Why a Social Development strategy? Data shows social development matters Time to provide more operational guiding principles Need to accelerate the trajectory

Evaluation of social development in Bank activities: themes tracked Community Driven Development Culture Gender Indigenous Peoples NGOs Participation Conflict Resettlement OED study analyzes the portfolio, surveyed relevant documents, and reviewed social development literature. They also conducted a survey of Country Directors and Task Managers OED Review of Social Development in Bank Activities, Operations Evaluation Department (OED]. The World Bank, Washington D.C., May 2003.

OED Finding: social development works! Ratings for Projects with Two, Three, or Four Overlapping Social Development Themes No. of Institutional Percent of total Outcomes (% Sustainability (% overlapping development (% Bank projects satisfactory) likely) themes substantial) 7.9 2 81 62 45 5.0 3 84 63 47 1.5 4 90 64 49 Average Ratings for All Bank Projects 68 50 34 Source: OED 2003, page 24

OED Finding: growing support of social development by Bank staff 96% of Country Directors and 83% of Task Managers participating in OED Survey said Social Development improves outcomes of Bank financed operations Bank Task Managers also said : - Social Development (SD) improves project design through better understanding of the social context - SD clarifies understanding of project impact - SD contributes to sustainability - SD improves relations with clients Above statements self evident to many outside Bank. Not always inside. Rhetoric-reality gap Still a small percentage of projects that include sd features Risks of associating social development with social safeguards “safeguarding against dvlp” Political implications Skills: need for deep local knowledge

What is Social Development? Positive social change Transformation that equips societies to reduce poverty Acknowledgment of interplay of power dynamics, culture, value systems, informal and formal structures of societies No one definition SD promotes positive social change by supporting norms, values and formal and informal rules that, taken together, result in social structures that are inclusive, cohesive and accountable. Social development means development of society, just like economic development means development of economy…. Social used different, inconsistent, ways in development field: I.e. Copenhagen declaration includes health and education (social sectors or human development in the Bank)…. The social development family at the World Bank focuses on the social dimensions of development. One issue facing the social development department at the World Bank is clarity of definitions that make sense to us – ie cover all the things we do – and make sense to our non-social development colleagues in the Bank and to our borrowers. Social development is development that is equitable, socially inclusive and therefore sustainable. It empowers poor people to participate effectively in development processes and promotes institutions that are responsive, accountable and inclusive

Assets and capabilities for poverty reduction Institutions: Inclusive Cohesive Accountable Assets Well-being Poverty reduction Financial Social Human Physical Natural

Principles of social development strategy Inclusion. Putting people at the center of development Cohesion. Strengthening communities so people can work together Accountability. Developing ways for people to exercise voice to authorities, and for authorities to respond

Inclusion Inclusive societies promote equal access to opportunities. To move toward this goal, societies must alter formal and informal rules that limit the capabilities of the disempowered and encourage the participation of diverse individuals and groups in development activities.

Cohesion Cohesive societies are willing and able to work together to address common needs, overcome common constraints and consider diverse interests. They resolve differences in a civil, non-confrontational way, promoting peace and security.

Accountable Institutions Accountable institutions are transparent and serve the public interest in an effective, efficient and fair way.They are responsive to people’s needs. Accountability is the obligation of power-holders (those who can exercise political, economic or other forms of power) to account for, or to take responsibility for, their actions.

Strategic objective: accelerate the trajectory Heading in the right direction Portfolio that includes SD increased as has quality of attention to SD issues in other projects 3 Strategic priorities to go further: Strengthen policy dialogue and lending Improve project effectiveness – by mainstreaming and free-standing portfolio Build on foundation of capacity building, advocacy and research

Priority 1: Increase attention to SD in the Bank's policy dialogue and policy-based lending Improve the social development content of policy analysis, working from positive experiences with Poverty and Social Impact Analysis (PSIA) and social capital studies. Strengthen multi-stakeholder participation in development and monitoring of macro strategies (e.g. PRSP, Bank Country Assistance Strategy). Improve content of policy-based lending. E.g., budget transparency conditionality PSIA: Analysis of intended and unintended consequences of policy interventions on the well-being of different social groups, with a special focus on the vulnerable and poor Applies to macroeconomic, structural and sectoral reforms Ex ante, during implementation, ex post Micro, meso, macro Emphasis on maximizing benefits as well as minimizing adverse impacts Examples: Chad cotton, Zambia fertilizer marketing, **PSIA ongoing in 48 countries, of which 38 respond directly to priorities identified in PRSP Country social analysis (Paraguay)/conflict analysis (somalia/civil society assessments (Senegal/albania) **ESW analyses w/ SD focused increased over 50% in last 2 years (20 to 32 fy01-FY03) The social dimensions of poverty reduction are implicit the CDF and PRSP approaches. However, as evidenced by the reviews of PRSPs and CASs (see Section IV) the Bank has a long way to go on using these instruments to enable empowerment, inclusion and security. Thus far, the emphasis has been on participation in the process of preparing the PRSPs and CASs (and even here the experience is mixed). The Bank should Build principles of community-driven development into sectors where we know community involvement leads to more efficient outcomes (e.g. in the delivery of health, education and infrastructure services) Promote devolution of decision making to accountable, inclusive local authorities applying the subsidiarity principle Promote access to information and model this in the process of preparing and monitoring of these instruments Specifically address measures to improve governance and inclusive legal and judicial reform Build participatory monitoring and evaluation and social accountability measures into these instruments. Attention to the social dimension of security (programs to promote it and/or those prevent conflict) would mean that the Bank should: Promoting legal and judicial reform to enable non-violent settlement of grievances Including conflict resolution into community-driven and other programs Be prepared to adjust the modalities of reforms according to the social risk. I.e. privatization of state enterprises may be efficient or may hand over control of assets to a small ethnic minority, which could lead to conflict.

