2008 Shared Global Challenges Annual Review of Development Effectiveness Shared Global Challenges Thomas O΄Brien Lead Economist ODI, London October 6, 2008

2008 Shared Global Challenges Annual Review of Development Effectiveness Shared Global Challenges Vinod Thomas Director-General, Evaluation ODI, London October 6, 2008

2008 Shared Global Challenges Annual Review of Development Effectiveness Shared Global Challenges Thomas O΄Brien Lead Economist ODI, London October 6, 2008

Evidence on the World Bank’s efforts on two important and interconnected areas: Part I: Tracking Bank Performance Part II: Shared Global Challenges

The share of Bank lending meeting targeted development objectives improved over the medium term 90% 80% Share of projects with outcomes moderately satisfactory or better 70% by number of projects weighted by value of project disbursements 60% 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Last Exit FY of 3-year rolling average

Share of Projects in Rating Category Percentage point change Most of the improvement is at the “middle-ground” Share of Projects in Rating Category IEG rating of projects meeting development objectives FY98-02 FY03-07 Percentage point change Highly satisfactory 6% 4% -2 Satisfactory 45% Moderately satisfactory 21% 29% +8 Moderately unsatisfactory 9% 10% +1 Unsatisfactory 16% -6 Highly unsatisfactory 2% 1% -1

Performance by economic sector varies significantly 40% 50% 60% 70% 80% 90% 100% Environment Economic Policy Energy Bankwide Rural Water Finance Transport Social Improvers - Some sectors experienced a significant turnaround – Water Supply and Sanitation improved dramatically - Others, such as Health, Nutrition and Population as well as Public Sector Governance have suffered FY03-FY07 FY98-FY02

Performance by economic sector varies significantly 40% 50% 60% 70% 80% 90% 100% Education Urban Public Sector Governance Health Decliners - Some sectors experienced a significant turnaround – Water Supply and Sanitation improved dramatically - Others, such as Health, Nutrition and Population as well as Public Sector Governance have suffered FY03-FY07 FY98-FY02 8 8

Performance improved across all Regions Sub-saharan Africa especially large uplift, but still lags behind - Some sectors experienced a significant turnaround – Water Supply and Sanitation improved dramatically - Others, such as Health, Nutrition and Population as well as Public Sector Governance have suffered

Project performance dropped significantly in FY07 100% 90% 80% moderately satisfactory or better Share of projects with outcomes 70% - Project performance dropped significantly in FY07: from 83% of projects meeting objectives to 76% - While a one year change should not be alarming in itself, the Bank should be vigilant to ensure this is not the start of a persistent decline 60% 50% 40% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Exit FY 10 10

Five factors have influenced weak project outcomes: Overly complex (not matched by capacity) Overly ambitious Delays in implementation as circumstances changed Weak results framework Poor Bank performance, including weak supervision No single reason for poor performance in FY07, but projects were hampered by five key factors:

A big “disconnect” between the World Bank’s self-ratings during implementation and IEG’s ex-post evaluations 2005 2006 2007 The “disconnect” between the Bank’s self-ratings during implementation and IEG’s ex-post evaluations was over 17 percentage points The largest disconnect since 2001 More than double the disconnect of each of the past two years 7.1 points 8.5 points 17.2 points

Overoptimism impairs real-time “managing for results” Unsatisfactory outcomes unanticipated during implementation Poor performance flagged in real time 29 percent (13 projects) 71 percent (32 projects) 45 unsatisfactory projects in FY07 Overoptimism in assessing ongoing project performance has impaired real-time “managing for results”

Securing strong development outcomes at the country level is more challenging The Bank succeeded in supporting moderately satisfactory or better outcomes in the countries housing a majority of the world’s poor, includes Brazil, China, India, and Indonesia. Indeed, not a single country program has been rated at the highest level since FY02 Not a single low-income country program has been rated even satisfactory since FY02

Two lessons for better tracking of World Bank performance: Practical steps to ‘close the disconnect’ and improve M&E Strengthen the evaluation knowledge base for the Bank’s corporate results. Practical steps are needed to put in place good baseline information, elucidate clearly the linkages between outputs and outcomes, and simplify results frameworks. The Bank and IEG should strengthen the evaluation knowledge base for the Bank’s corporate results.

Evidence on the World Bank’s efforts on two important and interconnected areas: Part I: Tracking Bank Performance Part II: Shared Global Challenges

Shared Global Challenges The World Bank focuses on five main strands: Environmental commons Communicable diseases International trading regime International financial architecture Global knowledge for development Goods that are “non-rival”, “non-excludable,” and global in scope, requiring collective action For the Bank, these include:

Why examine these shared global challenges now? The fight against poverty is increasingly intertwined with shared global challenges The Bank has promoted fostering global public goods in its new strategy 18

The Bank’s country-based model is a double-edged sword In some circumstances it works well . . . In others it comes under strain . . . It works well when: National partners see an alignment between domestic and global benefits The Bank has an attractive instrument to help implement action at the country level The country model comes under strain when: Global and country interests are seen to diverge significantly The Bank’s traditional tools, including lending, do not gain traction with clients

Sector and regional strategies The Bank’s attention to global public goods wanes from high level strategies downwards Corporate strategies Sector and regional strategies Country strategies

Financing instruments Global programs Three levers for the Bank in moving from strategy to action at the country level Resource allocation Financing instruments Global programs

The experience with advocacy on: Beyond country support— the importance of advocacy The experience with advocacy on: International trade Avian influenza Environmental commons A more equitable trading regime supports poverty reduction The Bank’s advocacy at its best, including the following ingredients: Long period working directly with partner countries Assembly of first-rate analytical research capacity Proactive and highly visible dissemination

Global Advocacy: Global programs Developing country voices remain under- represented in governance The new climate change programs must ensure sound and equitable governance Governance arrangements in some programs, including GEF and CGIAR, have improved

Lessons from Experience Will you still need me? Will you still feed me? When I’m . . . Sixty Four -Where national and global interests coincide, often with an agreed international framework for action -Where grant finance supports country investments

How can the World Bank improve its support for shared global challenges? New approaches to setting budgets and recognizing performance Clearer organizational arrangements to link together country, regional, and global initiatives Give greater voice to developing countries in the governance of significant global programs Could include setting aside at the corporate level significant administrative funding for country teams working on GPGs Introduce clearer organizational arrangements to best select and link responses at the country, regional, and global levels

Meeting the shared global challenges of our Conclusions Meeting the shared global challenges of our time will be crucial to reducing poverty The Bank’s role—particularly in supporting investments where global and local benefits diverge—is potentially pathbreaking Over the next decade, the success of the international community in rising to the shared global challenges of our time will be crucial to reducing poverty.

2008 Shared Global Challenges Annual Review of Development Effectiveness Shared Global Challenges Thomas O΄Brien Lead Economist ODI, London October 6, 2008

2008 Shared Global Challenges Annual Review of Development Effectiveness Shared Global Challenges Andrew Steer DFID ODI, London October 6, 2008

2008 Shared Global Challenges Annual Review of Development Effectiveness Shared Global Challenges Alison Evans ODI ODI, London October 6, 2008

2008 Shared Global Challenges Annual Review of Development Effectiveness Shared Global Challenges Thomas O΄Brien Lead Economist ODI, London October 6, 2008