Catalog

	Table of Contents
p. 24 of 25 BACK | NEXT Introduction Background The need for change Practices of other multilateral development banks Policy framework Organizational and resource issues Review of organizational implications Communication and information technology Staffing issues Assessment of budget implications Recommendation

Resident Mission Policy : Organizational and resource issues

---

Assessment of budget implications

Because of the pilot approach and the process nature of this policy, it is difficult to provide precise estimates of the additional costs that will be incurred in implementation. Such costs will depend on the timing and functions of new missions, functional changes at existing missions, staffing changes, arrangements selected for RM accommodation, and the cost of communication and information technology required to effectively link RMs with headquarters. The World Bank’s experience indicates that increasing the number of RMs and field-based staff is likely to increase capital expenditure and administrative expense.

While no precise estimates are possible, an attempt has been made to quantify the broad budgetary implications of the proposed changes in two areas: the opening of new RMs, and the costs of pilot testing (Appendix 4). The cost of a new RM with two headquarters staff is likely to be about $300,000 one-time capital expenditure, and about $800,000 in annual recurring costs. The costs of larger RMs will necessarily be higher, as indicated in Appendix 4. Pilot testing at the level proposed in the paper is likely to cost about $1.65 million extra annually. It is not possible to extrapolate from this projection to the cost of transfer of such functions to a large number of RMs because there may be significant changes during pilot testing. The results of the pilot tests will provide more accurate materials for determining such costs. The possible costs of adjustments to the functions of existing RMs have also not been estimated as these cannot be predicted prior to a review of functions and, if needed, of structure.

ADB has always used its resources in a very cost-effective manner. This practice will continue. Proposals for new RMs (and changes in RM functions) will continue to be rigorously examined to ensure that resources are used in the best possible way. The difference will be the approach to resource allocation, which will start with a review of DMC needs, then an assessment of the most appropriate RM functions and their level, followed by a realistic assessment of resource requirements and their allocation between headquarters and RMs. The Board will continue to approve the final decisions for new RMs individually, along with any additional resource requirements resulting from an expansion in the functions of existing RMs as part of the annual administration expense budget.

Back Staffing issues	Next Recommendation