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Five years ago the World Bank changed its operating model. Where do we go from here?

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Five years ago the World Bank changed its operating model. Where do we go from here?
(Part 2 of a 2-part series about the findings of IEG’s evaluation Knowledge Flow and Collaboration Under the World Bank’s New Operating Model). Read Part 1. Two important goals of the World Bank reforms Knowledge Flow is the process of bringing the right global knowledge to the right clients at the right time. Less advanced client countries want to know how more Show More(Part 2 of a 2-part series about the findings of IEG’s evaluation Knowledge Flow and Collaboration Under the World Bank’s New Operating Model). Read Part 1. Two important goals of the World Bank reforms Knowledge Flow is the process of bringing the right global knowledge to the right clients at the right time. Less advanced client countries want to know how more advanced countries, such as Chile, Korea, Malaysia, or Singapore, handle technical reforms. This requires the free flow of people and knowledge across Regions and the Bank Group’s organizational boundaries. It also requires customizing knowledge to country contexts. And it requires strong knowledge production, curation, and management. Integrated Solutions address complex issues with broad, cross-sectoral, and multiservice programs involving diverse tools and knowledge. Clients’ development challenges often cut across sectors and require diverse technical expertise from different sectors, disciplines, and both public and private sectors. To provide integrated solutions staff must collaborate across sectoral boundaries on multisector approaches, programs, or projects. Integrated solutions are meant to complement, not replace, traditional single-sector projects and programs. In the previous post for this series, I explained how IEG found that the 2014 reforms have improved knowledge flows across regions, reduced silos, and deepened our expertise in specific areas, and that the Global Theme Groups have proven to be a useful addition to the operating model.  These are all positive developments. But as with any major change to a large organization’s structure, there have been some negative impacts.  Some of the negative impacts can be traced to difficulties during the implementation of the reforms in 2014-15, as I will explain. Challenges of Implementation The new matrix organization has remained in flux because of managerial challenges. The central change management team was dispersed when the reform became effective in 2014. This caused discontinuity in reform implementation. There is no clear line of sight from reform plans laid out in 2013–14 and what has emerged today, after many subsequent adjustments. Having a central team to oversee reform implementation and use organizational performance data to inform course corrections could have benefited us. The timing of expenditure savings also complicated reform implementation. Budget savings were not an original reform goal. Management introduced the “expenditure review” in 2014, unanticipated by most staff. The goal was sound - to increase IBRD’s financial capacity, bringing our expenditures in line with revenues. This review targeted budget cuts of $400 million in three phases over three years, implying also a need for staff reductions. The expenditure measures have been credited with paving the way for the 2018 capital increase. But their timing during organizational reforms resulted in challenges, such as staff morale suffering. What are the problems with the current operational structure? Although the objective of overcoming regional silos was sound, the new model has created other barriers to knowledge flow and collaboration. Collaboration across boundaries is difficult. The GPs are competitive and have become new silos. Managers on both sides of the matrix incur high transaction costs when working across the GP structure. The operating model works as intended when Country Directors and Program Leaders show leadership. Country Directors point to GP collaboration as a key pain point. Implementing the crowded operational agenda is challenging. Our operations mainstream jobs, gender, climate change, maximizing finance, citizen engagement, fiduciary controls, and other issues. Mainstreaming requires collaboration across boundaries and tends to drive costs up. We task people with integrating, coordinating, and connecting across boundaries— Program Leaders, Global Leads, Global Themes Groups—but they often don’t have the authority or enough budget to do this. There is a large gap between the reform’s aspirations to deepen knowledge and the current reality in many GPs. Some GPs have strategic approaches to knowledge; others do not. This is because of differences in the availability of trust funds and leadership support. The mechanisms designed to pursue knowledge excellence have met with mixed results. A few GPs made their Global Solutions Groups work largely as intended, while others recast or disbanded the model. Global Leads have unclear roles and unfunded mandates. There are concerns with quality assurance processes, specifically around contestability and the balance of oversight responsibility. Why these weaknesses? The reorganization did not change incentives, behaviors, and organizational culture. Incentives for GP staff continue to favor own-managed lending, complicating collaboration. Managers without robust lending face fragmented and uncertain budget realities. A simpler approachto the reorganizations may have been to retain existing groups and structuresand realign incentives and reporting arrangements. More could also have been done to create metrics for organizational effectiveness and use them to inform course corrections. Better data on the quality of services to clients could help us focus on results. Where do we go from here? Management is aware of the imperfections in the model, and, are using the findings of this evaluation along with other data to make course corrections. As we move forward, it is important that we focus more on incentives, culture, and collaboration mechanisms than on structure. Bank staff still have “change fatigue”—little appetite for another major reorganization. Will more changes to the structure, the org chart, improve things? The org chart can be redrawn with the stroke of a pen, as it has been many times since 2014, but does anyone think that will induce different behaviors? To stimulate collaboration, we need more robust mechanisms to work across the matrix structure. The two sides of the matrix need robust, authoritative connectors. As we explained in the evaluation, the existing pool of directors in the GPs is large enough to constitute a new cadre charged with connecting and arbitrating between GPs and Country Directors in each Region. Also, Program Leaders could be used more effectively to connect the two sides of the matrix. In our evaluation work, we saw many strong examples of Program Leaders helping to make cross-sectoral collaboration, integrated solutions, and complex client dialogue happen. Since our evaluation was completed, senior management redefined the management roles in the Practice Groups, moving toward two senior roles: Global Directors and Regional Directors. Any changes should maintain the global flow of staff and knowledge. The globally integrated nature of the new operating model should be preserved. We also need to deepen our knowledge and continue to enhance knowledge flow. This calls for revamped incentives. Senior management could signal support for knowledge excellence. Metrics for knowledge uptake, impact, quality, and influence would help. There should be more contestability in quality assurance. More nimble budgeting arrangements and accelerated trust fund reforms would also contribute. The main challenge going forward is to stimulate more collaboration under the new operating model while enhancing the initial gains on knowledge flow. By adjusting our incentives, culture, and collaboration mechanisms, we can achieve the level of integration and knowledge flow we will need to offer workable solutions to the increasingly complex problems the World Bank is tasked with helping to solve. Read IEG's Evaluation: Knowledge Flow and Collaboration Under the World Bank’s New Operating Model

