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Doing Business Indicators and Country Reforms (Approach Paper)

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Doing Business is recognized as highly influential in business regulatory reform worldwide, and it is the most used set of indicators on business regulation. Its indicators are widely used and analyzed in the academic literature. They are a component of many other influential indexes, including the World Economic Forum’s Global Competitiveness Index, the Heritage Foundation Index of Economic Show MoreDoing Business is recognized as highly influential in business regulatory reform worldwide, and it is the most used set of indicators on business regulation. Its indicators are widely used and analyzed in the academic literature. They are a component of many other influential indexes, including the World Economic Forum’s Global Competitiveness Index, the Heritage Foundation Index of Economic Freedom, and the Fraser Institute Economic Freedom Index. It is cited by many countries in their reform plans and in many World Bank Group project documents and country strategies. Although popular, the DB indicators have also been the subject of controversy regarding their methodology, accuracy, and potential biases and the way they are used in shaping and assessing country policy reforms. The Bank Group and the Independent Evaluation Group (IEG) have been called on several times to review DB, largely to respond to such criticisms. In this report, IEG has committed to examine the relevance and effectiveness of the use of DB indicators in guiding client country business environment reforms—both those supported by the Bank Group and those undertaken without its support. This includes an initial stocktaking of literature and existing evaluative evidence to inform an Issues Paper, which will be followed by a Focused Evaluation to assess the DB’s strategic relevance to countries’ reform priorities and to the Bank Group’s strategic agenda. This request came just before the late-August 2020 suspension of the DB report to probe alleged irregularities in the underlying data.

Jamaica: Rural Economic Development Initiative (PPAR)

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The national poverty rate in Jamaica declined over the two decades prior to appraisal, but rural poverty remained stubbornly high. The Government of Jamaica recognized that if the country was to achieve its goal of “Developed World” status, as indicated in the Government’s Vision 2030 plan, economic development in rural areas needed to keep pace with that experienced in urban areas. In 2008, the Show MoreThe national poverty rate in Jamaica declined over the two decades prior to appraisal, but rural poverty remained stubbornly high. The Government of Jamaica recognized that if the country was to achieve its goal of “Developed World” status, as indicated in the Government’s Vision 2030 plan, economic development in rural areas needed to keep pace with that experienced in urban areas. In 2008, the Government requested World Bank support for a project that would promote rural economic development and income generation by improving access to markets for small-holder farmers and by encouraging rural tourism development. Unusual among the Bank’s productive alliance projects, the present project sought to combine both agriculture and tourism, reflecting the unique circumstances of Jamaica’s rural landscape and the potential for agriculture to engage more with the tourism sector, a major contributor to foreign currency receipts. The Bank also determined that the rural agriculture and tourism sectors offered the most significant potential for rural growth and development. The resulting Bank project, the Rural Economic Development Initiative (REDI), was designed to stimulate rural economic growth and increase rural incomes. Ratings for the Rural Economic Development Initiative are as follows: Outcome was satisfactory, Overall efficacy was substantial, Bank performance was moderately satisfactory, and Quality of monitoring and evaluation was negligible. This assessment offers the following issues: (i) For complex productive alliance projects involving the selection of multiple rural subprojects and the introduction of new private-sector market concepts to rural communities, substantial investment to ensure project implementation readiness during project preparation can contribute to a faster and more effective project start. (ii) For productive alliance projects introducing modern technologies and new business management practices into rural populations, ensuring adequate skills and capacity in the implementing agencies will enhance the achievement of results. (iii) Technical assistance supporting private sector market approaches can be critical for linking rural agricultural and tourism operations to new and evolving markets.

Argentina: Basic Protection Project (PPAR)

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The Basic Protection Project was prepared in the aftermath of the 2008 financial crisis, in the context of increased pressure to expand coverage and accessibility of Argentina’s social protection policies. The social protection system had historically been linked to the formal labor market through contributory schemes (pension benefits, unemployment insurance, family allowances, health and Show MoreThe Basic Protection Project was prepared in the aftermath of the 2008 financial crisis, in the context of increased pressure to expand coverage and accessibility of Argentina’s social protection policies. The social protection system had historically been linked to the formal labor market through contributory schemes (pension benefits, unemployment insurance, family allowances, health and housing insurance coverage). Noncontributory programs—for children, the unemployed, and informal workers—were limited. The project aimed at strengthening and expanding Argentina’s social protection system by supporting expansion of coverage and improving the design of two income transfer programs for the unemployed and families with children. Ratings for this project are as follows: Outcome was moderately satisfactory, Risk to development outcome was low or negligible, Bank performance was satisfactory, and Borrower performance was moderately satisfactory. This assessment offers the following lessons: (i) The choice of indicators is critical for incentives to be effective, especially when a short implementation time is expected; but the definition of some of the DLIs and the information used to determine their targets were not discussed in detail at appraisal. (ii) This PPAR had to clarify the understanding of “effectiveness,” as it was not made explicit in project documents. (iii) Institutional strengthening of the MTESS statistics area was an important additional aspect of the World Bank’s support, given the peculiar context in which this project was implemented.

