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Topic:Macroeconomics
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Ten factors that improve the impact of Development Policy Financing in IDA countries

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How to Improve the Impact of Development Policy Financing in IDA countries
A new IEG report outlines the conditions that maximize development outcomes for Development Policy Financing in IDA countries.A new IEG report outlines the conditions that maximize development outcomes for Development Policy Financing in IDA countries.

Rwanda: Fourth Poverty Reduction Strategy Grant, Fifth Poverty Reduction Support Grant, Sixth Poverty Reduction Support Grant, and Seventh Poverty Reduction Support Financing

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This Project Performance Assessment Report evaluates a programmatic series of four development policy financing (DPF) operations approved for Rwanda over 2008–11. The series consisted of four single-tranche operations: the fourth, fifth, and sixth Poverty Reduction Support Grants (PRSGs), approved in March 2008, 2009, and 2010, respectively, and a seventh Poverty Reduction Support Financing Show MoreThis Project Performance Assessment Report evaluates a programmatic series of four development policy financing (DPF) operations approved for Rwanda over 2008–11. The series consisted of four single-tranche operations: the fourth, fifth, and sixth Poverty Reduction Support Grants (PRSGs), approved in March 2008, 2009, and 2010, respectively, and a seventh Poverty Reduction Support Financing operation (PRSF-7, a combination of grant and credit financing) approved in February 2011. The purpose of the PPAR is to examine the extent to which the series achieved its relevant program development objectives and how well the associated outcomes have been sustained since the series’ closure. In addition to its accountability and lesson learning functions, the PPAR provided inputs to the Independent Evaluation Group’s (IEG) fiscal years (FY) 09–17 Country Program Evaluation for Rwanda. Ratings for this project are as follows: Outcome was moderately satisfactory, Risk to development outcome was moderate, Bank performance was moderately satisfactory, and Borrower performance was moderately satisfactory. Key lessons from the experience of PRSF 4-7 include: (i) Programmatic DPF can be an effective form of support for a well-defined, country-owned reform program. (ii) It is difficult to be definitive about the efficacy of a DPF series unless the results framework is tight-knit, the reforms supported have the requisite depth, and there is a strong and direct causal link between these reforms and the outcomes sought. (iii) A commitment to providing regular, predictable financing in the form of (multisector) general budget support operations implies that the World Bank needs to be prepared to accommodate dilution or deferral of reform content relative to what is foreseen at the outset. (iv) The World Bank can face a hard choice between adhering to a CPAF in a multisector budget support series and fulfilling the good-practice prescriptions in its operational policy for DPF. (v) Successful deployment of an integrated financial management information system can be facilitated by high-level commitment and performance monitoring, sustained external support, and system ownership.

Boosting Market Confidence to Support Key Development Efforts: Three Lessons from Indonesia

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Boosting Market Confidence to Support Key Development Efforts
This brief captures the lessons from evaluating the World Bank’s Public Expenditure Support Facility (DPL-DDO) in Indonesia. This brief captures the lessons from evaluating the World Bank’s Public Expenditure Support Facility (DPL-DDO) in Indonesia.

Romania CLR Review FY14-18

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This review of the World Bank Group’s Completion and Learning Report (CLR) covers the Country Partnership Strategy (CPS) and the Performance and Learning Review (PLR) dated November 3, 2016. The original CPS period (FY14-17) was at the PLR stage extended by one year to cover FY14-18. The CLR and this review cover this extended period. Romania is an upper middle-income country with a GNI per Show MoreThis review of the World Bank Group’s Completion and Learning Report (CLR) covers the Country Partnership Strategy (CPS) and the Performance and Learning Review (PLR) dated November 3, 2016. The original CPS period (FY14-17) was at the PLR stage extended by one year to cover FY14-18. The CLR and this review cover this extended period. Romania is an upper middle-income country with a GNI per capita of $9,480 in 2016 and a population of 19.7 million. Romania’s per capita GDP had grown rapidly up to 2009, reducing poverty, but the global financial crisis of 2008 triggered a severe recession. The IMF Article IV report (May 2017) notes that Romania strengthened its economy considerably after the global financial crisis. Romania registered an average annual GDP growth of 3.9 percent during the review period (2014-2016). Public debt and fiscal and current account imbalances are moderate compared to many emerging markets, but significant challenges remain and the momentum of progress in policies has waned. Income convergence with the EU has slowed and poverty is among the highest in the EU. Romania has a Human Development Index (HDI) of .802 in 2015, placing the country in the very high human development category and ranking 50 (of 188) in HDI in 2015. Its Gini coefficient is 28.3 in 2016 (from around 35 in 2010) and its poverty headcount ratio based on the national poverty line is 25.4 percent (average 2014-2016).

