1 Capacity Development at the World Bank Some thoughts from the Bank Task Force on CD in Africa Mark Nelson, World Bank Institute Member of World Bank.

1

Capacity Development at the World Bank

Some thoughts from the

Bank Task Force on CD in Africa

Mark Nelson, World Bank Institute

Member of World Bank Task Force on

Capacity Development in Africa

2

Why the taskforce?

Set up in response to demand by World Bank President and Executive Directors

Not a typical World Bank report: Focus on wider body of capacity development work—by the Bank, other donors and African countries

Strong push to extract lessons of good practice wherever they were found and pushing the frontiers of knowledge

Importance of building consensus on the findings, particularly in Africa

Need to reach a diverse audience: Africa and international community, and within that, the World Bank—part of a larger global effort

3

Our approach

We have learned from diverse sources:

Exhaustive literature review: 150 studies and reports 14 case studies

Desk reviews of Benin, Ethiopia, Ghana, Madagascar, Malawi, Mauritius, Mozambique, and Uganda

In-depth field studies of Botswana, Burkina, Rwanda, Tanzania, Malaysia and Sri Lanka (the last two for comparison)

Six thematic and sectoral reviews: Public financial management; public service reform; health; local governance and decentralization; Regional bodies; Rapid results approaches

World Bank review: capacity development portfolio Consultations: African institutions and intellectuals

4

1. Why capacity development and why now?

5

Capacity: Critical for growth & MDGs Africa lags other regions in growth, human

development, MDGs Evidence suggests that capacity—skills, incentives,

resources, organizational systems, and the rules of the game—matters The capacity of individuals, organizations and institutions to set

goals and achieve them The capacity to budget resources and use them for agreed

purposes The capacity to manage the complex processes and interactions

of a working economic and political system

The challenge is to unleash, nurture and retain capacity and create a political environment that encourages

participation, excellence, learning and innovation….

6

Capacity is the missing link

Over the past 15 years… Macroeconomic stability has

returned to most countries Social and structural

policies have improved Significant improvements in

governance and political environments

But capacity remains an enduring challenge

Skills: availability, utilization and retention

Organizational effectiveness Institutional framework

7

Why Capacity Now?Africans are setting the pace

PRSs, peer review and stronger country ownership offer new opportunities for capacity development

Progressive liberalization raises new demands for better governance, better services, decentralization, and regional engagement to preserve peace and security

Partners put Africa and capacity at center stage G8: New resources along with good governance UK Commission and UN Millennium Project

Africa urgently requires new capacities to govern more complex and open societies…..

8

2. Key lessons from the report

9

Capable states and engaged societies are critical to achieving results

Effective states…Deliver public goods and

servicesProvide an enabling

environment for growth and development

Ensure peace and security

Engaged societies… Participate in public

decision-making Contribute to provision

of public goods and services

Hold authorities accountable

10

Effective states and engaged societies are needed to achieve development goals

END GOAL

S

CAPACITY OUTCOMES

CAPACITY DEVELOPMENT PROCESSES

Growth, poverty reduction, peace,

empowerment

Effective state: Public goods and

services

Engaged society: Participation, accountability

Skills, professionalismPerformance, incentivesGood governance

Capable social actorsInformation / accessOpen policy / space

11

Capacity development is largely a governance challenge

Earlier technocratic approaches to CD tended to ignore link between good governance and policy environment, on one hand, and capacity development and its effective use, on the other

Capacity takes root where incentives are favorable, dwindles where incentives are perverse

Capacity development means promoting effective states that are responsive and accountable to

engaged societies….

12

Capacity development requiresdifferent paths in different contexts

Approaches will vary from country to country depending on:

Existing capacity

Political and administrative leadership

Extent of societal engagement in decision making

Countries make the choices of appropriate paths and sequencing

No ‘one size fits all’…..

