Adaptable Program Loans (APLs): Emerging Findings Operations Policy and Country Services June 18, 2002 opcs 1

Contents When to Use APLs Facts and Figures Emerging Findings Outlook

When to Use APLs When there is a long-term vision of sector reform (buy-in from relevant stakeholders)—rationale in PER When there is upfront agreement on the policy framework and triggers—risk management aspects When there is a need for donor coordination under a common strategy

Facts and Figures 112 APLs for $5 billion, or 9% of Bank volumes APLs avg. 10 years compared to 6 years for others APLs avg. 2-3 phases of 3-4 years each APLs avg. $100 mil. per program; $40 mil. per phase

Facts and Figures APLs under implementation: Sectoral share:

Finding: APLs by Type

Findings: PER Work in APLs 88% of APLs approved fell within an IMF program or Bank adjustment program underpinning macro/fiscal policy 84% of APLs had the necessary policy framework in place 62% of APLs are underpinned by recent PER

Findings: Triggers Triggers are mostly of the input/output type, but also of institutional/capacity building and policy reforms—mixed approach too much emphasis on output indicators says too little about progress on institutional/policy reforms too much emphasis on institutional/policy reforms does not say whether reforms are working in practice

Findings: Triggers Triggers are based on tangible and concrete performance targets essential for the success of the program More specificity in triggers helps guide implementation and discourage unambiguous monitoring results Triggers more specific in higher performing countries

Findings: M&E 25% of APLs had the necessary M&E systems in place at the outset of the program (e.g., like having the software but not the hardware to run the program). Most of these were sector-wide APLs. 40% of APLs had the necessary baseline information at the outset of the program. 50% of APLs incorporated M&E in management decision making—mixed record on accountability

Findings: M&E 80 percent of APLs had performance indicators consistent with the APL program and trigger strategy Selectivity of performance indicators important for triggers (most triggers are drawn from performance indicators and in some cases they are the same) APLs forces task manager to think ahead about triggers and performance indicators—their progressive sequencing in time and how they link the different phases to the long-term development program.

Findings: M&E New approaches are emerging in some APLs: Donors and borrowers are beginning to assess performance based on outcome and results at the program level—beyond the project level—and this is happening particularly in some sector wide APLs But still early to tell—not that many second phase APLs around

Findings: Why not many second phase APLs

When to Use APLs When there is a long-term vision of sector reform (buy-in from relevant stakeholders)—rationale in PER When there is upfront agreement on the policy framework and triggers—risk management aspects When there is a need for donor coordination under a common strategy

Outlook Outlook for APLs: APLs here to stay-- will continue growing We continue to learning So far, APLs being used as intended – to support the implementation of long-term development programs. Adaptable Lending: Third Review of Experience (forthcoming).