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Touchstone of Effectiveness
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There is now an unprecedented emphasis on development results and effectiveness in both the Asian Development Bank (ADB) and in its developing member countries (DMCs). We are all increasingly aware of the importance of managing for development results (MfDR) as part of a global trend.
ADB is pursuing initiatives to enhance our results orientation. Eventually, this will apply to everything we do. At the same time, DMCs recognize that it is imperative that aid be used effectively to support nationally owned development objectives. However, despite a promising start, ADB and its DMCs have a long way to go toward demonstrating development results.
MfDR is critical to DMC efforts to meet the Millennium Development Goals (MDGs) in a timely manner. Experience within ADB and among other development agencies tells us this will require long-term commitment and persistence.
ADB has always been committed to development effectiveness, particularly at the project level. But the need to demonstrate and articulate effectiveness at all levels—country, institutional, and partnership levels—has never been greater.
We are operating in an increasingly complex environment, and ADB is under pressure to continue its transformation from a traditional bureaucratic organization to a client-driven, results-oriented institution.
ADB’s borrowing countries have access to development finance from diverse sources, including bilateral aid agencies, other multilateral finance institutions, and private banks. We must ask how ADB can ensure it retains a comparative advantage and relevance in such an environment. Stakeholders are also demanding more accountability, making it clear that ADB must better measure, monitor, and evaluate its work.
Whether in the form of Asian Development Fund negotiations, external multilateral agency assessments, such as those conducted by the United Kingdom’s Department for International Development (DFID) or the Canadian International Development Agency (CIDA), global commitments, such as those contained in the Paris Declaration on Aid Effectiveness of March 2005, or the demands from our DMCs and civil society, the message is clear: ADB must clearly, consistently, and plausibly demonstrate effectiveness in all its operations.
MDG-related assessments, such as the Global Monitoring Report, also inevitably mean that the international finance institutions will be judged by their measurable and monitorable results.
As ADB’s own results-reporting systems mature, there must also be clearer monitoring and evaluation at the department level, both for accountability and more effective management of operations.
ADB must focus on development effectiveness at the country level, not only to achieve agreed poverty reduction goals, but also to help DMCs achieve the MDGs. ADB now requires that all new country strategies and programs (CSPs) be results-oriented; that they clearly identify objectives and describe a credible plan for achieving them; and that they specify time-bound indicators to assist in monitoring and evaluating.
ADB’s results-oriented CSPs must be grounded in country-owned priorities and rely on extensive stakeholder consultations: these principles of alignment and harmonization are enshrined in the Paris Declaration. Such principles are being tested in Nepal, where ADB is implementing its first results-oriented CSP. The plan was crafted—after extensive consultation with various Nepalese institutions—to identify goals that are needed and desired and to link them with specific and measurable indicators (see Local Views Matter).
In Bangladesh, ADB is developing a results-oriented CSP based on similar stakeholder consultations and aid coordination —among ADB, DFID, Japan, and World Bank.
The development of Viet Nam’s CSP, which is likely to be crafted in 2006, is already being inaugurated through the close alignment and collaboration among five banks (ADB, Groupe de l’Agence Française de Développement [AFD Group], Japan Bank for International Cooperation, KfW Bankengruppe, and World Bank) and others. It will be processed so the Government, ADB, and other development partners will be better able to manage the country program for development results. It is expected to constructively address issues, such as harmonization of procurement systems and environmental and social safeguards.
Managing for development results is a “golden thread” through which we can achieve our own Reform Agenda and fulfillment of ADB’s commitments under the Paris Declaration
For ADB, real progress depends on developing the capacity among its DMCs to manage for development results. Country ownership is, quite simply, a precondition. This includes the sustainable capacity to measure, monitor, and manage for results, with specific reference to strategic planning, public expenditure management, monitoring and evaluation, and statistical reporting. Complementary to this, ADB must continue building its own internal awareness, skills, and capacities.
For example, an innovative workshop, entitled “Preparation of Results-Based Country Strategies and Programs,” will be convened to share lessons learned in the process and to discern emerging best practices. Such internal training programs are complemented by country-level workshops for ADB country teams, DMC officials, and development partners.
Given that ADB’s assistance program in any particular DMC represents only a small proportion of development aid—and an even smaller proportion of development finance as a whole—working in partnership essential to achieve country-level results.
