THE WORLD BANK AND HUMAN CAPITAL DEVELOPMENT The case for
supporting education Eduardo Velez Bustillo Peking University
Beijing, May 29, 2015
Slide 2
World Bank Mission (it has changed since 1994) Until a couple
of years ago, its mission was to fight poverty for lasting results
and to help people help themselves and their environment by
providing resources, sharing knowledge, building capacity, and
forging partnerships in the public and private sectors. Now is to
end extreme poverty within a generation, by 2030, and boost shared
prosperity.
Slide 3
World Bank Group 1 The World Bank Group consists of five
institutions: 1. The International Bank for Reconstruction and
Development (IBRD) 2. The International Development Association
(IDA) 3. The International Finance Corporation (IFC)
Slide 4
World Bank Group 2 4. The Multilateral Investment Guarantee
Agency (MIGA) provides political risk insurance guarantees to
private sector investors and lenders. And, 5. The International
Centre for the Settlement of Investment Disputes (ICSID) provides
arbitration and conciliation services for governments and private,
foreign investors in dispute.
Slide 5
Board of Directors Representatives of each member country. EDs,
representing 25 chairs. France, UK, Germany, USA, Japan; and now
Saudi Arabia, Russia and China. All others are groups of countries.
The Independent Evaluation Group (IEG) is an independent,
three-part unit within the World Bank Group. IEG-World Bank is
charged with evaluating the activities of the IBRD and IDA (The
World Bank), IEG-IFC focuses on assessment of IFC's work toward
private sector development, and IEG-MIGA evaluates the
contributions of MIGA guarantee projects and services. IEG reports
directly to the Bank's Board of Directors through the
Director-General, Evaluation.
Slide 6
The WB Group is: The worlds largest funder of education The
worlds largest external funder of the fight against HIV/AIDS A
leader in the fight against corruption worldwide A strong supporter
of debt relief The largest international financier of biodiversity
projects The largest international financier of water supply and
sanitation projects
Slide 7
Products Financing About $22 billion (historically, but lately
it went up to 40, 50, 70, 40, . Will stay in the 30-40ish)
Knowledge (TA in the form of AAA: advocacy, analytical work, study
visits (South-South exchange, and North-South cooperation)
Slide 8
Lending Amounts
Slide 9
In Fiscal Year 2011 The World Bank Group committed $57.3
billion, distributed in credits, loans, grants and guarantees. In
Fiscal Year 2013 IBRD and IDA committed $31.6 billion ($2.7
billions for education)
Slide 10
Characteristics of Education Projects in 2010s About 30 loans
approved About $2.0 billion but cycle by regions $507 million IBRD;
$1.5 billion IDA Assessment (average year) 7 (26%) good 18 (67%)
acceptable 2 (7%) marginal None poor
Slide 11
IBRD and IDA Lending by Region 2011
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IBRD and IDA Lending by Theme 2011
Slide 13
IBRD and IDA Lending by Sector
Slide 14
IBRD top 10 borrowers
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IDA top 10 borrowers
Slide 16
Human Development IBRD and IDA Lending by Region
Slide 17
Education IBRD and IDA Lending by Region
Slide 18
Slide 19
FY12 education portfolio of $9 billion with operations in 73
countries New commitments for education rose to $3 billion in 2012,
up from $1.8 billion in 2011 Education Lending by Sub-Sector,
2012
Slide 20
FY12 education portfolio of $9 billion with operations in 73
countries New commitments for education rose to $3 billion in 2012,
up from $1.8 billion in 2011
Slide 21
Education Policy before the 1980s 1945-1963No policy (soft
sector) 1963-1980s (early)Manpower, VOCED 1966 first loan to LAC
was Chile. VOCED (2.7 million). Tunisia first loan also supporting
VOCED LAC secondary technical and post-secondary education because
it was supposed to meet the alleged manpower needs
Slide 22
Education Policy in the 1980s Internal debate, confusion and
lots of bricks and mortar (like in the 1970s), but: Less emphasis
on:More emphasis on: PlanningAnalysis/policy ManpowerLabor force
Firm labor surveysHH surveys Opinion surveysTracer studies
Occupational categoriesEducational profiles Public sector
onlyPrivate and informal Technical efficiencyEconomic efficiency
Output-labor relationsCost-benefit analysis Skills-specific
trainingGeneral training School-based trainingFirm-based training
Free education/TrainingCost recovery Filling long-term skills
gapsCorrecting present LM distortions
Slide 23
Education Strategy in the 1990s Education for All (Jomtien in
1990): - expansion of ECD - universal access to primary education -
reduction in adult literacy - improving in learning achievement
process of teaching and learning, quality teaching, acquisition of
foundation skills, opportunities to learn more advanced skills PPP
and PCP Achievement monitoring (assessments systems) and impact
evaluation From hardware to software Higher education: a review of
the experience
Slide 24
Current Education Strategy Education Systems Expansion of ECD,
OOSC (pockets), Secondary and HE, including S,T&I Study/Learn
from what works, but also from what does not work.. Learning for
ALL -Cognitive -Non-cognitive
Slide 25
World Banks Education Strategy Invest Early, Invest Smartly,
Invest for All
http://siteresources.worldbank.org/EDUCATION/Resources/ESSU/463292-1306181142935/Chinese_Exec_Summary_2020_FINAL.pdf
Slide 26
Strategic Priorities for 2020
Slide 27
How does the WB gets there?
