IFI governance


Bank health loans fail check-up

15 June 1999

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The World Bank’s Operations Evaluation Unit recently criticised Bank loans for Health, Nutrition and Population (HNP). It rated only 60 per cent of completed HNP projects “satisfactory”. The quality of the projects’ economic analysis was found to average just 4.25 out of a possible 8 points, rising to 5 for the most recent projects.

Whilst most achieve their short-term physical objectives, only 44 per cent of completed projects are likely to be sustainable after completion, largely because appraisals underestimated recurrent costs or borrower willingness to finance them.

Bank staff fail to match projects’ technical specifications with the institutional environment or views of key stakeholders, including people who will have to implement the projects.

The evaluation notes that

“in public statements the Bank increasingly acknowledges the importance of beneficiary participation in project design and implementation … [yet] OED identified only four projects where beneficiaries were given decision-making power”.

The evaluation recommends piloting small “learning” initiatives to test interventions and build partnerships, but points out institutional constraints which push the Bank and borrowers to approve single large projects. These are: the desire to minimize transaction costs, the lack of resources for supervision and learning efforts and an incentive system which rewards good intentions rather than measurable results. Indeed the evaluation says that “the past record [of measuring the outcomes of investments] is discouraging at best”.

The December 1998 HNP Evaluation is not available from the Bank itself, but can be obtained from the Bank Information Center, 733 15th Street, NW, Suite 1126, Washington DC 20005, USA, bicusa@igc.org or the Bretton Woods Project.