Bhutan CLR Review FY15-19

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This review of the World Bank Group (WBG) Completion and Learning Review (CLR) covers the period of the Country Partnership Strategy (CPS) FY15-19, as updated in the Performance and Learning Review (PLR) dated May 8, 2017. Bhutan is a small, land-locked, lower middle-income country. Between 2015 and 2019 the annual real GDP growth has varied between 6.2 percent and 3.7 percent. The country’s Show MoreThis review of the World Bank Group (WBG) Completion and Learning Review (CLR) covers the period of the Country Partnership Strategy (CPS) FY15-19, as updated in the Performance and Learning Review (PLR) dated May 8, 2017. Bhutan is a small, land-locked, lower middle-income country. Between 2015 and 2019 the annual real GDP growth has varied between 6.2 percent and 3.7 percent. The country’s economic growth was bolstered in recent years by investments in hydropower. Gross National Income (GNI) per capita is now only ten percent below the threshold for upper middle-income countries. Between 2007 and 2017 the poverty headcount ratio (measured at the US$3.20 poverty line in 2011 purchasing power parity terms) dropped from 36 to 12 percent of the population. The CPS noted that Bhutan needed to sustain macroeconomic stability while creating a business environment to promote private sector growth and job creation. The hydro-led growth had created some short-term macroeconomic imbalances, which called for careful management of fiscal and monetary policies. At the same time, it was critical to provide a better investment climate that would be more conducive to private sector development, diversification of the economy and job creation. Also, Bhutan’s large stock of natural capital called for increasing its sustainable contribution to the economy, while protecting the environment and human well-being. Related challenges included rapid urbanization, low agriculture productivity, limited infrastructure, difficult topography, and vulnerability to disaster and climate change. The 2020 Systematic Country Diagnostic (SCD) confirmed these development challenges.

Nigeria CLR Review FY14-19

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This review of the World Bank Group’s (WBG) Completion and Learning Review (CLR) covers the original period of the Nigeria Country Partnership Strategy (CPS), FY14-17, and the update and extension through FY19 as per the Second Performance and Learning Review (PLR) dated May 2018. The implementation of the CPS program was supported by 26 Bank operations with commitments of US$3.7 billion under Show MoreThis review of the World Bank Group’s (WBG) Completion and Learning Review (CLR) covers the original period of the Nigeria Country Partnership Strategy (CPS), FY14-17, and the update and extension through FY19 as per the Second Performance and Learning Review (PLR) dated May 2018. The implementation of the CPS program was supported by 26 Bank operations with commitments of US$3.7 billion under implementation at the beginning of the CPS and 38 new operations with commitments of US$9.4 billion. IFC invested in 28 projects for US$1.1 billion. MIGA issued three guarantees for US$549 million. The CPS design was well aligned with the challenges the country faced and the stated priorities of government. It also responded well to the challenges that arose during implementation. The CLR drew five lessons. Three of the lessons are: (i) achieving significant impact requires commitment beyond the horizon of a CPS, especially in areas such as energy and conflict mitigation; (ii) it can be difficult to accurately gauge the success or failure of results-based operations since they do not respond to traditional Bank tools for measuring success; and (iii) more care is needed in the selection of CPF objectives and results. In addition, IEG highlights the following two lessons from the CLR and builds on them: (i) The experience from expanding coverage of social assistance programs nationally under a common approach provides lessons that can be used to scale up engagements in other areas. Mainly, to combine the use of federal-level rules, policy coordination mechanisms, monitoring systems and data sharing with state-level program implementation and monitoring systems. (ii) Efforts to address design and implementation challenges included the creation of State Coordination Units to break logjams and the Multi-Sectoral Crisis Response Project (MCRP) to bring together efforts in infrastructure rehabilitation and service delivery in three conflictafflicted states. Further progress could entail absorbing and streamlining within the MCRP sectoral program delivery and institutional structures so as to reduce the number of PIUs and facilitate synergies.