Slide 28
Two schools of thought and techniques and their influence in
policy.. 1.Forecasting manpower requirements 2.Estimating the
profitability of investment in education
Early exponents and practitioners 1. Forecasting = dominant
World Bank, OECD, ILO, Governments of several countries with the
support of these international organizations 2. Profitability=
minority Academics, especially University of Chicago, Columbia,
London School of Economics, then World Bank,..
Slide 31
Early Human Capital School (1960s) Completely different
philosophy Based on economics Costs and benefits are the key
variables Away from headcount towards skill quality Policy: Invest
in lower levels of education
Slide 32
From planning to policy
Slide 33
Today s practice Profitability = Dominant Forecasting =
Remnants
Slide 34
1990 s expansions Education quality Institutional framework
Political economy
Slide 35
Economics of education A relatively new field in economics that
revolutionized the way we formulate and apply education policies
Brought analytical rigor to the field by documenting the many
effects of education on socioeconomic development
Slide 36
Why Economic Analysis? Research indicates that: 1.Strong
relation between quality of cost benefit/cost-effectiveness
analysis and project outcomes indicative of importance of good
quality analysis at design 2.Quality of fiscal impact analysis,
beneficiary assessment, poverty analysis and overall economic
analysis related to performance 3.Poorly prepared projects more
likely to perform worse Bank-wide, projects rated poor 4X more
likely to be unsatisfactory than those rated good consistent across
regions Improve quality of portfolio Reduce unsatisfactory projects
under supervision This lecture uses materials from George
Psacharopoulos, Emmanuel Jimenez, Harry Patrinos, Elizabeth King,
Luis Crouch, Emiliana Vegas, Paul Gertler and indeed, Eduardo
Velez.
Slide 37
1. Linkage with country and general ESW 2. Quantitative
analysis of alternatives 3. Financial and fiscal impact assessment
4. Cost-benefit and cost-effectiveness analysis 5. Sensitivity
analysis 6. Institutional analysis 7. Poverty impact analysis 8.
Environmental assessment 9. Outline of economic performance
indicators/criteria 10. Overall project justification 10 Dimensions
of Economic Analysis
Slide 38
Slide 39
Slide 40
Slide 41
Conceptual Framework Skills toward Employability and
Productivity (STEP): An Integrated Framework for Skills Development
41
Slide 42
Human Capital (Skills) and Productivity Human Capital Working
with ExistingDeveloping Technology BetterNew Technology Acquiring
Processing New Information Knowledge
Slide 43
Important: Different types of skills Cognitive Skills Socio-
emotional Skills Technical Skills Human Capital 43 Labor Market
Outcomes
Slide 44
Where do we want to be? Worldwide education is seen as
important
Slide 45
A virtuous cycle: Improved HCD contributes to growth which
stimulates further HCD Supply of skills - Quality education -
Improved health -Adequate social protection - Inclusiveness Skills
Outcomes Demand for skills - Business environment - Employment
opportunities - Innovation and entrepreneurial capacity
Productivity Economic Growth Competitiveness
Slide 46
Rate of Return Not Applicable Sector Rates of Return Sector RoR
and Project- Specific C/B Project Specific RoR Pre-1990s ECON
Reports 1992 Priorities and Strategies, 1995 2000 First Economics
of Education Course Ranking Education Projects Evolution of the
Application of Economics in Education Projects 2013
Slide 47
Slide 48
Overall Ranking of Projects in the Education Sector Improved 0
20 40 60 80 100 Good and Acceptable Marginal and Poor CY93
FY13
Slide 49
Performance in the 2000s
Slide 50
Recent Performance In the 2010s (with more projects and less
staff) fortunately performance as good as in the 1990s However, too
many are just acceptable
Slide 51
Education for Poverty Reduction & Shared Prosperity
Education is one of the most powerful instruments for reducing
poverty and inequality, and laying basis for sustained growth
Slide 52
The State of Education 1. Challenge of promoting learning 2.
