IFI governance


World Bank health work flawed

still pushing privatisation of services

10 July 2009

A recent evaluation of the World Bank’s health work is damning in its criticism of the lender’s approach, particularly in Africa. Meanwhile, the Bank is continuing to push privatisation in public services such as health, education and water, despite fierce criticism.

A World Bank Independent Evaluation Group (IEG) report on almost $18 billion worth of health, nutrition and population work covered projects from 1997 to 2008 across the World Bank Group. It rated 220 projects according to how well they met stated objectives, regardless of how good those objectives were. Highly satisfactory outcomes were almost unheard of, and only about two-thirds of projects had moderately satisfactory outcomes or better. Projects in Africa were “particularly weak”, with only 27 per cent achieving satisfactory outcomes. Overall only 29 per cent of freestanding HIV projects had satisfactory outcomes, falling to 18 per cent in Africa.

Repeating a consistent criticism of past reports, the IEG found that monitoring and evaluation “remains weak” while “evaluation is almost nonexistent.” Only 27 per cent of projects had “substantial or high” monitoring and evaluation structures. This has led to “irrelevant objectives, inappropriate project designs, unrealistic targets, inability to measure the effectiveness of interventions.”

Even those projects that meet their objectives “may be performing at substantially lower levels than their outcomes would suggest.” For example, an on-the-ground assessment of one Indian programme showed that “more than half of the pieces of equipment procured were not delivered or not installed,” while “‘severe construction deficiencies’ were found on the Orissa Health Systems Development Project in buildings that [were] reported to be complete and performing according to specification.” The report also found that pro-poor projects were only about half the total, and that only 13 percent of projects had a specific poverty-reduction objective.

A March review of the implementation of the Bank’s new health sector strategy, which was approved in mid-2007 (see Update 56), also had bad news for the Bank. Despite claims in the response to the IEG that the Bank recognised problems with health project performance back in 2007, the review reported the outcome data for the first 20 months of the new strategy and found satisfactory outcomes in only 52 per cent of projects worldwide. Sub-Saharan Africa had the most projects but an abysmal satisfactory rating of 25 per cent. Most of the projects would have started before the new strategy was adopted, but it points to an unwillingness to adapt existing projects based on lessons learned. Crucially, the review admits that Bank management did not commit enough resources to implement the new strategy until more than one year after it had been finalised.

NGOs have pointedly compared the results of the IEG evaluation to the impact evaluation done of the Global Fund to Fight AIDS, Tuberculosis and Malaria, which some campaigners think is more effective. Its results evaluation found that overall 75 per cent of the portfolio received high ratings while only five per cent showed “unacceptable performance”. In Africa, 69 per cent of programmes received the highest ratings while only 6 per cent showed “unacceptable performance”.

The Bank’s performance is so far below par that some IEG recommendations seem to reiterate the obvious: “undertake thorough institutional analysis, including an assessment of alternatives, as an input into more realistic project design”; “supervision in the field by the Bank and the borrower to ensure that civil works, equipment, and other outputs have been delivered as specified, are functioning, and are being maintained”; and “monitor health, nutrition, and population outcomes among the poor, however defined.” Additionally it called for less complex projects, phasing of reforms, better assessment of decisions to earmark funds for specific diseases, and staff incentives for monitoring and evaluation.

Despite civil society concerns, the IEG recommended that the IFC “support public-private partnerships through advisory services to government and industry and through its investments, and expand investments in health insurance.” However, it also suggested a more innovative contribution the IFC could make for the poor: “expansion of investments in low-cost generic drugs and technologies that address problems of the poor.”

Management essentially accepted all of the IEG recommendations and in the strategy implementation review admitted “much remains to be done during the next phase of the strategy implementation.” It produced a plethora of reform targets for fiscal year 2010.

Emma Seery, head of essential services at NGO Oxfam, said the IEG report “calls into question the UK government’s decision to make the World Bank a central part of their efforts to improve health services in poor countries.”

