Detailed Information on the
International Development Association Assessment

Working with Congress to secure funding for the US contribution of $1.235 billion per year from 2009 to 2011 to institute the reforms agreed to during the IDA15 replenishment. In FY2008, Congress appropriated U.S. contributions of $942.3.0 million for the last payment to IDA14 in order to institute reforms agreed to for the IDA14 replenishment. For FY2006 - FY2008 Congress did not fully fund the President's request, appropriating $909.150 million, $940.5 million, and $942.3 million respectively. Presently, U.S. arrears to IDA as of end-FY2008 total $387 million. For FY2009, the President's budget request includes $1.235 billion for payment of the U.S. first three-year pledge to IDA15 and $42 million to pay a part of U.S. arrears to IDA.

Monitoring the institution's effectiveness, including the implementation of measures to better track its progress in meeting development objectives across-the-board. Due to U.S. efforts, the development of the IDA14 Results Measurement System (RMS) was a major achievement in the broader effort to improve IDA's effectiveness and track the impact of its resources. By most institutional measures, the quality of IDA's programs and achieved development impact, has improved over the past several years, while the U.S. continues to push for further progress and was successful in the IDA15 replenishment negotiations in achieving further improvements. Over the duration of IDA15, IDA will work to improve the quality of data for outcome and output indicators through efforts to build country statistical capacity and development of a standardized list of select indicators across four to five sectors in order to produce more accurate indicative aggregation of sector-specific outputs. In addition, IDA will also develop a better measure of private sector development as well as an indicator to measure the quality of public financial management in IDA countries. The RMS data is updated by replenishment, and was recently updated in November 2007.

Working with the World Bank and other donors to improve developing countries' ability to handle their debt, including increasing the amount of grants provided to the most debt-vulnerable countries. The World Bank, working in collaboration with the IMF, recently developed a robust framework for annual monitoring of debt levels and debt sustainability for grant as well as debt relief recipients. This debt sustainability framework is being used to determine the grant level of IDA individual country allocations with 100% grant financing for the poorest and most debt distressed countries. IDA is also working to increase the technical assistance it provides for debt capacity management.

Monitoring the institution's effectiveness, including the implementation of measures to better track its progress in meeting development objectives across-the-board. Due to U.S. efforts, the development of the IDA14 Results Measurement System (RMS) was a major development in the broader effort to improve IDA's effectiveness and track the impact of its resources. By most institutional measures, the quality of IDA's programs and achieved development impact, has improved over the past several years, while the U.S. continues to push for further progress. The IDA14 RMS data is updated by replenishment, a three-year cycle, and the next update will be in October, 2007.

Measure: Universal primary education (Ensure that by 2015 children everywhere will be able to complete a full course of primary schooling)

Explanation:

Measure: Reduction in the mortality rate for children age 5 and under.

Explanation:

Measure: Reduction in number of days required for business start-up Indicator of progress in private sector development

Explanation:

Is the program purpose clear?

Explanation: Article I of the Articles of Agreement of IDA clearly and accurately states the purpose of the institution. "The purposes of the Association are to promote economic development, increase productivity and thus raise standards of living in the less-developed areas of the world included within the Association's membership, in particular by providing finance to meet their important developmental requirements on terms which are more flexible and bear less heavily on the balance of payments than those of conventional loans, thereby furthering the developmental objectives of the International Bank for Reconstruction and Development (hereinafter called "the Bank") and supplementing its activities."

Evidence: www.worldbank.org/ida/idaart02.htm

Does the program address a specific interest, problem or need?

Explanation: IDA serves to mobilize the resources of the major donor countries to provide financing on both concessional and grant terms for the development needs of the poorest countries.

Evidence: Over one billion people in the world live on less than $1 per day; over 3 billion live on less than $2 per day.

Is the program designed to have a significant impact in addressing the interest, problem or need?

Explanation: IDA provides a large fraction of total aid flows and is the main source of financing for some developing countries (particularly in sub-Saharan Africa) and for some sectors.

Evidence: For the last several years, IDA has accounted for approximately 15% of total annual aid flows to the world's poorest countries.

Is the program designed to make a unique contribution in addressing the interest, problem or need (i.e., not needlessly redundant of any other Federal, state, local or private efforts)?