Growth in alternative models 3. Evidence base expanding
Slide 53
The State of Education 1. Challenge of promoting learning 2.
Growth in alternative models 3. Evidence base expanding
Slide 54
Returns to schooling 10%
Slide 55
Increased Focus on Measurement TIMSS PISA
Slide 56
Many More in School But Learning? Half the students in
middle-income countries lack the skills to succeed in further
education or work
Slide 57
The State of Education 1. Challenge of promoting learning 2.
Growth in alternative models 3. Evidence base expanding
Slide 58
Growing Market for Education
Slide 59
Private Sector Growth 59 Private enrollment as % of total
student enrollment Source: World Bank 2013 Low income countries
Middle income countries High income countries
Slide 60
The State of Education 1. Challenge of promoting learning 2.
Growth in alternative models 3. Evidence base expanding
Slide 61
Evidence Revolution
Slide 62
More Evidence 300 impact evaluations
http://datatopics.worldbank.org/EdStatsApps/Edu%20Evaluation/evalu
ationHome.aspx?sD=E
Slide 63
How to Translate into Policy?
Slide 64
Education inputs Learning for All Quality of policies &
instituti ons Quality of policy implem en- tation Quality &
quantit y of educati on deliver ed Systems Approach
Slide 65
Supporting innovative approaches to education systems research
SABER in Action Thailand
Slide 66
Increasing capacity amid adversity SABER in Action
Resilience
Slide 67
Informing partner engagement around the world SABER in Action
WFP
Slide 68
Systems Approach for Better Education Results SABER
www.worldbank.org/education/saber
Slide 69
8. Motivating teachers to perform 1. Setting clear expectations
for teachers 2. Attracting the best into teaching 3. Preparing
teachers with useful training and experience 4. Matching teachers
skills with students needs 5. Leading teachers with strong
principals 6. Monitoring teaching and learning 7. Supporting
teachers to improve instruction Effective Teachers 8 Goals of
effective teacher policy systems
Slide 70
22 Teachers Available 6 School Autono my in process 13 domains
available 12 8 country reports 15 Student Assessm ent 10 2
applicati ons in Africa 20 Private Sector in process 4 regional
reports 21 ECD available 98 country reports 16 applicati ons
Nigeria 11 applicati ons Pakistan 7 applicati ons Uganda 48
applicati ons in East Asia 45 applicati ons in Europe & Central
Asia 34 application s in Middle East/N. Africa 10 applicati ons in
Americas & Caribbea n 25 applicati ons in South Asia 148
countries 300+ engagements 9,800 related data points SABER
Slide 71
What works? Analytical work, practical evidence, and know-how
related to education programs and policies are critical to
improving the performance of education systems around the
world
Slide 72
System assessment and benchmarking tools, along with data, to
assess the capacity of an education system to improve learning
outcomes Impact evaluations and other analytical work that can
inform policies and interventions
Slide 73
The Bank has come a long way in the use of Impact Evaluations
More than 211 completed impact evaluations 324 active impact
evaluations applied in 72 countries
Slide 74
With 13 IBRD Impact Evaluations and 54 IDA Evaluations And
Education leads the way..
Slide 75
But remember it was not always the case..
