Institutional Issues

4.5.3 Institutional Issues

171. Human Resources for CDD. From the review of the World Bank experience, it is evident that social development specialists have been behind the successful mainstreaming of CDD into its operations. In ADB, project staff claim that as the already limited social development resources are prioritized for project preparation, there have been almost no social inputs in review missions. Four of the five project officers who managed the three cases documented in this study had strong social background and/or community exposure. This is one primary reason that these three projects can be considered to be performing relatively better than most other CDD projects. By nature, CDD projects require close monitoring and readjustments, and capacity of resident missions is crucial. As of now, there are only a few social development national officers and international staff in ADB’s resident missions.

172. Attention to Implementation. All three cases needed to adjust project design during implementation according to specific country and local context. This underscores one of the key lessons learned from other MDB experience that the implementation phase is key to successful CDD operations. ADB’s resource allocation has in general been concentrated in project preparation instead of implementation. In addition, there is no institutionalized mechanism for ADB project officers to systematically monitor and report on qualitative progress in projects, as evident from the aide-mémoire and back-to-office reports reviewed. Most documents related to loan implementation are not even readily available to the public, a reflection of ADB’s weak emphasis on implementation. In addition, as OED’s Special Evaluation Study points out, 107 there is a general lack of enthusiasm by the executing agencies in carrying out, let alone monitoring, “soft” components, such as training and capacity building, which are crucial components of CDD. Unless ADB’s emphasis on loan implementation support is strengthened, such attitudes of executing agencies may persist and remain a major hurdle for CDD.

173. Flexible Lending Instruments. Both the World Bank and IDB experiences point to the importance of the multiphase lending instruments (e.g., APL in the World Bank and multiphase loans in IDB) and/or pilot lending instruments (e.g., LIL in the World Bank) to accommodate the evolutionary and process-oriented nature of CDD projects. In ADB, no such lending instruments have been available, at least for the review period, 2001–2005. According to the staff feedback, grants (i.e., JFPR and TAs) have been normally utilized in ADB for introducing new elements and approaches to future project designs or to provide complementary support to loans. At this stage there has been no assessment made on the success rates of scaling-up grant components into loan designs. However, it is highly likely that the marginalization of CDD-related components as small grant activities in a large-scale loan project may continue until they are supported through loans. With the establishment of the Innovation and Efficiency Initiatives Unit under RSDD, it may be timely for ADB to consider something similar to LIL and APL.

174. Need to Develop Knowledge Base. As mentioned earlier, this review is the first experience in comprehensively documenting ADB’s experience of CDD, including a portfolio database for 2001–2005. Case studies show that the knowledge and experience primarily draw upon committed individual staff rather than those of the institution as a whole. In the case of the Poor Farmers Project in Indonesia, the project officer by chance had exposures to the World Bank-supported KDP project. But this is an exception rather than the norm. If ADB is to consider scaling-up CDD operations, development of an institutional knowledge base in RSDD which facilitates inter-regional knowledge exchange is crucial. Such knowledge base should also establish links with that of other MDBs like the World Bank. As the experience of this review suggests, the World Bank’s systematized knowledge base on CDD, including database, research, and publications, presents tremendous opportunities for ADB. ADB can shorten the

ADB OED (2004), p. 26 í27.

learning curve and minimize its investment risks by drawing from the extensive documentation of World Bank experience in CDD. It can also harness local expertise in client countries that has already been developed by the World Bank.

175. Alignment of Institutional Incentives. The key contrast between ADB and the other two MDBs reviewed is that the latter place CDD or community/citizen empowerment as one of their key poverty reduction strategies, while ADB does not, at least not so far. From the various levels of analysis conducted in this review, it seems safe to conclude that CDD in ADB, while growing, is still a marginal concern. The Medium-Term Strategy II 2006–2008 emphasizes inclusive development as one of the five strategic priorities, which offers a great opportunity for CDD. However, a lack of explicit reference to social accountability, civic engagement, or empowerment of the poor in the document raises a concern over the possible future space for CDD or CDD-type approaches in ADB. In addition, as OED’s Special Evaluation Study rightly points out, ADB project officers’ incentives are quite often aligned with the number of loans approved rather than the interest of the public. 108 For ADB as an institution to provide appropriate incentives to staff, more home-grown experience of CDD and awareness among management and senior staff may be essential.

108

ADB OED (2004), p. 33, para 132.