Five years ago the World Bank changed its operating model. What difference did it make?

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Five years ago the World Bank changed its operating model.  What difference did it make?
Emerging lessons of the early implementation of the World Bank’s new operating model.Emerging lessons of the early implementation of the World Bank’s new operating model.

Taking Evaluative Evidence (well) Into the 21st Century

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IEG's contribution to gLOCAL Evaluation Week includes one session, "Advances in Evaluative Evidence", and one course, "Using Geospatial Data for Evaluation".IEG's contribution to gLOCAL Evaluation Week includes one session, "Advances in Evaluative Evidence", and one course, "Using Geospatial Data for Evaluation".

Improving urban governance: Lessons from Ethiopia

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Improving Urban Governance: Lessons from Ethiopia
This brief captures the lessons from evaluating the World Bank’s Ethiopia Urban Local Government Development Project (ULGDP).This brief captures the lessons from evaluating the World Bank’s Ethiopia Urban Local Government Development Project (ULGDP).

Contribution and Effectiveness of Trade Facilitation Measures: Structured Literature Review

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This literature review has two main objectives. The first is to survey the findings on effectiveness of trade facilitation measures on outcomes such as trade flows, and trade costs. The second objective is to gain a detailed understanding of the contributions of different kinds of trade facilitation measures to increasing trade, and trade costs reduction. In doing so, the review provides the Show MoreThis literature review has two main objectives. The first is to survey the findings on effectiveness of trade facilitation measures on outcomes such as trade flows, and trade costs. The second objective is to gain a detailed understanding of the contributions of different kinds of trade facilitation measures to increasing trade, and trade costs reduction. In doing so, the review provides the framework for establishing a causal relationship between trade facilitation support interventions of the World Bank Group thereby informing on the effectiveness of past interventions and improving future ones.