Slide 76
People 9,000 staff from 168 countries (2/3 in HQ) + a number of
consultants (could be 7,000 but varies) 124 Country Offices
(Decentralization from late 1990s) Human Resources: From Regular
Staff to Fixed-term staff (since about 2008) Benefit package
IMPLICATIONS FOR FUTURE STAFF
Slide 77
Where they come from? USA2999 Indian1682 French 486 Chinese 465
Filipinos 417 British 394 Indonesian 324 German 301 Brazilian 281
Pakistani 276 Kenyan 261 Japanese 257
Slide 78
What is the most necessary ability to work in the World Bank?
1. Personality (Briggs Myers test): Introverted over Extroverted
Sensing over Intuition Thinking over Feeling Judging over
Perceiving 2. PhD (about 20 universities; economists before not
now); trend 3. Country of origin. Not quotas, but preferred
countries.
Slide 79
Judging vs Perceiving characteristics Judging: Decisive,
Controlled, Good at finishing, Organized, Structured, Scheduled,
Quick at tasks, Responsible, Likes closure, and Makes plans
Perceiving: Adaptable, Relaxed, Disorganized, Care- free,
Spontaneous, Changes tracks midway, Keeps options open,
Procrastinates, Dislikes routine, and Flexible
Slide 80
How do you get in? To succeed, the World Bank will take the
commitment of the brightest, most talented people in the world.
Dedicated women and men like you. Bank Internship Analyst (before
Junior Professional Associates) Young Professional Program
Consultants (STC, ETC) Fixed term staff Partnerships
Slide 81
Internships Academic requirements Fields (Fluency in English is
required and knowledge of languages such as French, Spanish,
Russian, Arabic, Portuguese, and Chinese are advantageous). The
Bank pays an hourly salary to all Interns and, where applicable,
provides an allowance towards travel expenses. Interns are
responsible for their own living accommodations. Most positions are
located in Washington, DC (some positions are offered in country
offices) and are a minimum of four weeks in duration. Summer and
Winter.
Slide 82
Junior Professional Associates now. Analyst Eligibility
Criteria. The following are minimum requirements to be eligible for
the Junior Professional Associate employment category : Be 28 years
of age or younger Hold the equivalent of a Bachelor's degree (with
some relevant experience), a Master's, or be a PhD candidate with a
superior academic record. Be fluent in English. Be fully proficient
in one or more of the Banks working languages: Arabic, Chinese,
French, Portuguese, Russian, and Spanish is a plus The World Bank
Group welcomes applicants from all over the globe regardless of
gender, nationality, ethnic background, and disability. IT WAS A
BEAUTY!!!! My experience WB (HR Washington DC) will be willing to
have a session with you, if interested.
Slide 83
Young Professional For more than 50 years, the World Banks
Young Professionals Program has been the preeminent program
preparing global development leaders (about 1,700). If you have a
passion for international development and a drive to lead, we want
to hear from you. Minimum Requirements: Be 32 years of age or
younger (i.e. born on or after June 1, 1983); PhD or Masters degree
Be fluent in English, but note that full proficiency in one or more
of the Banks working languages: Arabic, Chinese, French,
Portuguese, Russian, and Spanish is desired but not required.
Specialize in a field relevant to the World Banks operations such
as economics, finance, education, public health, social sciences,
engineering, urban planning, and natural resource management Have
at least 3 years of relevant professional experience related to
development or continued academic study at the doctoral level.
Slide 84
Consultants and Fixed-term STC ETC Fixed-term
Slide 85
WB Capital Flows IBRD lending is primarily financed by selling
AAA-rated bonds in the world's financial markets. IBRD income also
pays for World Bank operating expenses and profits contribute to
IDA and debt relief, and humanitarian situations. The Bank has
US$178 billion in what is known as "callable capital," which could
be drawn from our shareholders as backing, should it ever be needed
to meet IBRD obligations for borrowings (bonds) or guarantees. Has
never been used. IDA the world's largest source of interest-free
loans and grant assistance to the poorest countries, is replenished
every three years by about 40 donor countries. IDA accounts for
nearly 40 percent of lending.
