Addressing institutional capacity is like running through a labyrinth. It often involves navigating unclear processes, shifting objectives, and trial and error. World Bank projects show results in institutional capacity development but lack an overarching framework to guide efforts.

In the absence of a defined framework, the World Bank has often usefully applied the Institutional Change Assessment Method (ICAM) to diagnose and address institutional capacity needs in projects and country programs (See ICAM dimensions in Box 1).

In its most recent Evaluation Insight Note, IEG applied the ICAM method to review evidence from IEG evaluations and validations and draw new insights to understand how the World Bank can help address institutional capacity development needs in Sub-Saharan Africa.

To do this IEG systematically analyzed the text contained in 64 IEG reports from Sub-Saharan Africa (from hereon termed “cases”). These cases cover 10 Global Practices and 32 countries in the region.

The analysis shows that the ICAM method helps to navigate the labyrinth of implementation to address institutional capacity development needs.

1. The ICAM can help identify and address institutional capacity needs at the portfolio level

IEG found that World Bank projects and country partnerships in Sub-Saharan Africa routinely integrate and show results in institutional capacity development. This enables multiple entry points for enhancing processes of institutional change, which the ICAM can help identify. Thus, ICAM can be used to adapt country portfolios to improve performance.

The cases reviewed consistently supported institutional reforms in a variety of challenging contexts with, for example, compromised financial systems, corruption, and civil conflict. The greatest number of interventions were in enhancing organizational arrangements, followed by strengthening the ownership of interest groups. 

Applying the ICAM to review successes or challenges in institutional capacity can provide clarity on progress toward objectives and help identify performance issues. A larger share of positive accounts in the cases often correlated to with higher outcome ratings. Of the cases rated as moderately satisfactory and above, 66 percent had high levels of positive reporting on institutional capacity development. In contrast, among cases rated as moderately unsatisfactory and below, only 10 percent had a high percentage of positive reporting.

2. Applying the ICAM can help performance by prioritizing efforts for strengthening the ownership of interest groups

The capacity to positively engage interest groups is significantly correlated with project performance, as measured by ratings. Interest groups influence governments and affect decisions about public policy corresponding to needs, wants, or, more generally, forms of power. IEG’s review found that the ownership of interest groups was consistently identified as an important dimension in enabling or hindering institutional capacity development, and that positive statements on the ownership of interest groups are coupled with positive accounts in other dimensions and vice versa.

For example, underlying successes in strengthening the ownership of interest groups in Sierra Leone’s National Social Action Project contributed to improvements in other dimensions of institutional capacity development.

Meanwhile, inadequate attention to developing capacity to engage interest groups led to challenges that hindered project performance. For example, in Ghana, where responsibilities in the agriculture sector are fragmented across different directorates and agencies, the World Bank engaged largely through the Ministry of Food and Agriculture Policy Planning and Monitoring Directorate and did not engage sufficiently with other interests. Consequently, reforms did not perform as expected.  

3. Support that enhances commitment, coordination, and cooperation helps improve the process of institutional capacity development in all three ICAM dimensions.

Evidence indicates that specific support for improved commitment, coordination, and cooperation is needed to enhance the process of institutional capacity development.

Commitment for institutional capacity development is improved by working with different interest groups. Institutional development processes are hindered when a single leader, often from the government, is relied on. For example, a multisector micro, small, and medium enterprise project in Guinea did not identify risks to government commitment nor did it identify a private sector leader to champion dialogue; both factors hindered the further adoption of business environment reforms. To overcome this kind of challenge, leaders needed to be mobilized from different constituencies representing a diverse array of interests.

Existing coordination arrangements should be considered during project and country program design, so as to not undermine successfully established institutional capacity. Existing cross-functional organizational structures were often very important for supporting capacity development. In Senegal, the national executive bureau successfully provided day-to-day project management for a nutrition intervention, effectively handling the community subcontracts, supporting capacity strengthening for nongovernmental organizations in financial management procedures, and clarifying institutional arrangements with sector ministries.

Cooperation also plays an important role. Inadequate efforts to increase consensus and shared actions can hinder project implementation. Interventions that had cooperation challenges often did not define agreements on implementation or lacked an understanding of the role of accountability mechanisms. Interventions that promoted enhanced cooperation used quality analytical underpinnings to justify decisions and supported improved perceptions of change processes.