Explanation: IDA has regional counterparts that have very similar programs. However, IDA has undertaken recent Memoranda of Understanding with these other Multilateral Development Banks and has increased coordination with other donors.

Evidence: The other regional concessional lending facilities include: the African Development Fund, the Asian Development Fund, and the Fund for Special Operations at the Inter-American Development Bank.

Is the program optimally designed to address the interest, problem or need?

Explanation: Although its financing is both long-term and zero-interest, IDA loans to the poorest countries still add to their debt burden and make it difficult for countries to stay on the path of sustainable development. A higher proportion of grants would be more effective. The recently-concluded agreement to replenish the resources of IDA (the IDA-13 agreement) increases the proportion of grants in IDA from less than 1% to 18-21%. Although the U.S. would like a higher proportion of grants, IDA is still an effective mechanism for leveraging U.S. resources with substantial development financing from other donors. The U.S. is not the only donor to IDA, and every $1 contributed by the U.S. to IDA mobilizes about $4 from other donors. In addition, IDA allocates its assistance on the basis of country performance, making its financing more effective than other programs that have weaker links between aid flows and commitment to economic reforms

Evidence: On July 17, 2001, President Bush proposed "that up to 50 percent of the funds provided by the development banks to the poorest countries be provided as grants for education, health, nutrition, water supply, sanitation and other human needs, which will be a major step forward." The Department of the Treasury will continue to encourage the other donors to adopt this benchmark in the next IDA replenishment negotiation.

Does the program have a limited number of specific, ambitious long-term performance goals that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: In September 2001, the World Bank Group (which includes IDA) adopted the eight Millennium Challenge Goals, which serve as very ambitious, long-term performance goals (involving significant progress by 2015). IDA also sets forth long-term country-specific goals in its Country Assistance Strategies (CAS).

Evidence: The Millennium Challenge goals include: (1) Eradicate extreme poverty and hunger; (2) Achieve universal primary education; (3) Promote gender equality and empower women; (4) Reduce child mortality; (5) Improve maternal health; (6) Combat HIV/AIDS, malaria, and other diseases; (7) Ensure environmental sustainability; and (8) Develop a global partnership for development. See September 19, 2001 press release, "World Bank Joins United Nations in Implementing Millennium Development Goals Guide To Development In 21st Century" at www.worldbank.org. For more information on Millennium Development Goals, see: www.developmentgoals.org.

Does the program have a limited number of annual performance goals that demonstrate progress toward achieving the long-term goals?

Explanation: Although not present prior to 2002, the IDA-13 agreement established specific periodic goals. The goals for Spring 2004 include: (1) Increase population-weighted average primary education completion rate to 69% with a substantial number of countries reaching a higher rate; (2) Increase number of countries with positive growth rates in primary education completion rates to 38 countries; (3) Increase overall coverage rate (population-weighted) of measles immunization to 60%, with a substantial number of countries reaching a higher rate; (4) Increase number of countries with 80% coverage of measles vaccination to 29 countries; (5) Reduce time required for business start-up (in number of business days) by 7% from end-2001; and (6) Reduce formal cost of business start-up (in percent of GDP per capita) by 7% from end-2001.

Evidence: These goals can be found in the IDA-13 report at: www.worldbank.org/ida/IDA13Report.pdf

Do all partners (grantees, sub-grantees, contractors, etc.) support program planning efforts by committing to the annual and/or long-term goals of the program?

Explanation: The full World Bank Board (which represents both donors and borrowers) has accepted the IDA-13 agreement (including the periodic/annual goals listed above) and the Millennium Development Goals (which reflect the long-term goals listed above).

Evidence: Full explanation and data on the recent IDA-13 agreement and the latest Development Committee (a forum of the World Bank and the International Monetary Fund) communique (April 2002) can be found on the World Bank's website at: (www.worldbank.org/ida/IDA13Report.pdf and http://wbln0018.worldbank.org/DCS/DevCom.nsf .

Does the program collaborate and coordinate effectively with related programs that share similar goals and objectives?

Explanation: There has been some progress with regard to donor coordination and harmonization of policies across multilateral development banks. However, more work is needed in this area, and the pace of progress so far has been disappointing.