Slide 86
What's the best part of working for the Bank? Can you share
with us your personal experience? 1. Workplace that combine: (i)
value quality of high academic standards; (ii) productivity of
private sector; and (iii) benefits of European civil servants, but
this is changing.. 2. Opportunity to meet people from all over the
world. I have friends in USA, Australia, the Philippines, China,
Mexico, Argentina, France, Spain, Eritrea, Zimbabwe, Korea, .. My
last team included people from: Pakistan, Australia, Indonesia,
Vietnam, Germany, France, Mongolia, China, Korea, Thailand, Laos,
the Philippines, India, USA, Mexico, PNG, Senegal, Cambodia, Japan,
Spain, England,
Slide 87
What's the best part of working for the Bank? Can you share
with us your personal experience? 3. Opportunity to visit places
(about 80 countries) and worked in about 30 (and traveled
extensively in some like China (19 out of 30 Provinces; and Mexico
(27 out of 31 states)). And to places where not many people go. 4.
But most important is the couple of times I had when I made the
difference (I was in the right place at the right time). But this
is a topic for another session.
Slide 88
How the WB does business in China Follow Chinese protocol: (i)
MoF, NDRC; (iii) Sectoral Ministries; or (iii) Provinces WB lends
to MoF and MoF on-lends to Provinces and/or Counties Definitions:
Amounts/Sectors (China) Design (China with TA from WB)
Implementation (China (Ministries, Provinces, Counties) and WB
accompany supervision for Fiduciaries (FM and procurement) and
Safeguards
Slide 89
89 PROJECT CYCLE 1 Topic Identification Concept Review Project
Concept Note (PCN) Purpose Agreement in principle with Borrower to
start project preparation. Agree on Project Development Objectives,
demonstrate linkages to higher-level CAS outcomes and provide
framework for project preparation. Inform Bank management of
proposed project concept, confirm resources needed for preparation,
and initiate quality enhancement process.
Slide 90
90
Slide 91
91 Country Assistance Strategy, CAS The Country Assistance
Strategy (CAS) establishes country-level outcomes to be achieved
through Bank support, and indicates how specific projects would
contribute toward achieving these outcomes. Projects identified in
the CAS should be consistent with government-led development
strategies such as: Poverty Reduction Strategy Paper (PRSP) for Low
Income Countries (LICs); Transition Support Strategy (TSS) for
Post-Conflict Countries; Other development strategy papers for
Middle-Income Countries (MICs); and Government sector strategies/
programs if available.
Slide 92
92 Identification Identification indicates agreement between
the Borrower and the Bank to start preparation of a project for
possible Bank financing. In most cases, project identification
arises from prior discussions between the Borrower and the Bank on
alternative investment priorities, including such approaches as:
Preparation of a sector strategy and prioritized investment plan by
the Borrower. Joint economic and sector work by the Borrower and
the Bank. Discussions of alternative investment choices in the
context of previous Bank-financed projects.
Slide 93
93 Objectives: Identification During identification, the Bank
Task Team completes the following tasks in cooperation with the
Government: Confirm that the project is consistent with the agreed
CAS and is a priority use of Bank resources. Reach preliminary
agreement on the Project Development Objective. Obtain Bank budget
for project preparation and develop a processing schedule Select
the Task Team Agree on the institution(s) to be responsible for
project preparation and/or implementation. Agree on preliminary
work plan and sources of funding (if applicable) for project
preparation. Consult with key stakeholders (including other
Development Partners) as needed. Identify key issues and obstacles
(risks) that may affect the likelihood for achieving the objectives
of the project Decide on the type of investment lending instrument
to be used.
Slide 94
94 Bank Processes: Identification For Projects Mentioned in the
CAS: Sector Manager selects Task Team and designates Task Team
Leader (TTL). Sector Department enters Activity Initiation Summary
(AIS) in SAP to release budget for project preparation and
establish key processing benchmarks to monitor preparation. Board
notified through Monthly Operational Summary (MOS). For Projects
not Mentioned in the CAS: CASs for Middle Income Countries
generally agree on main areas of emphasis, but do not specify
projects in advance. For Lower Income Countries, new priorities may
arise since CAS was completed. Country Department approves project
identification after seeking endorsement of Government counterpart
to project concept. Remaining steps are the same as above.
Slide 95
95 Selection of Task Team Sector Manager or Task Team Leader
(TTL) selects Task Team with skills needed to complete preparation.
Task Teams generally include: TTLresponsible for managing work
program and budget and ensuring quality (with SM approval). Sector
specialistsas needed. Lawyer (when to bring him/her to a mission?)
Procurement Specialist (when to bring to the field?) Financial
Management Specialist (same question?) Safeguard Specialist (if
applicable)(same question?) Finance Officer (previously
Disbursement Officer) Other skills (e.g., M&E) as required by
nature of project.
