Country Assistance Program Evaluation for the Lao People's Democratic Republic (2006)
This Country Assistance Program Evaluation (CAPE) assessed the performance of the Asian Development Bank's (ADB) Country Strategies and Programs (CSP) for the Lao People's Democratic Republic (Lao PDR) starting from 1986 (when the country embarked on a transition from a centrally-planned economy to a market-oriented system) up to 2004.
The CAPE methodology was based on a results-based evaluation framework, which
- developed a systematic set of criteria (under relevance/harmonization and positioning/coherence) to assess the quality at entry of the CSP;
- assessed development effectiveness of the CSP in contributing to achieving intermediate outcomes at the sector level (bottom-up), linked to long-term impacts, including the Millennium Development Goals (MDGs), achieved at the country level (top-down), through institutional impact on the country's Managing for Development Results (MfDR) capacity; and
- provided a results matrix to trace the results chain of contributions of ADB's inputs and outputs to sector outcomes and country's impacts.
Summary of findings
The overall performance of the CSP for the Lao PDR was found to be successful, based on the combined ratings of the following levels of assessment:
- At the strategic level: the quality at entry of the CSP was found to be partly satisfactory due to lack of coherence in positioning ADB as a major development partner. Although about half of the total ADB lending during the CAPE period went to two major infrastructure sectors (transport and energy), the remainder of the lending was spread thinly in many sectors;
- At the country level: the CSP's contributions to the country's MfDR capacity (especially in terms of governance as related to public financial management) and long-term impacts (top-down) was found to be partly satisfactory;
- At the sector level: sector performance was found to be successful, particularly in terms of effectiveness in achieving sector outcomes (bottom-up) in transport and energy which accounted for about half of the total ADB lending during the CAPE period; and
- ADB's role: ADB performance was found to be satisfactory in terms of client orientation and timely response to the country's needs.
- The country's high aid dependency ratio and limited government absorptive capacity were reflected in inadequate counterpart funds. In line with ADB's new cost sharing policy, which allows the government of each developing member country to finance a lower proportion of counterpart funds based on a specific country's cost-sharing ceiling, ADB's Lao Country Team should determine the Lao PDR's cost-sharing ceiling for aggregate portfolio of the next CSP period during the preparation of the 2006 CSP, and pursue collective policy dialogue with other development partners for the Government to determine whether the total amount of aid should be reduced to be more in line with its absorptive capacity.
- Given the ADB's lower indicative planning figure for the Lao PDR, the next CSP should focus on fewer sectors based on government priorities, involvement of other development partners, and ADB's comparative advantage (sector performance) in accordance with the CAPE's findings.
- In line with the Paris Declaration thrusts, ADB should develop more strategic partnerships with other development partners (e.g., joint CSP and program-based approach) to provide a more coherent assistance program.
- Performance of program lending should be improved by providing a more realistic reform package consistent with the Government's capacity, and making future program lending more manageable (e.g., using "cash-on-delivery" or cluster program modality).
- The role of advisory technical assistance (ADTAs) and economic, thematic, and sector work should be strengthened to develop sector strategies. They should also address non-sector specific factors that are preconditions for increased sector efficiency (e.g., governance, anticorruption, banking/enterprise reforms, and investment climate).
- ADTA management should be improved to increase the link with the lending programs and increase government participation in TA design and implementation.
- Given the need to strengthen aid coordination, policy dialogue, and project implementation at the field level, the role of ADB's Lao Resident Mission should be strengthened with increased delegation of authority and redeployment of staff.
- Executive Summary
- Development Context and the Government's Strategic Priorities
- Assessment of Quality at Entry of Country Strategies: Relevance and Positioning
- Assessment of Quality at Entry of Country Programs: Positioning
- Results Achievement: Bottom-up Assessment of Effectiveness
- Program Implementation: Assessment of Efficiency
- Program Attribution: Assessment of Other Aspects
- Overall Performance Assessment and Rating
- Management Response
- DEC Chair's Summary