Papua New Guinea CLR Review FY13-18

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This review covers the period of the Country Partnership Strategy (CPS), FY13-FY16, and updated in the Performance and Learning Review (PLR) dated July 1, 2016. At the PLR stage, the CPS period was extended by two years. Papua New Guinea (PNG) is a lower middle-income country with a Gross National Income (GNI) per capita of $2,340 in 2017. Oil and gas extraction has been the main driver of Show MoreThis review covers the period of the Country Partnership Strategy (CPS), FY13-FY16, and updated in the Performance and Learning Review (PLR) dated July 1, 2016. At the PLR stage, the CPS period was extended by two years. Papua New Guinea (PNG) is a lower middle-income country with a Gross National Income (GNI) per capita of $2,340 in 2017. Oil and gas extraction has been the main driver of economic growth. During the CPS period, GDP growth varied considerably, from 0.3 percent in 2018 to 15 percent in 2014, due to volatility in commodity prices and disruption in the operations of three major mining and petroleum projects from a 7.5 magnitude earthquake in 2018. The country’s Human Development Index increased from 0.52 percent in 2010 to 0.544 in 2017, ranking 153rd among 189 countries in 2017. PNG rejoined the WBG’s Harmonized List of Fragile and conflict affected situation Countries (FCS) in FY17 and FY18. This list had excluded PNG since 2011. The World Bank Group’s (WBG) CPS had three pillars (or focus areas): (i) increased and more gender-equitable access to inclusive physical and financial infrastructure, (ii) gender equitable improvements in lives and livelihoods, and (iii) increasingly prudent management of revenues and benefits. IEG rated the CPS development outcome as moderately unsatisfactory, and the WBG performance as fair. The CLR provides three lessons: First, portfolio improvements require sustained engagement by all project teams, implementing agencies, and the Government, as well as stronger interagency coordination. Second, PNG’s institutional and social fragility places a premium on understanding political economy factors with a bearing on projects, and on monitoring and ensuring awareness of grievance redress mechanisms. Third, partnerships can help expand ASA, increase the WBG’s impact, and test new ideas.

How incentive payments support Universal Health Coverage, in theory and in practice

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How incentive payments support Universal Health Coverage
What IEG found evaluating the World Bank Group's portfolio of PBF programs.What IEG found evaluating the World Bank Group's portfolio of PBF programs.

Vietnam: Education Projects - School Readiness and Escuela Nueva

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The government and people of Vietnam place a high value on education. The government’s Socio-Economic Development Strategy 2010–20 and the Socio-Economic Development Plan 2016–20 emphasize the importance of investment in human capital to develop people’s skills in support of a knowledge-based economy. This assessment covers two projects: Vietnam School Readiness and Promotion Project, and the Show MoreThe government and people of Vietnam place a high value on education. The government’s Socio-Economic Development Strategy 2010–20 and the Socio-Economic Development Plan 2016–20 emphasize the importance of investment in human capital to develop people’s skills in support of a knowledge-based economy. This assessment covers two projects: Vietnam School Readiness and Promotion Project, and the Global Partnership for Education-Vietnam Escuela Nueva Project. Objectives for these projects are: (i) to raise school readiness for five-year old children, in particular for those most vulnerable to not succeeding in a school environment, through supporting selected elements of Vietnam’s Early Childhood Education (ECE) program, and (ii) to introduce and use new teaching and learning practices in the classroom targeting the most disadvantaged groups of primary students. Ratings for the Vietnam School Readiness and Promotion Project are as follows: Outcome was satisfactory, Bank performance was satisfactory, Quality of M&E was substantial, and Risk to development outcome was low. Ratings for the Global Partnership for Education – Vietnam Escuela Nueva Project are as follows: Outcome was satisfactory, Risk to development outcome was modest, Bank performance was satisfactory, and Borrower performance was satisfactory. IEG identified the following lessons from its evaluation of the two operations: (i) In addition to lending, the World Bank can add value through the transmission of knowledge from experiences and lessons that help shape reforms. (ii) When significant pedagogical changes are required of teachers, incentives, support, and long-term commitment are needed (probably more than education systems realize). (iii) When scaling up or adopting a systemwide approach, it is important to understand and design this approach in accordance with the decentralized context and challenges faced at the various levels of administration. (iv) Targeting disadvantaged areas does not translate into targeted efforts for specific vulnerable groups. (v) When scaling up, the importance of consultation and communication cannot be underestimated.