Priority 2: Improve the social development effectiveness of Bank-supported investment projects Improve social analysis including efficiency improvements by relying on upstream work ; Improve multi-stakeholder participation – to include better sustainability and monitoring; Implement social safeguards more effectively; and Improve mainstreaming of SD concerns into Bank-financed projects and project components and nurture SD portfolio. Social Analysis Sourcebook published in late 2003 to provide guidance. More conflict analysis or analysis of specific sector areas. Documentation on social accountability and participatory approaches (from Shouting to Counting)) SD projects projected to increase by 50% in next 4 years and increase in $ volume by triple. Projects with SD theme could double in next 4 years, based on SD theme areas in CASes. Promote local governance aspects (community involvement and local government accountability and capacity building) in infrastructure and human development project  Within public sector management reform projects include measures to improve social accountability and local transparency  Systematically include gender aspects into projects in accordance with the gender strategy Safeguards: build borrower’s capacity to safeguard vulnerable populations; take lessons from a specific resettlement project (Upper Krishna resettlement experience in India) to larger scale—country guideposts

SD portfolio-business areas Social inclusion: projects focused on specific vulnerable groups India Rural Women’s Empowerment Ecuador Prodepine project Cohesion in society: projects focused on conflict prevention and reconstruction Projects funded by the Post-Conflict Fund Croatia Social and Economic Recovery Project Accountable institutions: Community driven development - Indonesia Kecamatan Development projects or the First and Second Palestinian NGO projects Social accountability - Malawi community score card in health projects This would entail either developing new forms of projects with social development objectives, or adjust existing types of projects and programs to include social development objectives – this is likely to entail both different components and different project processing steps.   Develop a portfolio of projects that directly promote empowerment, inclusion and security  Refocus CDD interventions on building local governance, i.e. using the investments in service delivery or infrastructure as a learning by doing exercise to promote better local governance Build community capacity for making decisions and managing resources in a learning by doing mode *** CDD projects up from $325m FY96 to $7.4billion in FY03 ***post conflict recons. Up from $10M in FY90 to $1.4biullion in FY03

Priority 3: Improve Bank’s capacity building and research, and sustain advocacy on SD Improve capacity building: Build capacity of social development specialists, create coalition for social development and train local consultants in providing project support for for social development Improve social development research: Better align research priorities with operational needs by: further exploring links between SD and economic growth, refine indicators for SD, and better evaluate the impacts of SD projects. Sustain advocacy on social development: Based on better aligned research, and clarification of what aspects are pure advocacy and which the Bank will be able to address. Over the years the Bank has recognized the importance of social development and has outlined a very ambitious agenda for itself regarding advocacy on social development issues and in terms of including social dimensions in the operations it supports. The agenda falls in three broad categories:  Advocacy: the public statements made by the Bank. President Wolfensohn, WDR 2005 on equity will include emphsis on social inclusion and cohesion. In our own strategies: (corporate and sectoral, ARDE, LICUS) outlining the global debate on a topic and what the Bank is proposing to do about it; and World Bank operational policies: set standards for what the Bank must do (at a minimum). Project appraisal, poverty reduction, adjustment lending, gender, environmental assessment…. Etc.. Presidential. JDW’s annual meeting and other speeches have highlighted social development themes, especially as the ‘other side of the CDF coin.’ Research and Knowledge: Innovative research with x-sectoral partners For example: What is the research evidence regarding when and to what extent community-driven development is a priority? What are the relationships between social policy and investment climate and growth? To what extent can and should the Bank’s conflict agenda be expanded to include street crime, violence, and other issues of personal and physical security? Global social indicators website operational Emerging discussions of youth, disabled, human rights (HR and social accountability)

Implementing the strategic priorities Sustain and deepen ongoing corporate directions; Align World Bank policies, procedures and practices; Strengthen external partnerships; Improve internal collaboration; and Reallocate financial, human and managerial resources. Relying on regional business plans to articulate these Partnerships through UN, bilateral (work on human rights), civil society (intl budget project), UN & DAC/OECD (conflict), JSDF, foundations, Global Fund for Indigenous Peoples, “Social Development Alliance”, knowledge partnerships (with Nordic countries) WB policies: OP on adjustment lending to go “from adjustment lending to development policy lending: Required analytiacal work (PSIA) to address gaps in knowledge, with special emphasis on “poor and vulnerable groups” Encourages consultation with and participation of stakeholders and civil society and sets forth the participation process adopted in the country’s development strategy for preparation and implementation of programs Calls for collaboration with other international partners, as appropriate.

Next steps External consultations – first half 2004 Regional business strategies – third quarter 2004 Finalize Bank-wide business strategy – late 2004 Dissemination after final Executive Directors’ endorsement – early 2005

Your Advice Please…. How can World Bank best implement this strategy? A meaningful vision and appropriate role for World Bank? How can World Bank best implement this strategy? How can we work together? Concluding remarks There is no serious doubt that the ultimate ends of economic policy are in the broadest sense social’” from: UN Secretary General’s Report to the 40th Session of the United Nations Commission for Social Development, February, 2002