Project Performance Assessment Report for the St. Lucia Economic and Social Development Policy Loan and Credit Operation
This Project Performance Assessment Report assesses the Uganda Second Local Government Development Project (2003 to 2008). The project’s development objective was to improve Local Governments’ institutional performance for sustainable, decentralized service delivery, particularly for the poor. It... Full Description »
This Project Performance Assessment Report assesses the Uganda Second Local Government Development Project (2003 to 2008). The project’s development objective was to improve Local Governments’ institutional performance for sustainable, decentralized service delivery, particularly for the poor. It built on lessons from the previous operation, and sought to support implementation efforts as an important step toward achieving the Millennium Development goals in education, health, and access to water. The project’s overall outcome is rated Moderately Unsatisfactory. Key lessons identified were, (i) Policy reversals can cause serious damage to otherwise significant project outcomes, and are difficult to counter. District proliferation or reduction in un-earmarked funding, or Local Governments’ rights to raise revenues, need to be monitored closely as these could be early signals of policy reversal. (ii) Monitoring should be focused on outcome indicators as well as process indicators; moreover, indicators are best unified across sectors. (iii) Decentralization is not a sector, while it was treated as such in Uganda with a Sector Working Group, a Sector Investment Plan, and specific donor support. Decentralization of service delivery affects all economic sectors and should be supported in a harmonized way across sectors and donor programs. (iv) Many conditional grants to Local Governments are funded through donor programs. A fully decentralized sector allocation, supported through government budgets, however, requires changes to ways of donor fund allocations across sectors, given that such allocations cannot be determined a priori. This is even more important in case Local Governments and communities have authority to do so, while, on the other hand, incompatibilities exist in this regard, such as those related to development cooperation frameworks or to sector-specific earmarking of funds by teams.
Content Type : Reports , Doc Sub Category : Project Performance Assessment Report , Country : St. Lucia
May 30, 2014
Project Performance Assessment Report for the Jamaica Fiscal and Debt Sustainability Development Policy Loan
This Project Performance Assessment Report (PPAR) is part of a set of project performance assessments exploring g development outcomes in different country contexts that are faced with particular challenges during the recent global financial crisis, such as the small, middle-income states of the... Full Description »
This Project Performance Assessment Report (PPAR) is part of a set of project performance assessments exploring g development outcomes in different country contexts that are faced with particular challenges during the recent global financial crisis, such as the small, middle-income states of the Dominican Republic, Grenada, Jamaica, and St Lucia. The objectives of the Jamaica Fiscal and Debt Sustainability Development Policy Project were to (i) enhance fiscal and debt sustainability; (ii) increase the efficiency of financial management and budget processes; and (iii) reduce distortions and enhance the efficiency of the tax system. This single-tranche development policy loan (DPL), operational from January 2009 through January 2010, was targeted to assisting government in addressing immediate issues of fiscal and debt sustainability. It also provided an opportunity to engage with government on Jamaica's medium-term development program. The outcome of the project is rated as moderately satisfactory. Three key lessons emerged, (i) it is essential for the Bank to work in close collaboration with the IMF and other development partners in DPL operations to ensure complementarities and increase the likelihood of success of the overall program; (ii) a single DPL can be a useful entry point to address an emergency, and to engage with a country where the Bank had no ongoing macroeconomic policy dialogue for an extended period. Notably, a country such as Jamaica that undergoes a systemic crisis needs a medium-term programmatic approach; (iii) the Bank is often called upon to make difficult choices in its policy based lending which can involve high-risk/high reward strategic issues. In this case, it was clear from the beginning that the program would be subject to high macroeconomic risks and the success was not guaranteed. The Bank proceeded to support government's reform program that was conceptually sound but the risk of failures was high due to the magnitude of the problem facing the country. Under such conditions, the Bank might alternatively focus its early efforts more on institutional strengthening such as through advisory services to build capacity and to participate with significant funding in a broader reform program supported by IMF and other IFIs. The subsequent program was part of such a broader package.
Content Type : Reports , Doc Sub Category : Project Performance Assessment Report , Country : Jamaica
March 7, 2014
Project Performance Assessment Report for the Mexico Rural Finance Development Structural Adjustment Loan
The Project Performance Assessment Report (PPAR) assesses the Mexico Rural Finance Development Structural Adjustment Loan that was approved in May 2003 and closed in December 2005. This review informs a broader assessment of Bank operations assisting in the provision of financial services to... Full Description »
The Project Performance Assessment Report (PPAR) assesses the Mexico Rural Finance Development Structural Adjustment Loan that was approved in May 2003 and closed in December 2005. This review informs a broader assessment of Bank operations assisting in the provision of financial services to underserved sectors—primarily microenterprises—but also, as in this case, rural enterprises. This report, therefore, includes some considerations and assessments that are normally not part of a PPAR; specifically, it evaluates project performance after the end of the Bank's involvement, and uses evaluation criteria within a broader, more global perspective than those normally used. The objectives of the Mexico rural finance operation were (i) to support the liquidation of “Banrural,” a financial institution that for several decades had provided subsidized credit for agriculture, accumulated very large losses caused by extreme inefficiencies, low collection efforts, and excessive administrative costs; and (ii) to assist government to put in its place “Financiera Rural,” which would not receive deposits or issue any debt, but was to be totally financed with an endowment created by the government; furthermore, the new agency would maintain the value of its capital endowment in real terms, report periodically to the Mexican Congress, lend only to low- and middle-income rural producers, and move—over time—fully to second-tier lending.
The outcome of the operation is rated highly satisfactory. The assessment draws four lessons: (1) High quality analytical work as well as strong borrower commitment is essential for the success of an adjustment operation involving policy and institutional reforms. Part of the project's success is attributable to long-standing analytical work done by the Bank on Mexico's financial sector, including rural finance. Also, the 2001 Financial Sector Assessment program (FSAP), carried out jointly by the Bank and the IMF, had a decisive impact on the government's approach to the development bank reform in Mexico and the selection of the business model for “Financiera Rural.” (2) The agency's development model is a good option for transforming a state-owned financial institution in instances when full privatization is not feasible and there is a need to expand credit to underserved groups in a cost-efficient manner. Many countries face the need to find a permanent solution to the inefficiency and recurrent losses caused by development banks, which require frequent and costly recapitalizations by governments. The creation of development banks without a social mandate is not a solution because such agencies would not be much different from a commercial bank. “Financiera Rural” presents a better solution because it transforms these banks into finance-oriented development agencies. The development agency promotes financial access for underserved sectors and market development through market-friendly instruments that do not distort market prices, nor discourage private sector activities, such as matching grants and subsidies financed by the government's budget. Its lending tends to be second-tier and is funded out of initial capital endowment or targeted budgetary appropriations, and not from deposits or other liabilities. (3) The strength of institutions depends on the quality of management and the adoption of appropriate procedures and practices. In the case of “Financiera Rural,” the project showed that institutions, their business plans and management do matter, and that the effort spent on defining a Strategic Plan, establishing the appropriate procedures and practices, and in building up a management information system, was worthwhile. Moreover, flexibility in institutional management is crucial to make changes in procedures and practices in response to changing circumstances and objectives. (4) Keeping the operation simple and concentrated on easily verifiable actions contributes to the success of adjustment operations. The sharp focus of this operation on institution-building and financial discipline for “Financiera Rural” proved to be one of the operation's best aspects and contributed to the positive project outcome.
Content Type : Reports , Doc Sub Category : Project Performance Assessment Report , Country : Mexico
January 29, 2014