Review of the Independence and Effectiveness of the Operations Evaluation Department

In February 2008, ADB committed to undertake a comprehensive review of its Operations Evaluation Department (OED). The purpose of the review was to examine ADB's current arrangements for the operations evaluation function to assess its independence and overall effectiveness.

Originally known as the Post-Evaluation Office, OED was established in 1978. Over the years, the department has undergone several organizational changes, culminating in the establishment of an independent department on 1 January 2004, reporting to the Board of Directors through the Development Effectiveness Committee (DEC). OED's current functions, priorities, and procedures are embodied in the provisions of the 2003 Board paper on enhancing OED's independence and effectiveness, as amended in 2008, and the associated Operations Manual (OM) section on operations evaluation.

This paper presents key findings from this review process and proposes a number of changes to further enhance OED's independence and effectiveness. The review concludes that ADB has a clearly articulated model of independent evaluation that emphasizes organizational and behavioral independence, protection from external influence, and the avoidance of conflicts of interest. However, OED's credibility as an independent evaluation unit could be further enhanced by the following measures: (i) the non-renewable term of director general, OED to be expanded from 3 to 5 years; (ii) director general, OED to be appointed by the Board, upon recommendation of the DEC in consultation with the President; (iii) the selection process for director general, OED to be led by the DEC and strengthened through the use of an executive search firm and extensive media advertising; (iv) director general, OED to be exempted from the formal performance review process with his/her salary determined by a formula; (v) OED's budget to be approved by the Board separately from ADB's overall administrative budget; and (vi) OED to be renamed the Independent Evaluation Department to reflect its enhanced independent status.