Slide 96
96 Country Ownership Strong country ownership is the single
most important factor in determining whether or not development
projects will succeed. In order to determine if a proposed project
has strong country ownership, the Bank will often rely on: Prior
Economic and Sector Work to identify issues affecting the
achievement of expected outcomes and present options for addressing
these constraints. Consultations with major stakeholders to see
whether there is a broad consensus in the country for changes.
Development communications activities to inform potential
beneficiaries about the proposed project and obtain feedback.
Slide 97
97 Responsibilities: Identification Borrower: Establishes
Project Development Objective (PDO), with advice and support from
Bank Task Team. Assumes responsibility for project preparation.
Bank Task Team: Shares global and technical knowledge with Borrower
to improve development effectiveness of project design. Works with
Borrower to ensure project is consistent with Bank operational
policies and requirements. Development Partners (if applicable):
Advise Borrower and Bank on related activities that may impact on
achievement of PDO. May participate in preparation and financing of
proposed project.
Slide 98
98 1.Results Chain. The causal sequence included in a project
going from inputs to outputs through given processes, and then to
medium and long-term outcomes 2.Country Level Objectives (Results
or impact). Generally framed at the CAS level. It is the long-term
outcome requiring multiple projects and/or other interventions to
be achieved, and usually cannot be attributed specifically to a
single project. 3.Performance. Degree to which a project operates
according to specific standards or criteria including achievement
of the expressed outcomes. 4.Project Development Objective
(Outcomes). Medium-term effects or behavioral changes that can be
directly attributed to a project. Represents the outcomes expected
to be achieved by the end of the project. They contribute to the
Country Level Objectives, but are often not sufficient in
themselves to achieve them. 5.Outputs (products). Works, goods,
services, organizational changes and other activities provided by
the project activities. 6.Process (activities). Operational
arrangements by which given inputs are combined to produce the
desired project outputs 7.Inputs. Financial, human and material
resources, as well a space, time and organization needed to produce
the project outputs. Introducing the Results Chain
Slide 99
99 Funding for Project Preparation Borrowers may request Bank
assistance to obtain funding for project preparation. Potential
sources include: Borrower s own funds and/or Government budget.
Proceeds of previous Bank loans (if available for this use).
Project Preparation Facility (PPF). Requires approval by Country
Director. Trust Funds. Generally administered directly by the
Borrower, depending on the terms of the grant agreement. Funds
provided by other development partners. PHRD from Japan (probably
does not exist anymore)
Slide 100
100 Stakeholder Consultations The following agencies should be
consulted as needed during project identification and preparation:
Government counterpart agency--responsible for agreement with the
Bank on CAS objectives and work program. Borrowerassumes financial
obligation for repayment of Bank loan or credit. Guarantor
(optional)may guarantee the financial repayment obligation of the
Borrower. Implementing agenciesresponsible for project preparation
and/or implementation. Direct beneficiariesshould be consulted as
early as possible. Other stakeholderse.g., civil society, NGOs.
Development Partnerse.g., potential cofinanciers.
Slide 101
101 Key Risks Before agreeing to proceed with the proposed
project, the Bank should have a clear idea about the potential
risks likely to be experienced, as well as possible mitigating
measures. The type of potential risks to be assessed at
identification include: Country and Sector-Level Risks:
Macroeconomic framework; Country engagement; Country/sector
governance and systemic corruption Operation Specific Risks: Sector
policies and institutions Technical/design Implementing capacity
and sustainability Financial management Procurement Social and
environmental standards Other risks (like cost escalation,
prevalence of failure in similar projects, adverse external
development affecting costs/benefits of the project and risks
specific to operations in conflict-affected areas) These risks and
mitigating measures are captured in the Risk Assessment
Template.
Slide 102
102 Risks categories 1 Country and Sector-Level Risks:
Macroeconomic framework Is there a likelihood of serious
macroeconomic or financial instability due to external or internal
factors? Country engagement Is there broad political commitment to
policies and programs agreed with the Bank? Are special interest
groups able to block key agreements? Country/sector governance and
systemic corruption Are policies and programs developed with
adequate transparency and involvement of key stakeholders?