Still pushing private health

At end April, just after the evaluation was released, the Bank said it was trebling support to the health sector this year, planning to spend $3.1 billion. However, civil society continues to be sceptical of its focus on the private sector’s role in health delivery (see Update 65).

The World Bank’s private sector arm, the International Finance Corporation (IFC), decided in early June to invest $20 million in The Health in Africa Fund, a private equity fund that focuses on private sector health insurance. The fund will be managed by Aureos Capital, which is run from London. The use of a private equity fund means the IFC cannot direct the investments or guarantee the application of its safeguards or performance standards, let alone make development outcome assessments of the final projects.

An NGO coalition paper from May 2008 deplored the fad for private health insurance investment saying little evidence supported its effectiveness. It noted that private insurance “is known to be particularly inequitable unless poor people are subsidised. As can be seen in the United States, [private health insurance] without strong government intervention can lead to rising costs and inequitable access.”

A recent paper on provision of anti-retroviral therapy (ART) in India has thrown fuel on the flames of the debate over whether public or private provision is better. Dr Mead Over, a senior economist at the US-based think tank Center for Global Development, found that low-quality care has negative effects beyond just the patient receiving the care, and concludes “public sector delivery of ART can be justified not only because it protects poor AIDS patients from catastrophic health expenditures, but also because it might differentially ‘crowd out’ the cheapest (and therefore perhaps the worst) of the private sector AIDS treatment. If this crowding out slows or postpones the development and spread of drug resistant HIV, this is an important reason for preferring public to private sector delivery.”

Pushing private education …

A recent Bank report has touted public-private partnerships (PPPs) as a key way to deliver education in developing countries. The report states “The existing evidence from around the world shows that the correlation between private provision of education and indicators of education quality is positive, which suggests that the private sector can deliver high-quality education at a low cost.”

The Global Campaign for Education pointed out that this is in total contradiction to the findings of UNESCO’s Education for All Global Monitoring Report, which finds: “public-private partnerships have a mixed and modest record on learning achievements and equity. And low-fee private schools are a symptom of failure in public provision, not a solution to the problem. The lesson: transferring responsibility to communities, parents and private providers is not a substitute for fixing public-sector education systems.”

… and private water

The IFC is also planning to increase its investment in Veolia Voda, one of the largest water services companies in the world, raising questions again about the dubious development impact of public institutions providing finance to large Western-owned companies for operations in developing countries. The proposed €50 million ($70 million) will be used for expansion of the company’s water and sanitation operations primarily in less-developed regions of Ukraine and Russia.

The Bank is also planning to lend more to the Senegalese government for water projects, including its contract with a subsidiary of French multinational Bouygues. The $50 million will go towards extending the contract of the private provider in urban areas as well as expanding private sector participation in rural areas. Hawa Ba of the Senegal office of NGO Fahamu noted “The process of privatisation has resulted in the right of access to water … being relegated to a lower level of priority.”

It also raises the spectre of an “investment gap”. A UNDP International Poverty Centre working paper by Hulya Dagdeviren and Simon Robertson found that water-sector investment by private actors did not offset the declines in public investment in slums in Africa. The paper casts “serious doubt on the potential gains of privatising network utilities in countries where problems of urban planning and development persist. There remain concerns about the pricing and quality of services provided by small-scale water sellers. Ultimately, these concerns can be resolved by investing in the expansion of the public water and sanitation network.”

A separate working paper from the same centre authored by Kate Bayliss furthers this argument. She writes that private sector involvement was theoretically to transfer risk and responsibility to the private sector. However the World Bank, IFC and donor initiatives mean that “as a result, on offer to the private sector are the least challenging and most lucrative aspects of delivery, which are tightly ring-fenced and bound by guarantees. … risk is not reduced, it is transferred. As a result, African governments, taxpayers and end-users bear high levels of risk in order to accommodate the priorities of investors.” Bayliss recognises that the frameworks for privatisation have changed and become more flexible but they still do not tackle the underlynig problems. “The efforts being made to bring in the private sector are potentially detracting from the development of long-term, cohesive, integrated government policies. Sectors need a coherent strategy rather than ad hoc attempts at privatisation.”