IFI governance


IEG annual report slates World Bank’s education work

highlights problems in health, MENA

13 September 2011

The World Bank’s arms-length evaluation body, the Independent Evaluation Group (IEG), released its Results and Performance annual report at end August, again finding shortfalls and uneven results across the World Bank Group. While the Bank’s leadership has steered the institution towards more private sector work, outcomes in the education sector and the Middle East and North Africa (MENA) region have dropped substantially.

The report is the first time the IEG has combined its annual reports on the public sector arms of the Bank with its evaluation of the private sector arms, the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). It found similar overall outcome ratings in the 2008-10 period as in the 2005-7 period (except in MENA), while IFC satisfactory outcome ratings overall increased to 73 per cent, compared with 63 per cent in the previous period. Though overall project ratings are high, country level performance was lower, with only 58 per cent having “substantial achievement of objectives”.

The IEG found “quite uneven results” in health and education, where “project design and implementation weaknesses include overly complex designs relative to local capacities, lack of necessary buy-in from a broad range of stakeholders, inadequate political economy analysis and consideration of vested interests, lack of sequenced approaches, weak results frameworks, and insufficient monitoring and evaluation.”

education quality objectives were substantially achieved in fewer than half of projects

The evaluation also found that only “56 per cent of education projects were rated satisfactory, a substantial decline since the mid-2000s”. Quality and efficiency suffered most, as “education quality objectives were substantially achieved in fewer than half of projects that had them and achieved efficiency objectives in only 38 per cent.” The IFC’s work in education, which has been very controversial because of potential unintended consequences on the public education system (see Update 70, 56), was also panned by the IEG. While there was a fourfold increase in IFC financing in the sector, “of nine projects that were evaluated in [fiscal years] 05-10, four were successful.” This finding should also be viewed in the light of the fact that success ratings are determined by the Bank’s own internal assessments rather than truly independent evaluations at the project level.

Education sector advocates were startled by the results. David Archer, formerly the head of education at NGO ActionAid International, argued that in light of the findings, “the World Bank ought to stop trying to run its own special projects in education and instead pool its funding with other donors in the Global Partnership for Education Fund supporting ministries of education to deliver on their own nationally agreed education sector plans.”

On the health front, while there were improvements since the IEG published its health sector evaluation in 2009 (see Update 66), “evidence that health results from Bank-supported projects were reaching the poor was lacking.” Critically, “lending and staffing for nutrition and population … had declined dramatically.” The IEG’s review of health sector-wide approaches (SWAps, see Update 71), “could not point to links between the approach and improved outcomes from national health strategies.”

Is it about governance?

The IEG report also provides a cautionary note to those who want the Bank to respond strongly to the Arab spring with massive new lending in MENA (see Update 77, 76). Project outcomes for the region dropped from 82 per cent in the previous period to 54 per cent in 2008-10. The IEG blames this fall on political problems in operations in Iran and the Algerian government losing interest in many planned projects after an oil price increase in 2005 swelled public revenue.

The Bank has also been part of a broader push towards tackling corruption and governance issues in developing countries, but the IEG does not rate the Bank’s anti-corruption work highly. It finds “shortfalls in achieving key public sector reform objectives” and “among recent country programme evaluations, the achievement of anti-corruption objectives was unsatisfactory in 7 out of 10.” At end August the IEG released a separate evaluation of the Bank’s country-level work on governance and anti-corruption (GAC), which showed similarly disappointing results. Despite a new Bank strategy for the issue in 2007, the IEG report finds that “over the FY08-10 period, the Bank’s response to GAC issues in its country programmes and projects has demonstrated continuity without systematic improvement as yet.” The evaluation included six country case studies (Azerbaijan, Bangladesh, Cambodia, Guatemala, Liberia, and Moldova) and “the evaluation’s desk reviews and case studies showed that the Bank’s record in helping to achieve countrywide governance improvements was limited.”

The finance and private agenda

The World Bank Group’s attention is increasingly turning to the private sector and especially the financial sector (see Update 76, 76, 73). The IEG annual report underscores that “Bank lending in the financial sector rose from $5 billion in FY05-07 to $14 billion in FY08-10”. While outcome ratings in the sector were average, worryingly “the long-term contribution to financial sector development of the Bank’s substantially higher lending remains to be seen.” Similarly, trade finance increased considerably but “the development contribution of IFC’s trade finance projects has not yet been systematically tracked.” Critics will be worried about the massive expansion of the Bank Group into areas of work without proper understanding of its development impacts.