Early PforR experience – Exchanging views and emerging lessons

1. Early PforR experience – Exchanging views and emerging lessons CGD, Washington DC, November 27, 2012

2. Why did the Bank develop the PforR? • Development Effectiveness and Client Demand –PforR responds to client demand that could not be fully met through existing instruments; it enhances development effectiveness of client programs and of development assistance • Focus on Results –PforR places attention on results through more direct linkage of funding to the achievement of verifiable results and performance actions • Institutional and Capacity Building – By using program institutions and systems, PforR will strengthen institutions/capacity of the whole program • Enhanced Partnerships – PforR provides an opportunity to improve coordination among development partners in government programs

3. How does PforR complement the Bank’s menu of instruments? Implementation Mechanism Funds for specific expenditures Project Lending (IL) Bank IL rules and procedures Funds for non-earmarked general budget support Policy Lending (DPL) Country policy processes Program Lending (PforR) Funds for specific expenditure program Program systems

4. Where are we? • The five first operations were approved by the Board totaling $881 million of Bank financing supporting a total of $2,28 billion of government programs • An additional 15 operations are in the pipeline for approval by July, 2013 • Operations approved to date are in five different regions in a range of country typologies (from fragile states to MICs) • The sectoral breakdown is also diverse with operations in transport, human /social development, urban and so forth.

5. PforR Pipeline Operations Pakistan Nepal India Morocco Mauritania Bangladesh Ethiopia Uganda Kenya Vietnam Brazil Tanzania Uruguay Indonesia Mozambique

6. The five approved Operations

7. Early feedback • …but, risk of falling short of potential? • Concerns about the exclusions • Clients voice concerns about intrusive nature of some aspects especially on right to investigate ‘PforR proves to be useful in different countries and sectors’ ‘shift in the dialogue with government counterparts ’ ‘we appreciate the reduced transaction processes’ ‘game changer’ ‘more interagency dialogue between government agencies ’ ‘extremely welcome’ ‘deeper focus on results’ 7

8. Early findings • DLIs range from outcomes to outputs, processes, and actions depending on the specific nature of the program e.g. Morocco Communities: percentage of girls who reside in the educational dormitories graduating to the next grade Uruguay Transport: cumulative number of kilometers of the Uruguay National Road Network rehabilitated at a minimum quality level Vietnam Water and Sanitation: disclosed provincial annual plan and progress report for each province • Verification arrangements haven been agreed that are acceptable to the Bank and ensure credible verification e.g. Nepal Bridges: reputable firm financed by third party (AusAID) Tanzania Local Govt.: government-contractedreputable firm with TORs satisfactory to the Bank

9. Early findings (cont’d) • In general, the assessments have allowed to open good dialogue about systems, their performance and how best to improve that e.g. Tanzania Local Govt.: in the expenditures area, the technical assessment identified partial budget transfers from central to local governments as a cause for under-performance, and made full transfer a condition of DLI disbursement Uruguay Transport: in the fiduciary area, quantitative indicators were defined to measure the performance of the Uruguay's Road Administration procurement system, and a study to be undertaken to identify the key obstacles to shorter bids evaluation periods, and propose related measures • Grievance/complaint mechanisms have been identified or developed, taking into account the specific nature of the program e.g. Tanzania Local Govt.: mechanism to be put in place by local governments as a Minimum Access Condition to access infrastructure financing Morocco Communities: existing government program mechanisms with specific improvement

10. Early findings (cont’d) • Environmental and social impacts are limited • Category A type activities are not part of the Program scope e.g. Nepal Bridges: 2% of the bridges were excluded given their potential effects on environmentally sensitive areas • PforR Programs are also expected to have positive effects e.g. reduce risk of flooding and soil erosion (e.g. Tanzania Local Govt.), reduced transportation cost (e.g. Uruguay Transport) increased percentage of the population provided with access to improved water supply in targeted rural communes (e.g. Morocco Communities) • Priority Capacity building measures have been included in Programs, linked to specific DLIs and/or included in the PforR operation’s Program Action Plan e.g. Nepal Bridges: DLI #4 Strengthened performance management in bridge sector (percent works complete on schedule) Morocco INDH2: DLI #7 Percentage of provinces and prefectorates in the Program Area which have put in place a plan of action to address audit recommendations

11. Summing up • The PforR instrument has been adapted to varying country and sector contexts • Each operation reflects the nature of the individual Programs in which they operate • Program systems have been assessed as respecting policy requirements, and as being supportive of Program results with improvements as necessary • Overall, risks to results have been assessed to be manageable • Overall engagement and discussions on results and DLIs have fundamentally changed the dialogue between Clients and the Bank

12. Exchange of views and lessons - what’s next? • Want to continue the conversations • Keep the spirit of a learning approach to the instrument • Events include • Internal/external peer learning events (e.g. on results) • 2013 Spring/Annual Meetings events • Exchange of views and lessons by email to OPCSPforR@worldbank.org

13. For more information, please visit http://www.worldbank.org/ProgramforResults