Evidence: Coordination now takes place at the country level, but more progress could be made at the sectoral and other levels. Recent harmonization proposals have been weak.

Are independent and quality evaluations of sufficient scope conducted on a regular basis or as needed to fill gaps in performance information to support program improvements and evaluate effectiveness?

Explanation: The World Bank's Operations and Evaluation Department (OED) is an independent unit of the World Bank that reports directly to the Bank's Executive Board. The Board oversees OED work through the Board's Committee on Development Effectiveness (CODE). OED uses best practice standards and is internationally respected for the quality of its work. Also, the U.S.'s Government Accounting Office (GAO) conducts frequent reviews of selected aspects of IDA.

Evidence: OED evaluation measures achievement in relation to institutional policies, Bank-wide program objectives, and the goals set for each operation. OED's evaluation tools used in promoting accountability and learning include Project Reviews (about 70 a year), Country Assistance Evaluations (about 10 a year), Sector and Thematic Reviews (about 6 a year), and Process Reviews (2 or 3 a year). For further information on OED, see: www.worldbank.org/oed.

Is the program budget aligned with the program goals in such a way that the impact of funding, policy, and legislative changes on performance is readily known?

Explanation: The IDA-13 agreement establishes a new measurable results system so that the Bank can determine if IDA funding is having any measurable affect. This will allow the Bank to routinely quantify IDA's development achievements and understand the reasons for success and failure.

Evidence: Once the new measurable results system is operational, there should be concrete evidence as to whether budget alignment exists.

Has the program taken meaningful steps to address its strategic planning deficiencies?

Explanation: IDA does not yet have in place a comprehensive set of annual goals that link to all of the long term performance goals, but the IDA-13 agreement produced a new results-based management system which should function to address such deficiencies. In addition, specific periodic output (see question 2 above) and input goals were established. Implementation of the results-based management system is still ongoing.

Evidence: The IDA-13 agreement adopted solid input measures goals that will lead to measurable outputs. The input goals work to ensure that the donor countries' funds are being used as effectively and efficiently as possible. IDA's Spring 2003 goals including: (1) Initiation of a performance measurement system, including an outline of approach, baseline data, outcome indicators and progress targets; (2) A total of 30 Country Financial Accountability Assessments (CFAAs) completed, of which at least 50% for African countries; (3) A total of 24 Country Procurement Assessment Reviews (CPARs) completed, of which at least 50% for African countries; (4) A total of 29 Public Expenditure Reviews (PERs) completed, of which at least 50% for African countries; and (5) A total of 7 Investment Climate Assessments completed. See also the description of outcome goals in question II.2. These goals can be found in the IDA-13 report at: www.worldbank.org/ida/IDA13Report.pdf.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The World Bank/IDA does this on multiple levels. On the most general level, IDA is working to improve its data collection and to create common measurements to evaluate performance over time. In addition, IDA employs various diagnostics that serve to collect timely and credible performance information to help it better serve its purpose in recipient countries, including Country Financial Accountability Assessments (CFAAs), Country Procurement Assessment Reviews (CPARs), Public Expenditure Reviews (PERs), current poverty analyses that are now part of Country Assistance Strategies (CASs), and Investment Climate Assessments (ICAs). IDA also provides capacity building and technical assistance to recipient countries to enable them to conduct household data surveys.

Evidence: Guidelines to the country-level performance assessments can be found at (www.worldbank.org/cas/), ( www1.worldbank.org/publicsector/keyinstruments.htm ), (www.worldbank.org/privatesector/ic/index.htm), and (www.worldbank.org/poverty/data/). Also see the Country Policy and Institutional Assessment (CPIA) guidelines, which are updated annually (www.worldbank.org/ida/CPIA2002.pdf); CPIA data are integral to the Bank's Performance-Based Allocation (PBA) system it uses for countries.

Are Federal managers and program partners (grantees, subgrantees, contractors, etc.) held accountable for cost, schedule and performance results?

Explanation: Once every three years during the IDA replenishment negotiation process, each donor makes an assessment of IDA's effectiveness and efficiency in order to determine whether to fund IDA or not. The U.S. is encouraging other donors to tie a portion of their contributions to key outcomes.