State effectiveness

HighLow

Hig

hLo

w

So

cie

tal

en

ga

ge

me

nt

c

d b

a

State effectiveness

HighLow

Hig

hLo

w

So

cie

tal

en

ga

ge

me

nt

c

d b

a

HighLow

Hig

hLo

w

So

cie

tal

en

ga

ge

me

nt

c

d b

a

13

…but good practices can be learned and scaled up

Public service reform Public financial management Decentralization Improving the investment climate

14

New opportunities, mutual responsibilities

African countries Take the lead in CD and aid

management Focus on unleashing, nurturing

and retaining existing capacity along with better use of local talent and engagement of the Diaspora

Place priority on country capacity to develop capacity: local institutions

Develop robust monitoring and evaluation with a focus on results

External partners Avoid capacity-draining

practices like project implementation units and excessive use of external consultants

Deliver a higher and more predictable level of support to well designed capacity development initiatives

Adapt CD interventions to diverse country circumstances

Accept mutual accountability and independent monitoring

15

What should be expected of African countries?

Defining capacity development as core objective of homegrown strategies

Frank diagnosis, including governance constraints, and open review processes

Prioritized action with entry points and trajectories explicitly identified

Leading aid coordination and alignment of donor support

Emphasis on knowledge networks, regional bodies, and peer learning through NEPAD

16

What should be expected of international partners?

Respect and give space to African leadership Implement Paris Declaration with emphasis on CD Support new areas of capacity development Improve analysis and advice on capacity issues Make aid modalities more capacity sensitive Focus on results Be prepared to finance scaling up

17

3. Walking the talk at the World Bank

18

Walking the talk: How the Bank should update its approach (1)

1. A stronger country focus for capacity development in Country Assistance Strategies (CAS) and appropriate monitoring frameworks

2. Doing more on the demand side Opening up Bank diagnostic processes (e.g. PERs) to social actors and partners Support transparency and access to performance information (e.g. budgets) Strengthening formal institutions of accountability (e.g. audit agencies) Supporting capacity of social actors to participate

3. Doing business differently Maximum use of country systems Pooling technical assistance and redirecting TA towards capacity development Greater reliance on programmatic instruments Financing of recurrent expenditures, e.g., to allow support of pay reform

19

Walking the talk: How the Bank should update its approach (2)

4. Support “knowledge institutions” and skills Support science and technology Tertiary education

5. Fund more regional and sub-regional initiatives Capacity for delivery of regional public goods Peer learning and review initiatives Develop vertical instruments for grant funding through African intermediaries

6. Strengthen the results focus of capacity development work Further innovation in the benchmarking of capacity development Greater investment in country M&E systems More independent monitoring of performance of all partners

7. Provide strong management leadership within the Bank Focal points for coordination in capacity development Improve staff skills and incentives Strengthen knowledge management and learning

20

Capacity: What is it in Bank operations? Input side: training, technical assistance (consultants),

equipment (roughly $1 billion a year at the Bank) Workshops, seminars, study tours South-South exchanges (Shanghai) Computers, air conditioners(?), buildings(??)….

Results side: much broader range of outcomes are sought Improved policies, incentive systems Improved performance of key organizational structures Higher skills and knowledge of key personnel

Project management side: getting the job done, by-passing local bureaucracies PMUs/PIUs Improved incentives, salaries for staff of PMUsNot surprisingly, capacity development or institution building is

claimed as development objective of close to three-fourths of Bank projects.

21

But project design rarely reflects clear capacity development focus

Capacity inputs are not clearly spelled out or costed

Target of intervention is not clear Links between inputs and CD goals is not

clear Benchmarks are not established Indicators do not show intermediate steps or

even end goals PMUs and external consultants are the norm

22

A proposal: focus on organizations

Organizations are the key building blocks of country action

Individual effectiveness is defined and enhanced by high performing organizations

Organizations can be major players in changing the overall environment, incentive systems and institutions

23

What does organizational focus mean?

Targeting organizational outputs, not inputs Good diagnostics to understand the context

Can needed changes be implemented? Can operation be successful given context?

Benchmarks to define current outputs, performance level

What level of performance is being sought? Are there norms—local, international—that can be agreed?

Indicators for intermediate steps and long-term goals

24

Why we stand a better chance now

A new context: More international focus on the capacity issue, new resources

A new set of leaders and democratic change in some key countries, NEPAD and other regional efforts

The Paris Declaration: a renewed focus on capacity development with specific targets

…but this agenda requires leadership, management focus, new incentives and resources in the World Bank

25