Mauritania CLR Review FY14-16

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This completion and learning review (CLR) covers the period FY 14-16. The country partnership strategy (CPS) consisted of two pillars (or focus areas): (1) Growth and diversification; and (2) economic governance and service delivery. The CPS work program was aligned with pillars I-IV of the third poverty reduction strategy paper (PRSP3): (i) accelerating economic growth; (ii) anchoring growth in Show MoreThis completion and learning review (CLR) covers the period FY 14-16. The country partnership strategy (CPS) consisted of two pillars (or focus areas): (1) Growth and diversification; and (2) economic governance and service delivery. The CPS work program was aligned with pillars I-IV of the third poverty reduction strategy paper (PRSP3): (i) accelerating economic growth; (ii) anchoring growth in the economic sphere directly benefiting the poor; (iii) developing human resources and facilitating access to basic infrastructure; and (iv) promoting real institutional development supported by good governance. Independent Evaluation Group (IEG) concurs with some of lessons provided in the CLR summarized as follows: (i) for a CPS program to yield results, the time to implement the program must be long; (ii) CPS programs need to take a wider approach to sectors, as in the in case of the Banda Gas and associated transmission project; and (iii) the Bank needs to invest in capacity building, both in individual operations and in long-term reform and modernization.

Burkina Faso CLR Review FY13-16

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Burkina Faso is a low-income country with a GNI per capita of $620 in 2016. During 2013-2016, annual GDP growth averaged 5.0 percent, but annual GDP per capita growth was only 1.9 percent due to high population growth. Economic growth was built on a narrow base, mainly agriculture and mining, and has failed to produce a sufficient number of jobs to absorb the rapidly growing work force, 80 Show MoreBurkina Faso is a low-income country with a GNI per capita of $620 in 2016. During 2013-2016, annual GDP growth averaged 5.0 percent, but annual GDP per capita growth was only 1.9 percent due to high population growth. Economic growth was built on a narrow base, mainly agriculture and mining, and has failed to produce a sufficient number of jobs to absorb the rapidly growing work force, 80 percent of which are in agriculture. While the poverty rate declined from 50 percent to 40 percent between 2003 and 2014, the absolute number of people living in poverty, of which 90 percent live in rural areas, remained roughly the same between the two periods – lack of access by the poor to social services and basic infrastructure has been a major constraint. The level of vulnerability of households is high, with two-thirds suffering from shocks each year, mainly from natural hazards. Burkina Faso ranked 185 out of 188 countries in 2015 in the Human Development Index.

Role in Global Issues: An Independent Evaluation of the World Bank Group Convening Power (Approach Paper)

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Recent World Bank Group (WBG) strategy documents, including the Forward Look, reiterated the importance of the WBG’s leadership role in dealing with global challenges and positioned the organization’s ability to work at the nexus of local and global issues such as climate change, gender, and pandemics as core part of its value proposition (World Bank 2013 and 2016). When the WBG shareholders Show MoreRecent World Bank Group (WBG) strategy documents, including the Forward Look, reiterated the importance of the WBG’s leadership role in dealing with global challenges and positioned the organization’s ability to work at the nexus of local and global issues such as climate change, gender, and pandemics as core part of its value proposition (World Bank 2013 and 2016). When the WBG shareholders committed to scale up WBG resources through the recent IBRD and IFC capital increase and the IDA18 replenishment in 2016, a core premise was to more strategically perform its global role, in better collaboration with public and private partners. This evaluation is about the WBG’s global role. It will assess how and when the WBG exercises convening power to spark collective action on global issues. Given the scale and interconnectedness of global challenges; increased complexity of the development ecosystem; and concerns over “mission creep”, the WBG’s role as a catalyst for collective action on behalf of the international community could become even more important. When and how should it lead, when should it support, and when should it withdraw?

