Evaluation

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Special Evaluation Study of the Asian Development Fund VI–VII Operations
Completed: 2003

Completed in 2003, this study evaluates the impact of the Asian Development Fund (ADF) for 1992–2000. During this period, 336 loans were approved, totaling $12 billion for 318 projects.

This report seeks to answer the following:

• has ADB fulfilled its obligations and the commitments made during the ADF VI and VII replenishment discussions?



• has ADB reoriented its overall strategy and operational priorities to support poverty reduction, while continuing efforts to stimulate broad-based and sustainable economic growth?



• what lessons can be drawn from ADB's experience during this period?

To address these questions the report evaluates projects, processes, and policies against ADF VI–VII obligations and commitments.

  Summary of Findings

• There is evidence that ADB has made good progress in meeting the ADF replenishment commitments between 1992 and 2000. The greatest area of improvement has been in strategic planning. Addressing gender concerns in projects has been below expectations.



• A medium-term framework for strategic planning was adopted and has become an integral part of the institutional culture.



• Efforts to address project-related issues that affect the poor, such as resettlement, have improved during the report period, and are continuing to improve with experience.



• Formal processes for environmental classification of projects and inclusion of mitigation measures have been mainstreamed, however the number of projects directly addressing environmental issues has not quite met expectations. The country graduation policy has addressed some immediate concerns and some developing member countries (DMCs) have formally graduated from ADF.



• ADB adopted a policy on Women in Development in 1985. However, incorporating gender concerns remains a difficult area for ADB.

  Lessons Identified

1. Sustainable Economic Growth
   
   
   • ADF should be used more strategically for bigger impacts since resources are limited and the needs in the Asia and Pacific region are overwhelming.
   
   
   
   • Closely coordinated partnerships are important for sustaining impact.
   
   
   
   • The link between country strategy and project selection needs to be stronger.
   
   
   
   • The capacity of DMC institutions and counterparts should be strengthened. Capacity building has often been too closely related to the needs of the project rather than to the needs of the institution, raising concerns about the sustainability of the capacity-building efforts.
   
   
   
   • More effort is needed to include gender issues in institutional development. Core gender and development projects addressing structural and institutional reforms are needed in addition to gender mainstreaming to support sustainable development.


2. Inclusive Social Development
   
   
   • ADB needs to be more strategic about poverty reduction. The country investment strategy should be tied to the country poverty reduction strategy.
   
   
   
   • Real progress in social development requires economically sophisticated, multidimensional investments, with leverage achieved through strategic projects.
   
   
   
   • ADB needs more human development projects specifically linked with strengthening institutional capabilities, which requires longer-term engagement. In addition, such projects should specifically target improving human capabilities.
   
   
   
   • ADB's most important contribution to poverty reduction is to bring new thinking on good economic and social policy to DMC governments. Knowledge products and services are very important in this regard.
   
   
   
   • ADF should be part of ADB's targeted strategies to enhance the impact of development assistance.


3. Governance for Effective Policies and Institutions
   
   
   • ADB needs to leverage ADF more efficiently in partnership with its DMCs to further develop media independence and fiscal transparency, and ensure an open and democratic electoral process, nongovernment organizations, and broader public participation in policy development.
   
   
   
   • Efforts to establish new legislative and institutional frameworks for managing a market economy should continue.
   
   
   
   • Frameworks are also needed for all markets, goods and services, and labor and capital. Civil codes to provide a sound legal basis for business activity need to be created.

  Key Recommendations

• There is a need to make a clearer specification of expected results at the country level and how ADB's program of lending and nonlending products and services will contribute to attaining these.



• A country program framework could be introduced that would provide:
  
  
  • A clear goal statement along with indicators and targets based on the millennium development goals
  
  
  
  • A purpose statement, also with indicators and targets, which reflects the contribution expected from ADB's program of loans, technical assistance, and other products and services over the country strategy and program period (in quantifiable terms)
  
  
  
  • Outputs, i.e., the various products and services ADB expects to deliver over the period. Assumptions and risks at each level could usefully be drawn from governance assessments.
  
  



• This approach would enable the goal of each approved project to be linked to delivering on the country program framework purpose. Thus, project-level goal attainment would be assessed at the country level only through the periodic country program framework evaluations. Project performance would be assessed only to the purpose level.



• Adoption of the country program framework would need good analytical work on which to base resource allocation decisions across sectors and thematic areas.