Capacity Development

in Project Design

Review of 2006 Investment Project Portfolio

Mark NelsonWorld Bank Institute

Capacity Development Unit

2

Background and Methodology A period of intense review of capacity

development in the World Bank and beyond World Bank and other reviews showed many

shortcomings First stage of study looks 217 WB investment

projects approved in FY06 One questionnaire per PAD based on definitions

and instructions Imperfect exercise: Just how much can be said at

the design stage? A work in progress: Further insights downstream

Lending instruments in FY06 Investment Loans (244 projects)

Specific Investment Loans (163 projects) Adaptable Program Loans (33 projects) Technical Assistance Loans (15 projects) Sector Investment and Maintenance Loans (11 projects) Emergency Recovery Loans (19 projects) Financial Intermediary Loans (3 projects)

Development Policy Operations (53 projects) Development Policy Loans (31 projects), Poverty Reduction Strategy Credits (16 projects) Programmatic Adjustment Loan (6 projects)

For this presentation, we are dealing only with 217 investment loans for which Project Assessment Documents

are available.

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Project Distribution by Region

Regional Distribution

5%7%

26% 25%23%

14%

0%

5%

10%

15%

20%

25%

30%

AFR ECA LCR EAP SAR MENA

The Paris Agenda

Paris IndicatorsIndicators

1 Ownership – Operational PRS

2a Quality of PFM systems

2b Quality Procurement systems

3 Aid reported on budget

4 Coordinated capacity development

5 Use of country PFM systems

6 Parallel PIUs

7 In-year predictability

8 Untied aid

9 Use of programme-based approaches

10 Joint missions & country analytic work

11 Sound performance assessment framework

12 Reviews of mutual accountability

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Was CD mentioned in the “Development Objective”? Did the project have self-labeled capacity development

components? Types of CD inputs (training, technical assistance,

knowledge sharing, study tours) Levels of CD addressed (enabling environment, institutions

and policies, organizational and individual) Implementation arrangements (PIUs) Cost of CD inputs Basic information about region, networks, and types of

loans, and lending instruments Did the project involve coordination among donors?

Questions covered

Is capacity development included in the “Development Objective”?

Yes59%

No37%

Unclear4%

N=217

Is capacity development included in the “Development Objective”?

66%

73%

57%

10% 13%0%

10%

20%

30%

40%

50%

60%

70%

80%

Projects w/CDcomponent

Multiple CDcomponents

Single CDcomponent

No CDcomponents

Unclear

N=190 N=101 N=89 N=19 N=8

Evidence of co-financing with other partners?

No 54%

Yes 46%

Capacity development component costs as percentage of total project cost

37%

63%

12% 6%0%

10%

20%

30%

40%

50%

60%

70%

Projects w/CDcomponent

Multiple CDcomponents

Single CDcomponent

PIU cost

N=173 N=85 N=88 N=100

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CD Inputs - Definitions Training: Structured learning activities in an expert-

learning mode through which knowledge and skills are transmitted and acquired

Consultant Assistance/TA: Foreign or local consultants hired to provide assistance and expertise

Knowledge Sharing: Discrete events with emphasis on peer learning, knowledge exchange and awareness raising

Study Tours: A group of stakeholders visits selected countries or organizations with specific goals in acquiring knowledge not readily available at home

Twinning: Cooperation between two institutions where knowledge and skills are transferred

Capacity development inputs

93%

91%

55%

52%

17%

13%

0% 20% 40% 60% 80% 100%

Consultants

Training

Knlg Sharing

Equipment

Study Tours

Unclear/other

Consultants Training Knlg Sharing Equipment Study Tours Unclear/other

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Stated aims of capacity inputs

78%

71%

35%

33%

4%

0% 20% 40% 60% 80% 100%

Institutions andPolicies

Organizations

Individuals

EnablingEnvironment

Unclear

Institutions and Policies Organizations Individuals Enabling Environment Unclear

n=217

9%

49%

42%

12%

34%

54%

0%

10%

20%

30%

40%

50%

60%

Yes No Unclear

With foreign donors other than the World Bank With no other foreign donors

Quantitative Descriptions of Baseline Capacity

Project Implementation Unit used?

No23%

Unclear5%

Yes72%

Percentage of 217 investment projects

86%

78%73%

68%

60%

40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

EAP ECA AFR LCR MENA SAR

PIUs by region

(n=30) (n=55) (n=56) (n=51) (n=10) (n=15)

Highlights from the Project Portfolio

Examples of good practice?

Organizational levelChange management, audits and reviews

Institutional and policy levelResolution of policy differences and process issues.

