CPAs are based on informed professional judgment of the country teams concerned. To ensure that these assessments are prepared rigorously and with due diligence, ADB has put in place a review and oversight system that is transparent and ensures consistency across the rated countries.
The performance-based allocation (PBA) focal point in the Strategy and Policy Department, outside the operational departments, manages the PBA process. This clearly separates the ADF resource allocation function and the operations for which the allocations are used.
The CPA Working Group reviews and clears individual country's CPAs and ratings. The group is chaired by the PBA focal point advisor, and consists of representatives of the regional and central knowledge departments.
The Technical Group, a subgroup of the CPA Working Group, vets the preliminary CPAs prepared by country teams, to ensure their quality and consistency across countries, and adds greater rigor and transparency to the ongoing CPA. The Technical Group is composed of technical experts in economics, social equity, and environment and governance, all of whom are outside the operational departments.
The interdepartmental CPA review panel—consisting of heads of departments and offices represented in the CPA Working Group—is responsible for finalizing the ratings, which are then endorsed by the appropriate vice presidents.
Changes in governance rating exert the greatest influence over changes in composite country performance rating. Poor governance and corruption deter investment, waste resources and distort their allocation, undermine the credibility of public authorities and increase insecurity. Moreover, the poor suffer most from the consequences of weak governance and corruption. Thus, improving governance and fighting corruption are critical to reducing poverty.
Promoting governance increases the stability of the economic environment, enhances the credibility of developing member countries' (DMC) policies, and reduces resource leakages. In deriving the overall CPA rating, and in the allocation formula, a larger weight is assigned to governance because it is critical to the successful development outcomes and to the efficient and effective use of public resources.
CPAs are ADB's own assessments. ADB country teams share the draft assessments and ratings with the respective governments and provide full opportunity for feedback, especially on the factual part of the assessments. CPAs are not subject to negotiations with the respective governments. Differing views on the assessments and ratings are recorded in an aide memoire.
ADB employs World Bank's country policy and institutional assessments (CPIA) questionnaire in its assessment of country performance, but its ratings may not necessarily be identical to the ratings given by the World Bank. Rating between the two institutions may differ because:
World Bank's CPIA questionnaire used by ADB allows for differences in professional judgment. The effect of such differences in judgment has been minimized through elaborate review and oversight arrangements.
ADB collaborates with other multilateral agencies, particularly with International Development Association (IDA) of the World Bank Group. ADB has:
In the context of harmonization and closely coordinating business processes and analytical work to support country strategies, joint assessments for post-conflict and weakly performing countries are being supported. Joint assessments in other countries may also be considered provided that these do not impair ownership of and accountability for ratings.
The integrity of the policy and of the allocation process requires that ADB carry out independent assessments to determine its own ratings. Since ADB is accountable for the use of ADF resources, full institutional ownership of country ratings, which underline the allocation of ADF resources, is crucial.