Catalog

Review of ADB's Policy on the Performance-Based Allocation of Asian Development Fund Resources

The Asian Development Fund (ADF) is designed to provide loans on concessional terms to developing member countries (DMCs) with low per capita gross national product (GNP) and limited debt repayment capacity. The small size and location of countries may also be a criterion for ADF eligibility. ADF resources are made available on highly concessionary terms and are limited in supply.

In 2001, ADB elevated the role that country performance played in allocating ADF resources. Based on an examination of the 2001 policy and its implementation, and drawing on the experience with performance based allocation methods elsewhere in the multilateral system, the Review of the Asian Development Bank's Policy on the Performance-Based Allocation of Asian Development Fund Resources introduces a number of enhancements. The Review:

• strengthens further the link between allocation and country performance



• increases the weight given to governance in the measurement of country performance



• provides favorable treatment to less populous countries that are performing well



• aligns country policy and institutional performance criteria with that of the World Bank



• clarifies the basis for allocations to support disasters and emergencies, post-conflict needs, sub-regional projects, and weakly performing countries
  
  
• commits to full public disclosure of numerical performance ratings beginning with the 2005 country performance assessment exercise
  
  
• strengthens accountability for the policy and rationalizes implementation arrangements
  
  

View the document [ PDF: 238kb | 51 pages ]. To read, you need Acrobat.

Contents

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Executive Summary

1. Introduction

2. The Performance-Based Allocation Policy

1. Objectives, Principles, and Scope of the Policy
2. Policy Impact
3. Uses of Asian Development Fund VIII Resources
4. Implementation




3. Lessons, Issues, and Directions

1. Measuring Country Performance
2. Balancing Objectives
3. Implementing the Policy




4. Enhancements to the Policy

1. Principles to Guide Revisions
2. Country Performance Criteria
3. Country Ratings
4. Proposed Allocation Formula
5. Extra-Formula Allocations
6. Disclosure
7. Monitoring the Policy
8. Summary




5. Implementation

1. PBA Focal Point
2. Country Performance Assessments
3. The Allocation Process
4. Interim Arrangements




6. Recommendation

1. Asian Development Fund Approvals Prior to Performance-Based Allocation
2. The Revised Country Performance Assessment System and Allocation Formula
3. The International Development Association's Approach to Allocating Resources to Postconflict Countries