Slide 103
103 Risks categories 2 Operation Specific Risks: Sector
policies and institutions Are country institutions able to
formulate and implement sound sector policies and mitigate risks?
Technical/design Is the project innovative, or does it relay on
well-tested technology or approaches? Implementing capacity and
sustainability Does the implementing agency have the technical and
institutional capacity to implement and operate the proposed
project? Financial management Is there a sound financial management
system in place, including audits?
Slide 104
104 Risks categories 3 Operation Specific Risks: Procurement
Does the implementing agency have the capacity and commitment to
conduct procurement in a fair and transparent fashion? Social and
environmental standards Are the any significant social and/or
environmental safeguard issues? Other risks Is there a track record
of successful implementation or a prevalence of failure in similar
projects? Are there issues with possible cost escalation and/or
adverse external development affecting costs/benefits of the
project? Are there risks specific to operations in
conflict-affected areas?
Slide 105
105 Risks rating system High (H) Serious developmental or
reputational risk that cannot be fully mitigated Substantial (S)
Important developmental or reputational risk that can be partially
or wholly mitigated Moderate (M) Moderate developmental or
reputational risk that can be largely mitigated Low (L) Negligible
developmental or reputational risk
Slide 106
106 Review of Key Concepts CAS identifies Country Level
Objectives to be achieved. Government and Bank agree on areas of
emphasis for Bank program, and possibly (especially for Lower
Income Countries) a list of projects for the CAS period. Projects
should be strongly owned by the Government, generally based on a
longer period of engagement with the Bank. The Results Chain is
used to demonstrate how project outcomes help to achieve Country
level objectives. Identification represents an agreement between
the Government and the Bank to proceed with project
preparation.
108 Project: Improve the Quality of Education of all the Basic
Level Public Schools in the State of Guanajuato, Mexico Outcome
(Project Objective) The Intermediate Why: Improve the learning
outcomes in math, language and sciences against a baseline Products
(Components) The What: Component A: Increase the access, retention
and completion rates of students in the basic level of public
schools in Guanajuato Component B: Improve the pedagogical
classroom transactions Component C: Improve school management and
leadership Activities (Processes) The How: A: School construction
and rehabilitation; hiring of qualified teachers; dissemination
campaigns B: Relevant pre and in- service teacher training of
appropriate quality; provision of textbooks and other learning
inputs; learning assessment measuring systems C: Leadership
programs; team building, MIS Inputs The With What: Money, trainers,
curricula, know how Higher Order Outcomes (Impact) The Greater Why:
Ensure a skilled labor force contirbuting to increment the
productivity, and therefore, the economic growth of the State of
Guanajuato
Slide 109
Using a Results Chain What are the intended results of the
program? How will we achieve the intended results? How will we know
we have achieved the intended results? A Results Chain answers 3
questions:
Slide 110
The Results Chain in a Typical Program o Budget o Staffing o
Training o Studies o Construction o Training plan completed o Cash
transfer delivered o School built o New practices adopted o School
attendance up o Poverty reduced o Income inequality reduced o Labor
productivity increased Results-based management
ImplementationResults Financial, human, and other resources
mobilized to support activities. Actions taken or work performed to
convert inputs into specific outputs. Project deliverables within
the control of implementing agency SUPPLY SIDE. Use of outputs by
beneficiaries and stakeholders outside the control of implementing
agency DEMAND SIDE. Changes in outcomes that have multiple drivers.
INPUTSACTIVITIESOUTPUTSOUTCOMES LONGER-TERM OUTCOMES HIGHER ORDER
GOALS
Slide 111
Example 1: Results Chain ActivitiesOutputsOutcomes Longer-term
Outcomes Education o Teacher training o Textbooks developed o
Teachers trained in new methods o Textbooks delivered o New methods
used o Increased completion rates o Increased test scores o
Increased labor productivity Social Protection and Labor o CCTs
delivered o Targeting system o MIS o CCTs delivered to target
households in accordance with conditions o Increased food
consumption o Increased child health visits o Decreased poverty o
Lower child mortality
Slide 112
112 AN OBJECTIVE (OR INTERMEDIATE RESULTS) Is the specific
outcome attributed to the effects of the investment (project)
Expresses and describes the intended change It is measurable and
observable
Slide 113
And finally. A couple of comments regarding new lending
instruments..
