ADB's Poverty Reduction Technical Assistance Trust Funds

Date: July 2008
Type: Evaluation Reports
Subject:
ADB administration and governance; Evaluation; Poverty
Series: Special Evaluation Studies

Description

Two poverty reduction technical assistance trust funds were established in 2001 and 2002 to help ADB serve 600 million of the world's poor. In 2008, an independent evaluation rated these funds a success.

The closure of the two funds on 31 December 2007 opens a gap in support to poverty reduction initiatives--it may need to be filled. For instance, ADB's Strategy 2020 envisions an increasing role for the private sector, yet public-private partnerships for poverty reduction are now underutilized-a strategy to enhance them may need to be worked out.

Background

The Asia and Pacific region is home to 61% of the world's population. Despite remarkable sustained economic growth since the 1990s, the region still has 600 million poor. There seems to be two Asia and Pacific regions: one benefiting from globalization and technological progress; the other comprising underdeveloped and fragile economies. In some parts, high rates of population growth are deepening poverty.

In 1999, the Asian Development Bank (ADB) made poverty reduction its overarching goal. The Poverty Reduction Strategy drawn up that year rested on three pillars-pro-poor sustainable economic growth, inclusive social development, and good governance.

The Cooperation Fund in Support of the Formulation and Implementation of National Poverty Reduction Strategies (NPRS) was launched in 2001 on behalf of the Ministry for Development Cooperation of the Netherlands. The Poverty Reduction Cooperation Fund PRF) was set up in 2002 on behalf of the Department for International Development of the United Kingdom. (Two other related funds are still ongoing: the Poverty and Environment Fund was created in 2003 with backing from the Ministry of Foreign Affairs of Norway and the Swedih International Development Cooperation Agency; and the People's Republic of China Poverty Reduction and Regional Cooperation Fund started in 2005.)

In 2007, the Operations Evaluation Department conducted a Special Evaluation Study on the Asian the Operations Evaluation Department conducted a Special Evaluation Study on the Asian Development Bank's Poverty Reduction Technical Assistance Trust Funds: PRF and NPRS1 as they are closely linked and full commitment was achieved in 2005. The study assessed the funds against their objectives; gauged the contributions and the links to the achievement of ADB's strategic objectives; looked for positive outcomes; evaluated performance with country case studies (in the Lao People's Democratic Republic, Republic of the Marshall Islands, Nepal, and People's Republic of China); and drew lessons to make recommendations.

The study employed deductive and inductive approaches, following the Guidelines for the Preparation of Country Assistance Program Evaluation Reports. A desk study was made of all 106 technical assistance projects (approved from 2002-2007) financed under the PRF, and of all 19 technical assistance projects (approved from 2001-2005) financed under the NPRS, to estimate their level of contribution to the achievement of objectives at the design and completion stages. The outcomes of both programs were also assessed from all completed technical assistance projects with completion reports. The study's coverage was considered representative of the support offered by the two funds. At the strategic level, the relationship and links to ADB's goal for poverty reduction, as set out in the Enhanced Poverty Reduction Strategy and the Long-Term Strategic Framework, were analyzed.

Summary of findings

The main lessons derived from the study were:

  1. adequate analysis during design and consultations with executing and implementing agencies on the planned outcomes and the way these can be achieved are essential;
  2. ownership of technical assistance projects by country and other relevant partners is a significant determinant of success;
  3. most technical assistance projects with nongovernment organization involvement show strong outcomes, suggesting that these organizations can take on stronger roles in poverty reduction efforts;
  4. full delegation of project design and management to ADB by the donors was a major positive factor;
  5. ADB must provide clearer, userfriendly operational guidance to executing agencies; and
  6. flexibility is needed in project implementation to deal with conditions that are beyond the control of the project management.

The study identified the following main issues:

  1. the two technical assistance trust funds have made a significant contribution to policy and strategy development for poverty rduction, and their closure will leave a significant gap in ADB's assistance to poverty reduction initiatives;
  2. ADB's complex procedures, especially its financial arrangements, tend to delay implementation;
  3. public-private partnerships in support of economic growth and social development are underused; and
  4. ADB's primary focus on loan activities limits the institutional incentives for ADB staff to work on technical assistance projects

The main conclusions of the study were:

  1. the technical assistance projects evaluated in the country case studies were successful;
  2. the two technical assistance trust fund programs showed positive outcomes, with a majority of the technical assistance projects demonstrating highly positive outcomes, particularly in policy and strategy formulation, improvement of monitoring and evaluation capacity, mainstreaming of gender into poverty reduction strategies, and environmental management;
  3. technical assistance project management from ADB's resident missions has significant benefits but may overburden their limited number of staff unless ADB's financial arrangementsand reporting systems are simplified;
  4. key areas for future support relate to the wider application of a number of policies and programs resulting from interventionsunder the two technical assistance trust funds;
  5. like most other technical assistance and loan projects, those financed under the two technical assistance trust funds often experienced time overruns, although the extensions are marginally shorter on average than those financed by the Japan Special Fund or Technical Assistanc Special Fund; and
  6. the new Technical Assistance Disbursement Handbook will be a useful starting point for improvements in the efficiency of disbusements.

Recommendations

  • The closure of the NPRS and PRF raises the question of whether a replacement fund is required. It is beyond the scope of this study to make a definitive recommendation. This would entail further analysis by ADB's Management and the Regional and Sustainable Development Department, guided by ADB's Strategy 2020 and using the findings of the study. The analysis should be undertaken before the end of 2008.
  • Given the increasing role of the private sector in ADB's Strategy 2020 and the underutilized public-private partnerships in ADB's poverty reduction initiatives, ADB and its development partners must work more closely together to enhance partnership with the private sector in this area. Within ADB, the Private Sector Operations Department, the Regional and Sustainable Development Department, and the various regional departments should work out a strategy for this purpose by 2009.

Examples

 

EfficiencyEff that Leads to Sustainability (TA 4760-NEP)
Effective Collaboration with Local Government and Community (TA 4142-PRC)
Complex Financial Arrangements May Hamper Implementation and Limit Impact (TA 4353-NEP)

Contents

  • Executive Summary
  • I. Introduction
  • II. Rationale, Objectives, and Approach of the Evaluation
  • III. NPRS and PRF
  • IV. Performance Assessment of NPRS and PRF in Case-Study Countries
  • V. Overall Achievement of Objectives and Outcomes of NPRS and PRF
  • VI. NPRS and PRF Management
  • VII. Lessons and Issues
  • VIII. Conclusions and Recommendations
  • Appendixes