Tajikistan CLR Review FY15-18

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This independent review of the World Bank Group's Completion and Learning Review (CLR) covers the period of the Country Partnership Strategy (CPS), FY15-FY18.The government's National Development Strategy (NDS), 2006-2015, aimed at generating sustainable growth, improving public administration, and developing human resources. The CPS original design was broadly aligned with NDS through its three Show MoreThis independent review of the World Bank Group's Completion and Learning Review (CLR) covers the period of the Country Partnership Strategy (CPS), FY15-FY18.The government's National Development Strategy (NDS), 2006-2015, aimed at generating sustainable growth, improving public administration, and developing human resources. The CPS original design was broadly aligned with NDS through its three focus areas: (1) strengthening the role of the private sector; (2) social inclusion; and, (3) promoting regional connectivity. The CPS design also included cross-cutting areas in gender, governance, and climate change. The CPS sought to help Tajikistan transition to a new growth model. The cost of complying with business regulation dropped, although Tajikistan continues to rank the lowest in the Central Asia region per the 2019 Doing Business report. Tax e-filing has exceeded expectations, but taxpayer satisfaction with new procedures was not assessed. The World Bank collaborated effectively with development partners in areas such as energy, water, and governance. INT received ten complaints and launched three investigations which all closed as substantiated.IEG agrees with the lessons and highlights the following: (i) overambitious objectives and/or under-emphasis of institutional impacted the success of the CPS program; (ii) with greater ownership and commitment, the government can (and does) implement “transformational projects” and achieve significant results; and, (iii) uneven governance standards, weak administration capacities, and inadequate internal review practices are constraints to swift implementation and need to be anticipated and managed proactively.IEG adds two lessons: i) A country program should identify objectives that match the level of ambition of the program and its intended results and impact; and ii) Political economy analysis of the drivers of policy reform is necessary early on to accompany implementation of ambitious goals.

Poland: Public Finance, Resilience and Growth Development Policy Loans (PPAR)

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This Project Performance Assessment Report (PPAR) evaluates four lending operations implemented in Poland from 2012 to 2016. The development objectives of the first series were to support Poland’s fiscal consolidation agenda while strengthening fiscal institutions and improving the efficiency and sustainability of social spending. The objectives of the second series were to enhance macroeconomic Show MoreThis Project Performance Assessment Report (PPAR) evaluates four lending operations implemented in Poland from 2012 to 2016. The development objectives of the first series were to support Poland’s fiscal consolidation agenda while strengthening fiscal institutions and improving the efficiency and sustainability of social spending. The objectives of the second series were to enhance macroeconomic resilience, strengthen labor market flexibility and employment promotion, and improve private sector competitiveness and innovation. Ratings for the First and Second Public Finance Development Policy Loans are as follows: Outcome is satisfactory, Risk to development outcome is low, Bank performance is satisfactory, Borrower performance is moderately satisfactory. Ratings for the First and Second Resilience and Growth Development Policy Loans are as follows: Outcome is moderately satisfactory, Risk to development outcome is moderate, Bank performance is satisfactory, and Borrower performance is satisfactory. Lessons include: (i) Development policy lending can help mitigate global economic and financial shocks and protect vulnerable groups in high-income countries when accompanied with timely, high-quality, and responsive technical assistance that supports the reforms. (ii) Where a high-income country is required to implement constitutional provisions or agreed reforms with a regional body, providing support for the implementation of such reforms is likely to enhance the likelihood of success. (iii) RAS are a promising tool for engaging governments in high-income countries when Bank Group staff demonstrate the capacity to produce timely and high-quality analytical products in response to government requests. (iv) Coordinating with other partners in situations where the World Bank is not the largest stakeholder is important for successful implementation of reforms. (v) Analyzing the political cost of implementing proposed reform measures is an important part of policy lending.