Managing for Development Results at ADB

Results Matter January 2009

ADB’s Results Framework and the 2007 Development Effectiveness Review
By Shiladitya Chatterjee, Strategy and Policy Department

The long-term strategic framework 2008–2020 (Strategy 2020) of the Asian Development Bank (ADB) envisages the development of a new results framework to monitor ADB’s effectiveness in realizing its vision of an Asia and Pacific region free of poverty. The ADB results framework was developed through a yearlong internal and external consultation process during the preparation of Strategy 2020 and approved by ADB’s Board of Directors in September 2008. A similar results framework for Asian Development Fund (ADF) operations was endorsed by ADF deputies at the conclusion of the ADF X negotiations in April 2008 in Madrid. The ADB results framework, while sharing common indicators with the ADF X results framework, contains baselines and targets relevant for ADB as a whole. It is an important tool to help management monitor ADB’s performance in implementing Strategy 2020 and steer the institution to perform effectively according to its strategic priorities. For the latter purpose, the Development Effectiveness Review plays a key role.

Four Levels of the ADB Results Framework

Level 1: Asia–Pacific outcomes. The first level of the results framework tracks the development progress of the region through selected regional outcomes to which ADB contributes with its development partners. Indicators of poverty and human development, gross domestic product per capita, regional cooperation and integration, access to basic infrastructure, governance, and environment have been selected to represent the major development outcomes that ADB is seeking.

Level 2: Contribution to country outcomes through key outputs. ADB will assess its contribution to country and regional outcomes by aggregating key outputs delivered to developing member countries through ADB projects in priority sectors of Strategy 2020: transport, energy, water, education, and finance. Indicators at this level also link outputs to beneficiaries, providing a measure of the impact of operations.

Level 3: Operational effectiveness. Improving the performance of its operations can help ADB increase its contribution to country outcomes. Indicators of operational effectiveness are classified into five main categories:

1. operational quality and portfolio performance
2. finance mobilization
3. strategic focus in operations
4. knowledge development
5. partnerships

Level 4: Organizational effectiveness. This level captures ADB’s progress in increasing efficiency in the use of internal resources and implementing reforms essential to maintain relevance, a results focus, and contribution to development effectiveness. The three main areas addressed are

1. use of human resources
2. use of budgetary resources
3. business processes and practices

Given its use as a key instrument for monitoring ADB’s development effectiveness, the results framework is closely aligned with ADB’s strategic priorities defined under Strategy 2020. It is harmonized with the results measurement systems of the International Development Association and the African Development Fund, and contributes to the harmonization and alignment commitments of the Paris Declaration on Aid Effectiveness. A schematic presentation showing the logical chain of the results framework is in Figure 1.

Figure 1

The results framework is an important instrument for monitoring development effectiveness and for introducing organizational and institutional improvements to ADB on a continuing basis. ADB’s operations vice-presidents are already using several results framework indicators on a weekly basis through a corporate performance monitoring system referred to as “the dashboard.” The results framework will be used to improve the indicator set in the dashboard. Departments are also disaggregating the results framework to allow a closer monitoring of results at their level, and management has begun reviewing performance using the disaggregated indicators.

The First Development Effectiveness Review

The first Development Effectiveness Review—for 2007—was finalized and presented to the Board in November 2008. The review is the main reporting mechanism for monitoring both Strategy 2020 and ADF operations, and adopts the results framework for this purpose. The review consolidates (and retires) three institutional reports on development effectiveness:

1. the report on the implementation of the poverty reduction strategy
2. the report on the reform agenda
3. managing for development results reports

The review will be prepared on an annual basis and will be an important input into the 3-year rolling work program and budget framework, as well as in formulating the President’s planning directions for the subsequent year.

Table 1 summarizes the main conclusions of the 2007 review. Asian economies are growing fast, becoming more integrated, and progressing toward poverty reduction and human development targets. At the same time, the region still struggles to meet some of the non-income poverty targets. Faster progress on infrastructure development and governance is needed to accelerate growth and improve living standards. ADB has delivered considerable sector outputs that have contributed to specific development outcomes. It has made progress in improving its development effectiveness and organizational effectiveness, aided by various change initiatives undertaken since 2004. To sustain progress, the review identifies areas requiring attention, and Management has adopted 13 specific sets of actions responding to these.

Table 1: Summary of Main Conclusions of the 2007 Review