Review of 2002 - 2004 Country Strategy Papers

Evaluation Team

This report was prepared by a team comprising Messrs. M. E. N’diaye, Chief Evaluation Officer, F. Turay and V. Wahba (Consultant) under the supervision of Getinet W. Giorgis, Director of OPEV. Ratings were made and peer review provided by Mr. M. H. Manai, P-A Rochon, H. Razafindramanana, A. Aklilu,, all of OPEV and Mr. R. Vandendries, external peer reviewer.

Objective

The present review is the first independent assessment of the content and process of the last generation of CSPs. 

 It draws lessons from those CSPs processed and approved by the ADB Boards during the ADF-IX replenishment period. The objectives of this review are threefold: 

• To assess the content and process of the 2002–2004 CSPs in the light of the Bank’s approved format for 2002–2004; 

• To assess the effectiveness of CSPs as the Bank’s planning and managing tool; and 

• To provide lessons for the next generation of CSPs.

Main Findings

• On the whole, the CSP could be an effective tool for planning the Bank’s lending strategy and the supporting lending program. Despite certain shortcomings, the CSPs’ diagnostic analysis of countries’ political and macroeconomic situations has assisted management in carving out an appropriate medium-term strategy and lending program. Similarly, the presentation and assessment of the countries’ PRSPs (I-PRSPs) or NDAs have been helpful in informing management on priority areas and the overall objective of the program and strategy to be followed. Both diagnostic analysis and the presentation and analysis of the countries’ PRSPs have assisted management in formulating a strategy that is firmly grounded in the countries’ medium-term program.

• The presentation and analysis of the business climate in the private sector has assisted management in identifying potential areas of intervention in support of this sector. Similarly, the presentation and analysis of crosscutting issues have helped management to identify areas of intervention in governance, gender issues, communicable diseases, population issues, environmental conditions, labor standards and regional integration.

• In deciding on operations for middle-income countries, management has found the section of the CSP dealing with country solvency and Bank risks useful. The CSP establishes an explicit link between the risk profile of the borrower country and the Bank’s capacity to contain such risks. Analysis of the evolution of a country’s major risk indicators has also been useful as a management tool for deciding on new investment proposals.

• However, the usefulness of the CSPs in drawing lessons from experience has been limited by: (i) the weak analysis of the track record of portfolio performance; and (ii) inadequate analysis of the lessons learned from previous CSPs.

• The effectiveness of the CSP as a planning tool has been limited by the inadequate use of scenarios and triggers. This has mainly been due to the lack of operational definitions and procedural guidelines in the CSP format. As a result, management has not used scenarios and triggers either to promote a country from the basic scenario to the high scenario, or to demote it to the low case scenario. Similarly, the Country Strategic Framework has been of little use to management, as no regular follow-up reporting on its implementation has been done.

• Over the years, the effectiveness of the CSP as a management tool has improved significantly. CSPs have helped to inform management on economic and social development taking place in RMCs. The review indicates, however, that there is scope for improving the depth of existing poverty analysis. Where good data and poverty diagnosis exist, it is useful to have a general discussion of poverty, recognize the lack of data and present a plan for addressing the gaps. The discussion on governance issues has met this requirement of the format. On the other hand, some shortcomings have been observed in the use of independent and self-evaluations available within the Bank. A conscious effort has been made to introduce selectivity and alignment with PRSP priorities in RMCs. Scenario building and triggers could have generated more internal consultations and, more importantly, close monitoring for corrective actions. This approach was, however, relatively new and difficult to develop.

• In spite of the deficiencies identified, the CSPs could have been used more systematically, as prescribed in the Operations Manual. The manual appears to be less intrinsically linked to the CSP itself than guiding the operational practices within departments.