Benin CLR Review FY13-18

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This review of the World Bank Group’s Completion and Learning Report (CLR) covers the period of the Country Partnership Strategy (CPS) (FY13-17) and the Performance and Learning Review (PLR) which extended the CPS period to include FY18. The PLR was discussed at the Board on August 30, 2016. Benin is a low-income country (per capita income of $820 in 2016). It has a population of about ten Show MoreThis review of the World Bank Group’s Completion and Learning Report (CLR) covers the period of the Country Partnership Strategy (CPS) (FY13-17) and the Performance and Learning Review (PLR) which extended the CPS period to include FY18. The PLR was discussed at the Board on August 30, 2016. Benin is a low-income country (per capita income of $820 in 2016). It has a population of about ten million (2013 census) with a high population growth of around 2.8 percent per annum. The average GDP growth during the review period was 4.9 percent (2013-2016). The average per capita GDP growth rate was relatively low at 2.0 percent between 2013 and 2016, due to the high population growth and drop in the overall growth rate in 2015 as a result of an economic slowdown in neighboring Nigeria, political transition in 2015-2106, and decline in cotton prices. The economy is dominated by traditional agriculture, informal commerce and trade - areas with low levels of productivity. The country ranks 167 (out of 188) on the UNDP Human Development Index in 2015.

Lao People’s Democratic Republic: Trade Development Facility Project (PPAR)

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This Project Performance Assessment Report (PPAR) assesses the Lao People’s Democratic Republic (Lao PDR) Trade Development Facility project that was financed from a multi-donor trust fund. The project’s objectives were as follows: (i) To support the Recipient’s aims in poverty reduction and economic development of Lao PDR, by facilitating trade and cross-border movement of goods, and by Show MoreThis Project Performance Assessment Report (PPAR) assesses the Lao People’s Democratic Republic (Lao PDR) Trade Development Facility project that was financed from a multi-donor trust fund. The project’s objectives were as follows: (i) To support the Recipient’s aims in poverty reduction and economic development of Lao PDR, by facilitating trade and cross-border movement of goods, and by increasing capacity of the Government to undertake specific tasks related to regional and global economic integration; and (ii) To assist the Recipient in implementing the Action Matrix for Trade-Related Assistance approved by the Recipient and donors in September 2006, and achieve the goals set up in the Recipient’s medium-term strategy for increasing growth and export competitiveness, as reflected in the Recipient’s Poverty Reduction Strategy and the National Socio-Economic Development Plan. Ratings for the Trade Development Facility Project is as follows: Outcome is satisfactory, Risk to development outcome is moderate, World Bank performance is satisfactory, and Borrower performance is satisfactory. Lessons from the project include: (i) Early engagement with the government: Appropriate analytic work can lay the basis for sound project design and enhance the commitment of the government. (ii) Attribution issues: The final outcomes in a results framework should be specific and attributable to the project. (iii) Simple project design: In the context of low institutional capacity, simple project design with fewer components may enhance the focus of a project and the likelihood of full implementation. (iv) Capacity building: In a limited capacity environment, a “learning-by-doing” approach can be effective in building government capacity. (v) Political commitment: Accession to a major regional or global agreement such as WTO can serve as a strong incentive for reforms and ensure political commitment.

Georgia: First, Second and Third Development Policy Operations

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This Project Performance Assessment Review (PPAR) evaluates a programmatic series of three development policy operations (DPOs) for Georgia, including three credits and one loan, in the amount of $85 million for DPO-I, $50 million for DPO-II, and $40 million for DPO-III, implemented between July 2009 (World Bank Board of Executive Directors approval of DPO-I) and March 2012 (closing of DPO-III). Show MoreThis Project Performance Assessment Review (PPAR) evaluates a programmatic series of three development policy operations (DPOs) for Georgia, including three credits and one loan, in the amount of $85 million for DPO-I, $50 million for DPO-II, and $40 million for DPO-III, implemented between July 2009 (World Bank Board of Executive Directors approval of DPO-I) and March 2012 (closing of DPO-III). All operations were fully disbursed. The Government of Georgia requested these operations in a context of economic downturn resulting from the August 2008 conflict with the Russian Federation and the global financial crisis. Ratings for the First, Second and Third Development Policy Operations are as follows: Outcome is satisfactory, Risk to development outcome is moderate, Bank performance is satisfactory, and Borrow performance is satisfactory. Among the key lessons are the following: (i) DPO programs during times of crisis may involve a trade-off between providing predictable budget support and the quality of the reform agenda. (ii) Although scaling up Georgia’s TSA program was fully justified, cash transfer programs are mainly geared toward the chronically poor, whereas many persons affected by crises fall into temporary poverty. (iii) In a fiscally constrained environment, a move to universal health coverage may not necessarily bring an improvement in the financial protection of the poor. (iv) The World Bank can play a significant role in helping focus government’s efforts in policy areas where other development partners mainly support reforms, such as in the trade-related reforms required to negotiate Georgia’s Deep and Comprehensive Free Trade Agreement with the EU.