The Ethiopia MDG needs assessment: the contribution of the MAMS Caterina Ruggeri Laderchi, AFTP2

The Process Process initiated by the Millennium Project Government asked for WB support on macro – artificial distinction between sectoral and macro analysis “Scenario A vs. Scenario B” controversy MAMS initially perceived as World Bank product – macro constraints would lead to Scenario B Work on MAMS independent from Government process allowed the development of a WB contribution to the analysis

Sectoral Needs Assessment Tasks: Review background diagnostic work on development opportunities, challenges, and prospects re goals Identification of interventions needed and associated targets Challenges: Priorities and their relevance for MDG achievement Inputs combination and unit costs Costing infrastructure needs and more generally tackling the growth agenda No consideration of joint synergies and constraints

The Synthesis Report Tasks: Summarizing sectoral interventions and needs Integrate them into a coherent plan Challenges: Endogenize growth – the plan is to put ET on a different growth path Develop a macro/fiscal framework and estimate the total cost for reaching the MDGs Assess the realism of the NA macro and economy wide implications of scaling up, Provide alternative scenarios Identify optimal phasing and sequencing Consider alternative financing strategies

Role of MAMS MAMS used as an external tool to inform the analysis: Benchmark estimates of overall costs Phasing of different types of interventions Constrained scenarios – implicit trade-offs MAMS not used directly in the Synthesis because: Linking sectoral expenditure to outcomes requires agreement on micro-specifications and relations of inputs with outcomes – MAMS informed by WB sectoral expertise A simpler macro-model was sufficient to check on macro-effects of sectoral plans MAMS retained as an independent WB tool to assess Government strategy

Next steps in Country Dialogue … Integration of the MDG NA in the new PRSP Focus on Reviewing policy, institutional and structural constraints to implementation Translating long term MDG plan into medium term scenarios MAMS, especially if private sector is disaggregated, can continue informing policy dialogue. In the next phase, some sectoral issues may be of particular importance: growth patterns, labor, and income distribution links between aid, trade and income distribution tax policies