence: To facilitate co-operation
by all development actors in a LICUS country (including NGOs)
and also to assist in building absorption capacity for aid, a
coherent national plan for poverty reduction must be a priority.
Ensuring that these national plans are the product of participatory
processes can also foster a greater sense of national inclusion.
Undertaking a participatory and inclusive process to develop a
national poverty reduction strategy should therefore remain a
central aim of the World Bank within LICUS contexts.
2. Co-operation with NGOs: Expanding the
scope for co-operation with NGOs is welcome, but can only be made
practical if there is first a commitment to review and reform
current procedures for programme partnerships with civil society.
Including civil society within programming must not be done at
the expense of government capacity building or overall poverty
coherence, and special care should be taken in this regard.
3. Empowerment: The Bank must not de-prioritise
participation and empowerment in difficult contexts. The potential
benefits of an inclusive PRSP process and the contribution to
national life that can be made by vigorous civil society both
demand investment in local organisational capabilities. World
Vision recommends that assistance to civil society development
and a commitment to participation should be central hallmarks
of an LICUS programme.
World Vision
October 2002
88 Development Committee Communique, Washington D.C.,
28 September 2002. Back
89
"Better Measuring, Monitoring and Managing for Development
Results," World Bank/IMF Development Committee, DC2002-0019,
18 September 2002. Back
90
"Poverty Reduction Strategies (PRSPs)-Progress in Implementation,"
World Bank and IMF Development Committee, DC2002-0016, 13 September
2002. Back
91
World Bank Group Work in Low-Income Countries Under Stress: A
Task Force Report, World Bank, Washington, September 2002. Back
92
LICUS report page 40. Back
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