Ukraine Country Program Evaluation (Approach Paper)

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Ukraine has significant economic potential, but over the past decade economic growth has been slow and highly volatile. A lower-middle-income country with a population of 44 million and a per-capita gross national income of $2,660 in 2018, Ukraine is endowed with a well-educated and entrepreneurial population, vast areas of fertile land, other natural resources, and a geographic location at the Show MoreUkraine has significant economic potential, but over the past decade economic growth has been slow and highly volatile. A lower-middle-income country with a population of 44 million and a per-capita gross national income of $2,660 in 2018, Ukraine is endowed with a well-educated and entrepreneurial population, vast areas of fertile land, other natural resources, and a geographic location at the crossroads of Europe and Asia.2 Ukraine aspires to join the European Union (EU), but after decades of stagnation, income per capita remains far below that of its neighbors and comparators. The primary goal of this Country Program Evaluation (CPE) is to assess the development effectiveness of World Bank Group support to Ukraine between fiscal years (FY)12 and FY20. A key focus of the CPE will be to examine how well the Bank Group adapted its support to Ukraine’s changing circumstances over the evaluation period and helped build resilience in the face of major crises. The CPE is also expected to provide strategic insights for the preparation of the next Ukraine Country Partnership Framework (CPF), scheduled for FY22.

Comoros CLR Review FY14-19

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This review of the Comoros Completion and Learning Review (CLR) of the World Bank Group (WBG) Country Partnership Strategy (CPS) covers the CPS period, FY14-FY19, and the Performance and Learning Review (PLR) of December 2018. This is the first CPS for Comoros following a series of Interim Strategy Notes (ISNs), the latest of which was prepared in 2010. The WBG programs under the ISNs were Show MoreThis review of the Comoros Completion and Learning Review (CLR) of the World Bank Group (WBG) Country Partnership Strategy (CPS) covers the CPS period, FY14-FY19, and the Performance and Learning Review (PLR) of December 2018. This is the first CPS for Comoros following a series of Interim Strategy Notes (ISNs), the latest of which was prepared in 2010. The WBG programs under the ISNs were limited in scope reflecting the high level of political instability, serious governance issues and related low IDA allocations. The CLR highlighted several lessons about a need to ensure a streamlined project design and flexibility in implementation; value of increased WBG presence on the ground; importance of donor coordination; and a need for greater realism and selectivity in the program. IEG particularly agrees that there is need for greater realism and selectivity in the program, throughout the program, beyond the governance area on which the lesson in the CLR focuses. Being excessively ambitious with respect to institutional targets in a fragile environment increases the risk of program underperformance. IEG adds the following lesson: The decision on a large program expansion at the PLR stage requires a detailed discussion and careful justification in the PLR document because it poses a longer-term implementation risk.

Jordan: Cultural Heritage, Tourism, and Urban Development Project (PPAR)

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An Evaluation of the World Bank Group’s Support to Municipal Solid Waste Management, 2010–20 (Approach Paper)

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Municipal solid waste (MSW) has emerged as one of the most pressing challenges for urban areas across the world. This evaluation is the Independent Evaluation Group’s (IEG) first major study of the Bank Group’s support for MSWM. It is timely given the rapidly increasing scale of MSW in most MICs and LICs and considering the spectacle of massive open garbage dumps in cities as diverse as Manila, Show MoreMunicipal solid waste (MSW) has emerged as one of the most pressing challenges for urban areas across the world. This evaluation is the Independent Evaluation Group’s (IEG) first major study of the Bank Group’s support for MSWM. It is timely given the rapidly increasing scale of MSW in most MICs and LICs and considering the spectacle of massive open garbage dumps in cities as diverse as Manila, Lagos, and New Delhi. The evaluation will highlight the linkages of MSWM with other sectors and themes such as water supply and sanitation, environment, climate change, health, jobs, and social protection. This can point to how the Bank Group can better support the development of synergistic policy frameworks and regulations for MSWM in client countries. This has implications for developing systematic collaboration between various sectors within the Bank Group and among client government ministries and for leveraging opportunities for climate finance.

Bangladesh Country Program Evaluation (Approach Paper)

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The Country Program Evaluation (CPE) for Bangladesh aims to assess the development effectiveness of the World Bank Group’s engagement with Bangladesh during the last 10 years (fiscal year [FY]11–20). The CPE will review the extent to which the Bank Group contributed to Bangladesh’s development outcomes. In so doing, it will assess the extent to which Bank Group support was aligned with the Bank Show MoreThe Country Program Evaluation (CPE) for Bangladesh aims to assess the development effectiveness of the World Bank Group’s engagement with Bangladesh during the last 10 years (fiscal year [FY]11–20). The CPE will review the extent to which the Bank Group contributed to Bangladesh’s development outcomes. In so doing, it will assess the extent to which Bank Group support was aligned with the Bank Group’s corporate twin goals—ending extreme poverty and boosting shared prosperity—and with International Development Association (IDA) priorities. It also will assess how that support adapted over the evaluation period to changing circumstances and priorities. It will cover two country engagement cycles as defined in the Country Assistance Strategy (CAS) for FY11–15 and the Country Partnership Framework (CPF) for FY16–21.