ADB collaborates closely with governments and development partners to formulate strategies that contribute to achieving country-level results at the aggregate level. The benefits of moving to results-based CSPs include increased country ownership, more effective support for country priorities, a more efficient division of labor among development partners, and improved accountability for all concerned. ADB believes that such achievements will ensure that it is in line with the commitments contained in the Paris Declaration.
Over the past year or so, through staff meetings, seminars, web-based communication, ADB’s MfDR newsletter, and individual consultations, ADB has endeavored to make staff aware of MfDR. But there is still some way to go toward capturing staff interest and awareness, particularly in demonstrating how improved MfDR approaches may benefit, rather than burden, existing workloads.
The Paris Declaration confirms that achieving results—and measuring, monitoring, and evaluating them—is one of the main challenges to development effectiveness. ADB’s focus on results will be increasingly reflected in key strategic planning documents, particularly in the Work Program and Budget Framework (WPBF).
The WPBF, as ADB’s corporate-wide business plan, provides guidance on the more effective use of resources to achieve development results, and to increase the quality and volume of ADB operations.
Measuring, monitoring, and evaluating results at the department level have a direct bearing on effectiveness, efficiency, client satisfaction, and staff satisfaction. In operations departments, it will be increasingly important to focus on demonstrating the effectiveness of ADB’s interventions and to operationalize MfDR concepts at the department level.
ADB’s South Asia Department, for example, has established a development effectiveness unit to assess institutional capacities, ensure the results orientation of CSPs, and improve project quality at entry (see Results on the Ground).
In the Mekong Department, staff are working with governments and development partners to implement a results focus at the country level—as in Viet Nam’s upcoming results-based CSP—and subregional level, as evidenced by the Greater Mekong Subregion’s Plan of Action linking strategic objectives to outputs, identifying time frames, and setting sector priorities (see Cooperation Works).
ADB’s Southeast Asia Department, through its Philippines Country Office, organized a joint meeting among Philippine government representatives, the World Bank, and other development partners to consider the implications of the Paris Declaration at the country level, particularly in the fields of harmonization, alignment, ownership, MfDR, and mutual accountability. Similar efforts are under way in ADB’s other regional departments.
Improving how we manage for development results in ADB remains a challenging and long-term task. ADB has made a credible start, but much remains to be done. Apart from the important work of strengthening the results orientation of country programs, there are other initiatives that must be pursued vigorously.
The linkages between cost and budget information and organizational decisionmaking remain weak. ADB must introduce a results framework and effective monitoring and evaluation system into all its strategic documents, including the traditional planning directions, the work plan, budget framework, and the budget itself.
Within ADB, the Results Management Unit of the Strategy and Policy Department is collaborating with ADB’s Budget, Personnel, and Management Systems Department to better integrate the budgetary process into ADB’s commitment to development effectiveness.
Initial analysis has focused on improving and regularly updating “staff time coefficients” that measure the level of effort going into particular outputs. The planned-phased approach may eventually lead to full results-based budgeting built on expanded departmental and program costing.
ADB needs to improve the manner in which strategy and policies are translated into action. MfDR can play a much stronger role by requiring valid measurements of performance indicators and more rigorous analysis of costs and resource requirements.
Management needs to be better able to assess the effectiveness of ADB’s actions by sector, DMC, or department. As this process unfolds, improved MfDR is expected to contribute to more focus on selectivity for ADB.
Developing tools to support improved management is essential. For example, the Results Management Unit is exploring the use of “scorecards” to better track key results areas and help translate strategy into operational objectives that drive behavior and performance. In practical terms, a scorecard will identify performance gaps and enable ADB to implement a strategy or policy more effectively and efficiently.
ADB’s Office of Administrative Services has already introduced a balanced scorecard approach as an alternative to managing performance through financial measures alone.
MfDR presents many challenges for ADB. But it is also a “golden thread” through which we can achieve our own Reform Agenda and fulfillment of ADB’s commitments under the Paris Declaration.
MfDR can add value to ADB’s work. If we can demonstrate that we are managing for development results, we may very well achieve improved results; if we cannot, we can expect criticism from most of our development partners. The focus on results, either way, is inescapable.
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