Slide 114
Results-based Financing Financing arrangements that
encourage/reward achievement of results: Output-based Financing
Financing for Product / Service /Activity Produced
Performance-based Financing Financing contingent on meeting agreed
performance milestones
Slide 115
OUTPUT-BASED FINANCING How it works: Disbursements made against
pre-defined costs for producing an activity or an "output (i.e.,
one trained youngster) Pre-defined unit costs are determined a
priori, based on a detailed analysis of the costs of various inputs
needed to produce an output Unit costs are adjusted periodically
Advantages: Provides a strong linkage between "outputs" and
disbursements Facilitates disbursements by reducing the
transactions costs; can exclude from the pre-defined cost those
items that would require more complex procurement, etc. Monitoring
and evaluation systems should integrate financial and project
results systems Systems and effective standards of administration
and follow both financial as hiring Disadvantages: Requires
preparation of detailed cost studies up-front, during preparation
Doesnt ensure the achievement of outcomes, but of outputs.still a
stronger link than disbursement against inputs
Slide 116
Performance-based Financing How it works: Financial instruments
or mechanisms within a financial instrument that link the funding
or disbursements to completion of tasks or accomplishment of
milestones or achievement of specified outputs or intermediate
outcomes Financial Instruments DPL (matrix of conditionalities) APL
(programmatic loan with pre-defined triggers to move ahead with
subsequent phases of the program) Traditional (disbursement pari
passu with purchases of inputs) Mechanisms within one instrument:
Milestones, performance triggers permit disbursements only after
actions taken, activities completed, results achieved, etc.
Conditions for disbursement Conditions that withhold either initial
disbursements or disbursements beyond a pre-established amount
until actions taken, etc. Disbursement percentage - an increase or
decrease in percentage upon taking action, complying with
pre-established condition Date-based incentives e.g., increase (or
decrease) in disbursement percentage if an action is taken by a
certain date, etc.
Slide 117
Examples of Projects / Programs that Apply Performance-based
Disbursements National government CCT program that disburses
against the value of transfers and technical assistance for the
program Incorporates incentives and / or awards for performance,
linking the value and pace (pari-passu) of Bank disbursements to
progress in carrying out technical assistance and implementing
agreed measures Advantages: Allows for immediate financial support,
even if and when the overall program is judged to need
strengthening before being scaled up Establishes linkages between
program implementation and its technical improvements Creates
incentives for the implementing agency and the Borrower, and in
this case the Ministry of Finance, to support the timely
implementation of technical assistance and program improvements
BR-Family Health, BR-Qualisus and others incorporate performance-
based mechanisms for disbursement of federal funds to sub-national
into the design of the program, strengthening financial and
operational monitoring systems, results monitoring. By definition,
Bank disbursements have a link to performance although not
specifically in the Banks disbursement mechanisms
Slide 118
Examples of Projects / Programs that Apply Output-based
Disbursements AR Rural Education; NI Education; Indonesia Bos-Kita
National programs that finance part of the program expenditures at
the provincial level or at the school level Ministries transfer
amounts that have been pre-defined on the basis of cost of each
activity funded (number of certified students, enrollment of
students, etc.) Annual agreements between the respective Ministries
and each province or school that specify the expected results, pre-
determined unit costs for each service, the work program and
assigned budget The amounts transferred to the province or school
are considered the eligible expenditure" for purposes of Bank
disbursements The pre-defined unit cost of each activity is
reviewed and adjusted periodically Advantage: facilitates Bank
disbursements while utilizing financial and implementation
information systems to monitor progress towards accomplishment of
project/program objectives
Slide 119
Examples of Projects / Programs that Apply Output-based
Disbursements AR LLL Activities are financed through payments made
by the Ministry of labor to Implementing Entities (public or
private) on the basis of the quantity of products delivered and a
standard unit cost. Output based activities finance the
registration of occupational norms, the certification of
evaluators, curricula development and publication, and adult
education activities. The unit cost of the output based activities
(occupational norm, curricular alignment activity, and adult
education activity) was determined through analysis of the actual
costs of its components. And these do not follow procurement rules
Project supports: (i) registration of about 300 labor norms, (ii)
certification of about 800 evaluators, (iii) development of about
300 curricula, (iv) certification in primary and secondary
education of about 100,000 adults