Evidence: The U.S. will request an additional $100 million for IDA in FY 2004 if IDA meets specific benchmarks in establishing the new results measurement system, and the U.S. will request an additional $200 million for IDA in FY 2005 if IDA makes satisfactory progress in the areas of health, education, and private sector development.

Are all funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: IDA maintains a system for ensuring that its funding is provided only for activities that promote the objectives to which have been agreed by donors to the IDA replenishment.

Evidence: IDA has a system of internal controls (policies on procurement, financial management, disbursement, and financial statement audits), an internal auditor, a fraud and corruption investigative mechanism, and an independent office of program evaluation. General oversight procedures are reviewed by the Audit Committee of the Board of Directors.

Does the program have incentives and procedures (e.g., competitive sourcing/cost comparisons, IT improvements) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: IDA allocates its resources through a performance-based allocation system. It also uses loan conditionality to ensure that funds are used effectively by the recipient countries. For IDA investment projects, IDA generally requires an international or national competitive bidding process for procurement. In addition, IDA does an ex-ante procurement capacity assessment of the borrower's executing agency for investment projects, conducts project supervision, and may do ex-post procurement audits.

Evidence: "There has been considerable improvement over the last several years increasing the level of transparency of Bank operations due to the fact that all necessary information is publicly available on the internet (www.worldbank.org). Also see the Country Policy and Institutional Assessment (CPIA) guidelines, updated annually (www.worldbank.org/ida/CPIA2002.pdf); CPIA data are integral to the Bank's Performance-Based Allocation (PBA) system it uses for countries. "

Does the agency estimate and budget for the full annual costs of operating the program (including all administrative costs and allocated overhead) so that program performance changes are identified with changes in funding levels?

Explanation: The World Bank budget estimates and budgets for the full annual costs of operating its program. The IDA budget includes the full amount of expenditures to ensure the implementation of the IDA program, including overhead. The performance-based allocation system ensures that changes in country performance are reflected in changes in the country's allocation of IDA resources.

Evidence: Quarterly updates on the budget are made available to the Executive Board of Directors. In 2001, the World Bank allocated less IDA funding to Gambia and Nicaragua due to the countries' poor performance.

Does the program use strong financial management practices?

Explanation: IDA (and the rest of the World Bank Group) has its own financial statements audited by independent external auditors every year. The World Bank Group has established strong internal fiduciary controls over its own financial reporting. Financial oversight practices are reviewed by the Internal Auditor as well as by the Board of Directors' Audit Committee.

Evidence: As required in section 588 of the FY 2001 and section 578 of the FY 2002 Foreign Operations Appropriations Acts, the Secretary of the Treasury has certified that IDA is: 1) implementing procedures for conducting annual audits by qualified independent auditors for all new investment lending; 2) taking steps to establish an independent fraud and corruption investigative organization or office; 3) implementing a process to assess a recipient country's procurement and financial management capabilities including an analysis of the risks of corruption prior to initiating new investment lending; and 4) taking steps to fund and implement programs and policies to improve transparency and anti-corruption programs and procurement and financial management controls in recipient countries.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: The Board of Directors reviews management procedures for implementing the IDA financing program. IDA donors can make broad policy changes in IDA's management practices as appropriate. Examples include the recently-established results-based financing and the prior creation of an independent inspection panel (which served to strengthen the role of the Board committee). On the other hand, the U.S. has noted that IDA and the World Bank could do a better job linking budget allocations to strategic priorities of the institution.

Evidence: See III.6. above. See also IDA-13 agreement (www.worldbank.org/ida/IDA13Report.pdf). A recent example of the World Bank taking steps to address management deficiencies is the program for reform of the World Bank's trust fund program.

Does the program have oversight practices that provide sufficient knowledge of grantee activities?

Explanation: The World Bank has an internal portfolio monitoring and supervision system that tracks all ongoing projects and identifies projects at risk.

Evidence: Internal portfolio monitoring reports -- the Annual Report on Portfolio Performance (ARPP) -- are submitted to the Board every year.

Does the program collect grantee performance data on an annual basis and make it available to the public in a transparent and meaningful manner?

Explanation: The Bank employs various diagnostics that serve to collect timely and credible performance information to help IDA better serve its purpose in recipient countries.

