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Report of the Task Force on Improving Project Quality : IV. Findings, Recommendations and Action Plan
A. Findings and Recommendations1. Bank Responsiveness to Clients99. The Task Force has concluded that the Bank needs to be more responsive to the needs and absorptive capacity of its DMCs. Overall, the Bank needs selectively to strengthen its staff capabilities, reorient its business practices and enhance its institutional capacity to improve its responsiveness to the needs of DMCs. The operational focus within the Bank has in the past been largely towards the transfer of resources to DMCs. The Bank therefore needs to increase its skills, particularly in economic, sector and social analysis, for developing sharper country focus as well as in the cross-cutting areas such as environment, WID, HRD and poverty reduction. 100. The Task Force has recognized that, among the institutional strengthening priorities of the Bank, the highest should be given to those directly related to improving project quality and to responding more effectively to the needs of DMCs. Accordingly, increasing responsiveness to clients is a major objective of the organizational reforms recommended by the Task Force, including realignment of operational departments, improving the effectiveness of operational support from special units and offices, reorientation of CPSO to provide more country-specific analysis of implementation performance, and increasing the role of ROs in project administration through greater delegation of authority. 101. Correcting the approval culture within the Bank will also help improve its responsiveness to DMCs by allowing more time and resources to be utilized for focusing on issues such as absorptive capacity , beneficiary participation and institutional strengthening. For this purpose, the Bank's business practices need to be modified so that development impact rather than loan approvals is given emphasis. Thus, a change in the corporate culture is necessary to ensure that equal importance is given to the achievement of project quality at all stages of the project cycle and overemphasis on project processing and loan approval is reduced. 102. Partly as a consequence of the approval culture, the Bank has devoted fewer resources, both by way of staff inputs and system requirements, to monitoring and supervising projects. While well-established system requirements have been prescribed for loan processing missions, the lack of such requirements for project monitoring and supervision missions makes them under-resourced and less effective. 103. Developing a sharper country focus is another important aspect of improving responsiveness to clients. The operational difficulties in translating a country focus into project selection and design need to be overcome by strengthening the linkages among the various elements of country economic and programming work, and between such work and project design. The sustainability and implementability of projects depend crucially on the consistency between the country ESW and the project design. 104. In consideration of the foregoing, the Task Force's key recommendations for increasing the Bank's responsiveness to DMCs include the following:
2. DMC Ownership and Capacity105. The operating methods and corporate culture within the Bank have often provided inadequate attention to encouraging ownership and commitment on the part of borrowers and beneficiaries. The pressures to meet processing deadlines have tended to inhibit the involvement of borrower agencies and beneficiary groups, especially at the early stages of project preparation. Similarly, there is inadequate emphasis on the Bank's role in building capacity in DMCs in all phases of the project cycle. 106. The Task Force has noted that the Bank's DMCs are differentiated according to their institutional capacities. Some have well-developed institutions in certain sectors, while others lack adequate institutional capacity to de:sign and implement high quality projects. Others, such as PIDCs, have unique physical and economic aspects that require special attention, particularly when it comes to augmenting institutional capacities. Appreciation of these differences is important for designing successful projects for institutional strengthening. 107. A project-based approach to institutional strengthening has been found ineffective in creating permanent increases in institutional capacities. This has led the Task Force to conclude that the Bank needs to review and reformulate its strategy and policy towards capacity building in its DMCs and to develop a more comprehensive and appropriate capacity-building program. 108. Sometimes inadequate commitment by DMCs to projects may be due to weak involvement of the government and the beneficiaries throughout the project cycle. Nurturing and building DMC commitment during project preparation is time consuming and costly; moreover, the mechanisms for beneficiary consultations are still not clearly defined. The commitment at the local level is consequently poor. However, in the view of the Task Force, more intensive efforts must be undertaken by the processing missions, with AGSD support, to build DMC ownership and commitment. Such efforts are essential for designing and implementing high quality projects, and for completed projects to be well utilized and maintained. 109. The effect of some business practices of the Bank at the project preparation and implementation stages on the ownership and commitment of DMCs also needs to be examined. The establishment of a Project Office and the recruitment of a Project Manager are seriously taken up in most DMCs only after loan approval. Questions regarding responsibility sharing and Bank procedures and policies are also generally addressed only at the project inception stage. These practices dilute DMC ownership and commitment, and need to be changed. Likewise, a one-time spring cleaning operation to weed out inactive and slow-moving projects also needs to be undertaken to garner enhanced resources and commitment of DMCs for the remaining portfolio. Some of the key recommendations of the Task Force in this context are as follows:
3. Accountability for Project Quality in the Bank110. The Bank has not decentralized its systems and functions along with the steady expansion of its activities. This has resulted in overcentralized business practices that dilute accountability, delay decision making and contribute to implementation problems. This overcentralization has affected the evolution of ROs as effective institutions for project administration, circumscribed review missions' authority to take decisions in the field, reduced the managerial responsibilities of line departments, tied down scarce staff resources to routine administration, and diverted them from the higher quality activities of planning and management. This calls for greater delegation coupled with identification of accountabilities. The Bank's systems, practices and procedures need to be modified to establish clear responsibility for project quality at various phases of the project cycle. The Task Force considers that there should be a clear determination of accountability for the various stages in the project cycle. 111. At the entry phase, there is need to establish accountability for the integrity of the project design by harmonizing the functions of the specialized units with those of the Projects and Programs Departments. The envisaged organizational review by the Steering Committee will contribute also to improved client responsiveness as it is expected to reduce delays in decision making and to streamline Bank operations. 112. Owing to the lesser emphasis given to implementation in the project cycle, responsibility for the delivery of high quality results at this phase has not been entrusted to any specific point. This is another dimension of the approval culture that promotes project processing activities while giving less importance to project quality at the other stages of the project cycle. This situation can be reversed only when the corporate culture gives equal importance to project quality at other stages of the project cycle as it does to project processing and approval. Likewise, increased attention of Management and Department Directors to project implementation activities would also signal to the DMCs that the Bank is attaching greater importance to project implementation. 113. The effective utilization of feedback from both completed and ongoing projects into programming, project preparation and implementation activities requires improvements in the feedback instruments, as well as in the process of its utilization. A major feedback activity, namely post-evaluation, has provided limited feedback into Bank operations until recently. Monitoring of implementation has rarely extended beyond routine aspects of physical and financial progress. The substantial scope that exists for improving project design and implementation through lessons conveyed through feedback mechanisms has not, therefore, been fully exploited. 114. The key recommendations of the Task Force to enhance accountability within the Bank and to ensure the effective use of feedback are as follows:
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