Transcript Folie 1

New World,
New World Bank Group
Nancy Alexander
Heinrich Boell Foundation
April 24, 2010
Heinrich Boell Foundation
The green politcal foundation
1638 R Street, NW Suite 120
Washington, DC 20009
202-462-7512
www.boell.de
17. Juli 2015
Scope of this Presentation:
Features of Lending Reform (ILR)
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Operational Risk Assessment Framework (ORAF)
Decentralization
Current loan instruments
The new Results-Based Investment Loan
The Bank as Standard-Setter. Its Ambitions and Claims
Country Systems
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The Framework
has 38 types of
risks in 4
categories
Project level social and
environmental risks
represent 2 of the 38
types of risk. How will
such risks be assessed?
How will country
environmental and social
risks be assessed?
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Decentralization
The “New” World Bank Group will be significantly
decentralized, including several regional hubs which will
take complete responsibility for managing low-risk
projects.
Higher risk projects will receive more attention from HQ.
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Current Loan Instruments
Where do the environmental and social safeguards apply?
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10 Safeguard Policies
These pertain to:
Environmental Assessment, Cultural Property, Disputed
Areas, Forestry, Indigenous Peoples, International
Waterways, Involuntary Resettlement, Natural Habitats, Pest
Management and the Safety of Dams
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Primary Types of Instruments
• Budget support – often multiple donors pool finance to inject
into national budgets. (DPLs/PRSCs.) Rapid disbursement.
Full suite of safeguards* do not apply. Nor does gender
policy.
• Ring-fenced projects: slow disbursement (5-7 years) for
specific stages of project. Full suite of safeguards apply.
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Bank’s Verdict on Ring-fenced Projects
The Bank has decided that the “blueprint” project instrument
“was created for a different era…”* and that it is “being
increasingly criticized inside and outside the Bank because of
its inability to adapt to the varied needs of the Bank's clients
and the inefficiency, rigidity, and insularity of the processes
and requirements that apply to it.”**
*World Bank, “Moving Ahead on Investment Lending Reform,” Risk Framework and Implementation
Support,” September 3, 2009:
**World Bank, “Investment Lending Reform, Concept Note,” January 26, 2009.
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The Future of “Ring-Fenced” Projects
• First, management announced plans to: “replace the rigid
“ring-fenced” project model with a flexible menu of design and
funds flow options to better meet development and funding
needs of IDA’s varied clients.” (IEG, “Internal Controls”
Review, 2009)
• Then, management decided to continue the model, but at a
reduced level.
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What Will Replace Some of the “Ring-fenced”
Projects?
• The Results-Based Investment Loan (RBIL), which is
currently being designed.
• The Board will approve an RBIL concept paper in June
2010.
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What is the Results-Based Investment Loan?
• Sector instrument for scaling up operations.
• Often, a platform for pooled funds.
• Support for on-going or new government expenditure
program.
In addition, the RBIL will:
• Disburse in tranches after results (outputs/outcomes) are
achieved.
• Focus on systems rather than individual transactions.
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Disbursement After Achievement of Results?
How will the RBIL disburse in this manner when most
operations lack a results framework or a satisfactory
monitoring and evaluation system?
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Is the Bank Achieving Results?
No One Knows
In reviewing projects that closed in fiscal 2007 and 2008, IEG
found that only 37% of projects exiting the portfolio received
ratings of high or substantial M&E systems, while the
remaining 63% were rated modest or negligible. Indeed, if
one looks at IEG evaluations of various types of World Bank
work (e.g., environment, gender, health and education), each
one says that results and outcomes are impossible to assess
because monitoring and evaluation or results frameworks are
missing.
*IEG, “Annual Report on Development Effectiveness: Achieving Sustainable Development,” World
Bank, 2009, p. 27
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The Bank’s Ambitions and Claims
• The Bank wants to expand its capital base, administer more
pooled funds, and manage billions in climate investment
funds/carbon funds.
• It claims suitability for these roles because of its high
standards in fiduciary and safeguard areas.
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Is the Bank a Standard-setter in Fiduciary
Policies?
• No. IEG found evidence that the Bank/IDA is violating its
charter re fraud and corruption. (IEG, 2009)
• And, less than half of the Bank’s financial management and
procurement assessment tools contributed to fiduciary
management. (IEG, 2008)
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Is the Bank a Standard-setter in Safeguard
(Social/Environmental) Areas?
• Many of the safeguards are well-designed, but they applied to
only 44% of WBG operations in 2009.
• The full suite of safeguards don’t apply to budget support.
• And…now…the future of safeguards hinges -- in part -- on
whether they will apply to the RBIL. At this point, the Bank
has not decided on what kind of safeguards will apply to this
new instrument.
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Bank Staff Perceptions of Policy Requirements
Many World Bank staff members see fiduciary and safeguard
policies as:
• imposing excessively burdensome and time-consuming
requirements on each operations and, thus,
• inhibiting the Bank’s competition with China and other
emerging market economies.
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“Country Systems”
and their implication for the future of safeguards
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Who Takes Primary Responsibility for
Standards and Compliance?
• Now, the World Bank takes primary responsibility, but this is
changing.
• The 2005 Paris Declaration and the 2008 Accra Action
Agenda call for recipient countries to assume primary
responsibility. On a pilot basis, the World Bank is
experimenting with this shift.
• The shift requires that “Country Systems” (fiduciary and
safeguard) are equivalent to those of the Bank.
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Country Systems… There’s a Long Way to Go
IEG* finds that
• For many countries – financial, procurement and safeguard
systems are “weak to non-existent”
• A shift to country systems continues (on a pilot basis) despite
some evidence of severe problems. Already, 66% of external
aid goes through country financial systems.
*”IDA internal controls” (2009)
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Bank’s Role in Country Systems
• Legal department determines the extent to which country
systems are “equivalent” to World Bank policies.
• Where gaps exist, countries (or third parties) would implement
“gap-filling measures.”
• At some point, the Bank would make an “acceptability
determination.”
• Will the Bank ensure that country policies are acceptable over
time? That countries actually enforce their policies? We
doubt it.
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Who’s Afraid of Policy Enforcement/
Compliance?
• Internal reforms aim “to change the philosophy of the Bank’s
approach from an emphasis on supervision and compliance to
one of implementation support.” (“New World, New WBG”)
• “At a time when the development community is focused on
results, accountability, and partnership, current supervision
efforts place most of the emphasis on inputs, process, and
oversight of compliance.” (“Moving Ahead on ILR”)
• When the Bank is potentially in violation of its charter, is it
shying away from compliance?????
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Conclusion
The Bank is re-defining itself. For 65 years, its primary business
has been to finance “ring-fenced” projects that comply with its
policies.
Henceforth, the Bank will:
• primarily administer “pooled funds” such as national budget
and sector operations.
• rely on recipient countries to design, implement and enforce
fiduciary and safeguards policies, where they apply.
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The Challenge
The World Bank is a PUBLIC institution. If it were privatized,
then it would be legitimate for the Bank to compete with
Chinese lenders, among others.
As a PUBLIC institution, it has an obligation to be a pace-setter
for governments by championing high fiduciary and safeguard
standards.
HOW CAN GOVERNMENTS AND CSOs ENSURE THAT THE
WORLD BANK SHOULDERS THIS RESPONSIBILITY?
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