Evidence: These diagnostic reports include Country Financial Accountability Assessments (CFAAs), Country Procurement Assessment Reviews (CPARs), Public Expenditure Reviews (PERs), current poverty analyses that are now part of Country Assistance Strategies (CASs), and Investment Climate Assessments (ICAs). In addition, the Bank releases an annual report on IDA allocations, Bank activities, and other information. In addition, all Bank loans and Operations Evaluation Department reports are posted on the Bank's web site at www.worldbank.org.

Has the program demonstrated adequate progress in achieving its long-term outcome goal(s)?

Explanation: The IDA-13 agreement went far to establish tangible outcome goals. However, because this sort of outcome-based performance measurement has been lacking in the past, it is extremely difficult to assess IDA's progress thus far on these specific goals. In addition to the goals set during IDA-13, IDA has had the objective of supporting the Millennium Development Goals, and has made some progress, as can be demonstrated in specific country program analyses. However, IDA is still developing a more accurate and comprehensive means of measuring the attainment of these objectives.

Evidence: Since the IDA-13 negotiations just concluded, there has not been enough time to measure IDA's progress. Note that it is particularly difficult methodologically to distinguish development progress/results achieved by IDA versus those attained by other Official Development Assistance programs (ODA).

Does the program (including program partners) achieve its annual performance goals?

Explanation: As far as the IDA-13 annual development goals, these were set only a few months ago.

Evidence: There has not been sufficient time to determine whether they will be met.

Does the program demonstrate improved efficiencies and cost effectiveness in achieving program goals each year?

Explanation: IDA employs a performance-based allocation system vis-??-vis country performance. This system has been a hallmark of IDA assistance for several years, and is being strengthened.

Evidence: The Country Policy and Institutional Assessment (CPIA) assesses the quality of a country's present policy and institutional framework, with the ultimate goal of identifying how conducive that framework is to fostering poverty reduction, sustainable growth and the effective use of development assistance. Also, with IDA-13, the World Bank will start tracking IDA's overall performance year-to-year in achieving a set of high-impact development measures. In 2001, the World Bank allocated less IDA funding to Gambia and Nicaragua due to the countries' poor performance.

Does the performance of this program compare favorably to other programs with similar purpose and goals?

Explanation: Although IDA has had a performance-based allocation system in place much longer than the regional development banks, no common measurements of effectiveness across multilateral and bilateral donors exist.

Evidence: No common measurements of effectiveness across multilateral and bilateral donors exist.

Do independent and quality evaluations of this program indicate that the program is effective and achieving results?

Explanation: The World Bank employs global data on poverty trends. In addition, the Bank's Operations and Evaluation Division (OED) reports directly to the Bank's Board of Executive Directors, with the goal of using their evaluations to learn from experience, to provide an objective basis for assessing the results of the Bank's work, and to provide accountability in the achievement of its objectives. It also improves Bank work by identifying and disseminating the lessons learned from experience and by framing recommendations drawn from evaluation findings. In addition, the Bank's Quality Assurance Group (QAG) (established in 1996) reviews samples of projects to evaluate the quality of new projects and supervision of ongoing projects. Results of these analyses are fed back to project staff for learning and project improvement. Topics covered in the QAG assessments include project readiness for implementation, application of safeguard policies, attention to poverty and social aspects, and risk assessment and management.

Evidence: "While not directly attributable to IDA, poverty has decreased and IDA countries have seen living standards increase over the last few decades. OED's Annual Review of Development Effectiveness (ARDE) for 2001 (www.worldbank.org/oed/arde2001) demonstrates sustained progress in portfolio performance, in addition to improvements in the sustainability of project achievements and their institutional development impact. OED also conducted a review of IDA 10-12 (www.worldbank.org/ida/oed/oeddocs). The U.S. concurred with OED in that (a) IDA had for the most part complied satisfactorily with the replenishment undertakings in key areas, including sharpening the focus on poverty reduction, improving analysis and expanding support for governance-enhancing efforts; (b) work on selectivity had not fully met expectations, nor had satisfactory progress been made in integrating gender, environment, and private sector development into IDA programs; and (c) IDA's performance in achieving broad development outcomes had been partially satisfactory, with notable improvements over the period."