Program for Results (P4R) Consultation Summary. Brussels, 7 April 2011

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1 Program for Results (P4R) Consultation Summary Brussels, 7 April A consultation on P4R was held at the World Bank office in Brussels on 7 April About sixty people attended, representing civil society, think-tanks, multilateral organizations and the European Commission (See participant list). The discussion was moderated by Simon Maxwell. 2. Presentations were made by Joachim von Amsberg, Vice President, OPCS, World Bank, and Fadia Saadah, Manager, OPCIL, World Bank. The presentation explained the rationale for a new instrument, which complements existing instruments for projectbased and policy-based support. P4R would: finance specific sectoral or sub-sectoral expenditures; be disbursed on achievement of results and performance indicators; focus on strengthening institutional capacity; and provide assurance that funds were used appropriately. Detail was provided on technical assessment, disbursement, M and E, and implementation support. A series of consultation questions was outlined, on the overall focus and the operational modalities. 3. Introducing the discussion, Simon Maxwell noted that aid modalities were currently the subject of much discussion, particularly in the context of a renewed emphasis on resultsbased approaches and on transparency. In a European context, there was an active debate about budget support, for example, and a great deal of interest (in the Commission and among Member States) in new modalities, like cash-on-delivery and MDG contracts. It would be useful to assess P4R in this context. He suggested two overarching questions for the discussion: (a) do we understand P4R? and (b) do we think it is a good idea? 4. On the first question, there were some useful clarifications. In particular, Bank staff emphasized the flexibility of the proposed instrument. This was not quite payment for results in a narrow sense, since funds would be available for pre-financing of approved programs (up to a certain limit). It would also be possible to finance input-type interventions, like institutional strengthening. This flexibility was welcomed. It was also noted that the sector or sub-sector focus of P4R would mean that the Bank could be reasonably flexible in introducing the new modality, even in countries where public expenditure systems as a whole would not be strong enough to justify full-scale General Budget Support. Other points of clarification and discussion included: The importance of donor coordination, especially when many donors were adopting similar approaches;

2 The difficult of attribution, especially when lines of causality were long, and hence the need for innovative approaches to M and E; The need to understand P4R as a complementary instrument in the wider context of Bank operations; 5. Turning to the second, evaluative question, the discussion focused on the risks facing the Bank in introducing a new kind of instrument, and on the solutions that could be adopted. The analysis of Risks and Solutions is 2summarized in Table 1. Not all risks were discussed in detail, and not all had immediate solutions hence the table is not complete. Some important points were made, however, for example about: the multiplicity of donor instruments aimed at strengthening results-based approaches; the difficulty of attribution; the risk of undermining the predictability of aid; and the risk that P4R might become an instrument only for stable, middle-income countries. A number of participants emphasized the importance of participation and voice in designing programs and assessing impact. Others laid particular stress on environmental sustainability. Table 1 Analysis of Risks and Solutions Risks A number of donors with similar overlapping instruments Who is in the driver s seat government or people? Some sectors hard to fund Political pressure to disburse How do you define country: people or government? Risk of selectivity What happens when a country doesn t deliver results? Government has to dedicate funds early on to achieve results. What does the government do when they get the money? Might exclude certain countries and certain sectors from being funded. Since some results Solutions Good news all driven by national programs, harmonization Exclude nothing a priori need to learn from it While the Bank lends to governments, a good program needs to work for the people; requires participation; also when we do assessments we will be asking beneficiaries Maybe the government doesn t want to do it, because they want predictability Some eligibility criteria could be considered? 2

3 might be achieved 5-10 years down the line, there might be a tendency to identify results that are easier to measure. Interesting but ambitious it s one thing to build schools but quite another to get teachers to teach. The P4R seems to be talking about changing behavior. Sustainability to what extent, if any, will there be criteria that shows the project will be a sustainable one once the project is finished? How are the results achieved in an environmental & social way? Can you measure? Concept note refers to Conditional Cash Transfer You need a long term commitment though the P4R seems to be geared towards short term results Is pre-financing enough? Donors/multilaterals need to think of attribution issue and the need to show results to their constituencies Is the P4R only for middle income countries? Disbursements might drive money to sexy sectors, those that are easier to measure With P4R, who is in the driver s seat? Who is accountable? Likelihood of success issue Incentives/behavior Participation Very often fund existing, ongoing programs which already produces results Specify indicators Support existing programs. Need to do more work on measurements in a specific setting look at it as we appraise each operation; Not thinking of shifting risks to the partner country; setting incentives in areas where government s efforts make a difference. For example funding a research institute not right mechanism for that. Ongoing school improvement program, where u know the input output mechanism; roads/asphalt lead to roads, so easy; Allows for more local solutions, much more enabling instrument Information/accountability 3

4 6. From a European perspective, some specific points were made about the need to compare design of P4R with other instruments. For example, it was suggested that P4R looked very much like EC Sector Budget Support; rather more so than pure results-based instruments like EU MDG contracts. It was obviously very important to work closely with other donors in rolling out P4R in particular, to ensure that recipient countries faced a consistent set of incentives. It was also important to achieve the right balance between, on the one hand, rewarding performance with additional funding, and, on the other, ensuring predictability of aid. 7. Bank staff acknowledged the validity and importance of the issues raised. In some cases, they thought there were design features of P4R which would enable the instrument to avoid the risks. In other cases, there might be further thinking to do. Among key points made were the following: Attribution: The P4R seeks to support a government led program, and the results are defined jointly with the government. Flexibility in defining the results is important. The attribution of results is to government since it is the government s program. Partnerships: The P4R will promote partnerships by providing the Bank the opportunity to pool resources with other donors. On eligibility, all countries are eligible but the key issue is to assess if the country has the systems in place to carry out a P4R operation. The Bank has a profound commitment to fiduciary, social and environmental safeguards and would make an upfront assessment of these before, and then proceed accordingly. The Bank may exclude those countries and sectors that don t have the strong institutional capacity and those that the remedies can t fix. In a weak institutional environment, the Bank would define the program more strictly. 8. Concluding the meeting, Simon Maxwell said that he felt there was broad support for the proposed instrument and that it was seen as a helpful innovation by the Bank. It had been extremely valuable to clarify the way the instrument would work, and to see where it would fit in the range of Bank project and program lending instruments. He had been struck by the flexibility of P4R, especially the pre-funding possibilities and the scope for defining results in a flexible way to include institutional strengthening. It was also important that P4R would minimize problems with country-level eligibility by working at sector- and sub-sector level. In some of these respects, at least, it was not quite like other donor instruments with the word results in the name. It would be important to avoid confusion in this respect. Participants had made some really valuable points about a range of issues, from definition of results, through to the importance of participation and environmental sustainability. They had also emphasized how 4

5 important it was to maintain strong donor coordination in rolling out new approaches. He thanked the participants for a substantive discussion; and the Bank staff for their presentation and openness to debate. 5