Enabling environmentCoordinating government-wide reform

Institutional Reform and Capacity Building in Kenya

Fertile Conditions for Capacity Growth

Individual levelIntensive training and technical assistance

for civil service staff

Institutional Strengthening and Health Sector Support Project in Niger

Sector-Wide Approach (SWAp) focused on institutions, organizations and individuals

Detailed diagnosis of capacity constraints

Coordination among all stakeholders

Management capacity developed within government – no PIU

Human Capital

Enabling Environment

& Governance

Health Sector Organizations

Second Multisectoral STI/HIV/AIDS Prevention Project in Madagascar Harmonization & donor coordination Use of informal networks (video-clubs,

community gathering places) Well defined indicators Comprehensive multi-sectoral

approach to preventing the disease

Judicial Modernization Project in AzerbaijanClear capacity objective

with actions focused on constraints Weak management

impedes policy implementation

Weak human capital deters professionalism

Lack of court facilities impedes modernization

Lack of information limits accessibility and accountability

Physical Facilities&

Technology

Human Capital

Information

Management

DevelopingJudicial Capacity

Features of project designBenchmarks, specific

targets, engaged partners, accountability Focus on systems,

organizational functioning

Training of 1000 officials by CoE, GTZ, USAID

Strong emphasis on information flow, accountability

Implementation by the Ministry of Justice which is accountable for results and sustainability

Physical Facilities&

Technology

Human Capital

Information

Management

DevelopingJudicial Capacity

Education Excellence and Equity Project in Albania

SWAp focused on improving quality of learning conditions, increased enrollment in general secondary education

Identifies short-term, intermediate and long-term goals

Focus on capacity of Ministry of Education and Science – no external PIU

Strengthening leadership,management and governance of

education system

Improving conditions for teaching and learning

Improving and rationalizing education

infrastructure

Higher educationreform

Components

Local government capacity development in Uganda: An ongoing project Long-term process: Started in early 1990s Significant resources allocated competitively

through grants to local districts Strong country leadership Culture of participation Demand from public and from local leaders Huge effort at monitoring and evaluating

outcomes “Every morning when I get out of bed, I feel the

demands of the people coming through every window,” George Ntulume, Wakiso District Administrator

Uganda’s District Governments

Wakiso District Population 1 million(includes Entebbe)

Some Preliminary Conclusions

Progress towards Paris commitmentsIndicator 2005 2008 Target

Joint country analytic work 39% 66%

Program-based approaches (DPLs, SWAps, basket financing)

50% 66%

Parallel PIUs 46% 16%

Disbursements on schedule 89% 94%

Aid dispersed using country procurement systems

n/a n/a

Aid dispersed using country financial management systems

[65] [77]

Missions done jointly 19% 40%

TC coordinated with other donors 47% 50%

SWAps cost more to prepare…

$428,000

$360,000 $351,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

Average preparation cost (US$)

SWAps All projects DPOs

…and may take longer to prepare

14.6 14.4

8.9

0

2

4

6

8

10

12

14

16

average months preparation time

SWAps All projects DPOs

months months

months

Disincentives to harmonization and alignment Time and efficiency constraints Career incentives linked to quantity of

“deliverables,” not “good behavior” Focus on corruption creates impression

that country systems are less reliable Budget: Coordination costs more

Many ways to skin a cat? Highly diverse approaches to, and definitions of,

capacity development Some projects include a single, discrete capacity

development component (often focused on project implementation)—“The Capacity Component”

Others contain multiple CD components focused on broader capacities, Paris-inspired approaches

Will we see a difference between these two approaches downstream?

Yet, growing evidence of attention to long-term capacity development A number of projects which stand out of the crowd, but the

proof will be in the results downstream Greater attention to capacity in recent Quality Assurance

Group assessments, after QAE7 showed “institutional development/capacity building” as the most frequently cited development objective (cited in 60% of the sample). In QAE6, analysis had focused almost exclusively on capacity for implementation.

Criticisms of the “capacity is for implementation” line of thinking from Independent Evaluation Group in its 2005 evaluation of capacity development in Africa, the Task Force on CD in Africa and by OECD/DAC report

Areas for further work Are there special capacity approaches that

traditional investment projects can bring? When capacity is not planned carefully in design,

can it appear in implementation? Task managers say weak countries benefit from the strong attention that comes from traditional projects.

Do PIUs reduce corruption in the weakest countries?

Does the stronger performance of DPLs, particularly under programmatic approaches, extend to capacity development? (DLPs were 100% “Mostly Satisfactory” or higher compared to 91% for investment loans in QEA7)