• The CSP process over 2002–2004 has been constrained by several factors. Its effectiveness has been reduced by: (i) difficulties in coordinating different operational departments for the preparation of CSPs; (ii) low effectiveness of the country teams; (iii) weak communication links with country stakeholders; (iv) the low number of representation offices in RMCs; and (v) inherent weaknesses in the 2002–2004 CSP format. Despite all these shortcomings in the process, the CSP has been a useful source of information on political and macroeconomic developments. It has also guided management in designing an appropriate strategy for the Bank’s intervention in RMCs.

• Given the conditions under which the annotated CSP was launched and the newness of some of its features, it would have been surprising if all aspects were adequately covered and monitored in relatively short period of time. This review calls for some issues to be looked into for the next generation of CSPs. A CSP should be seen as a planning, monitoring and management tool, and not only as an information and programming document for Bank Group interventions in RMCs.

 

 

Main Lessons

Main Recommendations

Recommendation(s) to the Bank:

• The Bank is currently finalizing the format for a Results-Based Country Strategy Paper (RBCSP) to be applied from 2005 onwards. The CSP format should benefit from the lessons learned in applying the 2002–2004 format. Section 3.3 of this review specifically highlights issues to be addressed in the new CSPs

• More effort should go into the depth and coverage of poverty-related issues. Wherever data on poverty are scarce, the CSP should recommend economic and sector work and the strengthening of statistical capacity.

• The Bank’s comparative advantage should appear in each CSP and be determined on solid grounds, with tangible and convincing arguments

• Country performance (including systematic, in-depth self-evaluation) should form part of the CSP, and clear guidelines for the content should be prepared.

• CSPs should continue to emphasize strategic selectivity for Bank Group operations and be more specific about areas of economic and sector work

• If scenario building and trigger mechanisms are to be maintained in the CSP, staff should be given clear operational indications and regular training. A major difficulty in this approach is the distinction between selecting indicators for the CSP period and selecting indicators pertaining to the RMC’s long-term development goals

• Bank M&E system should be introduced for each CSP.

• M&E system should also be introduced at the country level, and Bank support should be provided at this level when required

• Reporting on the strategy matrix should be systematic, regular and verifiable.

• The CSP will have to retain its feature as a tool for informing management of political, economic and social developments in the RMCs, as well as their development priorities (poverty reduction strategy). This will allow the Bank Group to tailor its assistance and to be more relevant and efficient. The content of CSPs should be more analytical and rely on knowledge the Bank Group has accumulated through experience

• Once approved, the CSP should constitute the main reference document for identifying projects (general or sectoral) according to Operations Manual procedures, thereby limiting ad hoc identifications as far as possible. To improve the link between the CSP’s strategy and planning aspects, it is proposed that the project identification process be consolidated Bank-wide. To ensure commitment to the CSP strategy, it is proposed that the review process relating to the Issues Paper of identification missions be improved to maintain consistency between strategy and programming. It is also recommended that country economists be part of the identification missions carried out by the sector/technical departments.

• Because the CSP is likely to cover a longer time-frame and corrective actions may be necessary in the course of implementing the Bank Group’s strategy, an assessment at mid-term review will be required. A report on the implementation of the strategy should be produced at the end of the CSP cycle. The M&E reporting system would have to be implemented and reviewed on a regular basis. In particular, CSP results, CSF updates and intermediate outcomes during the mid-term review should be reported on

• Management should find ways and means to improve coordination among organizational units responsible for preparing the CSP. Their resources, available skills and work programs should be taken into account. Country teams should be reinvigorated with a clear mandate to prepare the CSP and be fully accountable for its implementation and monitoring. In terms of staffing, the ideal situation is where each economist deals with one country. Over the medium term, each economist should not be allowed to handle more than two countries at the most. The Bank should also improve the recruitment of specialists in critical areas (e.g. poverty economics, gender, environment and community organizations

• Budgetary resources needed for the preparation of the CSPs should be presented on a country basis for information purpose. This will allow better coordination among departments and organizational units taking part in the CSPs.

• The CSP process should be revisited with the objective of instilling an element of flexibility in the management of the process

• To improve the contribution of stakeholder participation, it is suggested that the Bank’s team should disseminate the draft CSP among participants well ahead of the workshop