Chairperson's Summary: Committee on Development …

            Chairperson's Summary:
         Committee on Development
               Effectiveness (CODE)
Background



I
     n September 2007, CODE considered the Sector Strategy Implementation
     Update (SSIU): Third Review. Part II of the report presented the imple-
     mentation progress of four Bank sector strategies, including the 2001 En-
vironment Strategy. Environmental and social sustainability has been one of IFC's
strategic pillars since 2000. In April 2006, IFC updated its approach with the launch
of its Policy and Performance Standards on Social and Environmental Sustain-
ability. MIGA adopted its own Policy and Performance Standards on Social and
Environmental Sustainability, modeled on the IFC policies, effective October 2007.

IEG Evaluation                                      lessons from operational experience across the
The evaluation assessed the effectiveness of        WBG. Management expressed concerns over the
World Bank Group (WBG) support for environ-         evaluation methodology employed by IEG, the
mental sustainability--in both the public and       gaps in evaluated areas, and the resulting use of
private sectors--from 1990 to 2007. It identified   findings to draw broad conclusions. The metrics
constraints within the WBG, including insuffi-      and evaluation scope were considered inconsis-
cient attention to longer-term sustainable          tent across the institutions and, as a result, some
development. IEG recommended the following:         findings, conclusions, and recommendations
(1) Increase the attention to environmental         were not drawn from the entire set of environ-
sustainability in the WBG; (2) Move to a more       mental sustainability­related activities across the
cross-sectoral and spatially oriented approach      WBG. Therefore, on several aspects, manage-
and strengthen staff skills; (3) Improve the Bank   ment differed, sometimes markedly, with IEG's
Group's ability to assess its support for the       findings and recommendations.
environment; and (4) Improve coordination and
consistency among the Bank, IFC, and MIGA and       General Conclusions
between the WBG and external partners.              CODE welcomed the opportunity to deliberate
                                                    on a topic of immense strategic importance for
Draft Management Response                           the WBG. It thanked IEG for a comprehensive,
Management concurred with several aspects of        informative, and detailed paper that provided
IEG's main findings, and noted that many of         some comfort, especially regarding the increase
them reinforce important messages already           in attention accorded to environmental sustain-
captured in the Bank's Environment Strategy and     ability in all three institutions and improvements
recent update, or in the findings from Bank         in performance over the 15-year evaluation
economic and sector work (ESW), internal            period. The IEG review also identified a number
reviews and self-evaluation, and emerging           of areas where the performance could be
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                    improved and crucial constraints to be                 through financial intermediaries; and integration
                    addressed, particularly those related to govern-       of IEG's review on global programs. A speaker felt
                    ment commitment and weak institutional                 that the differences between the views of IEG and
                    capacity. The committee also appreciated               management should have been addressed up
                    management's substantive response, which               front, before initiating the evaluation. IEG noted
                    detailed areas of broad agreement with the             that the methodologies applied to examine each
                    findings and recommendations, as well as several       member of the WBG are known and well
                    points where its perspectives diverge from those       accepted, and that the available data reflect
                    of IEG. The lack of adequate coverage in the           reasonably the current and historical situations
                    evaluation of IFC's strategic pillar on sustainabil-   prevailing in each institution. Management
                    ity and the limitations of the attempt to synthe-      replied that a more in-depth discussion on
                    size Bank Group­level findings elicited some           evaluation methodology may be undertaken
                    sympathy from speakers. Yet, the committee was         when IEG presents the Approach Paper of future
                    gratified to note that management was commit-          evaluations, and it suggested that perhaps there
                    ted to following up on all aspects covered in the      should be a CODE discussion of Approach Papers
                    evaluation. The rich discussion covered a wide         for WBG evaluations.
                    range of topics and issues, including its strategic
                    alignment and those related to translating             A member underlined the difficulties in drawing
                    objectives into effective development impact,          general conclusions that apply to the entire WBG,
                    and issues related to organization and staffing.       given the different approaches and businesses of
                                                                           IFC/MIGA and the Bank. Another member felt
                    Next Steps                                             that since the evaluation was not intended to
                    The Strategic Framework on Climate Change and          make comparisons given the different group of
                    Development will be considered by CODE in              clients and environmental standards, an artificial
                    early August. The new WBG Environment Sector           comparability between methodologies should
                    Strategy will be prepared in fiscal 2010, with a       not be imposed. This member found that the
                    concept note by spring 2009. Findings from             weakness was in drawing conclusions from the
                    various relevant IEG reviews over the next 12          generalization of individual case studies, and the
                    months would be among the inputs for the new           differences between evaluation and a general
                    strategy. There was also a request for IEG to          policy-advocacy role. In this vein, she added that
                    prepare a synthesis paper based on this report         any conclusion should be drawn from findings of
                    and related forthcoming evaluations that CODE          these cases, and some policy advocacy may not
                    felt would better serve as a basis for discussion      be directly relevant to the cases.
                    than this evaluation.
                                                                           New Environment Strategy. Speakers felt that
                    The following main issues were raised at the           management should take into account some of
                    meeting:                                               IEG's key findings in preparing the new strategy,
                                                                           including cross-sectoral integration (such as
                    Evaluation Methodology and Scope of the Review.        climate change, water management, energy, and
                    Several speakers raised questions about IEG's          transport) across the Regions. Some speakers
                    evaluation methodology and the scope of the            raised questions and comments about timing
                    review, and a few noted that the evaluation could      and articulation between the preparation of the
                    have been more focused or presented as a series        Strategic Framework on Climate Change and
                    of evaluations. Several speakers observed that the     Development, and the new environment
                    evaluation could have usefully included a more         strategy; alignment with the WBG strategy; high
                    forward-looking approach; an analysis of aid           expectations about the WBG's role in environ-
                    architecture; more country-specific lessons from       mental management; and use of knowledge of
                    Country Assistance Evaluations; more preemi-           the scientific community. It was highlighted that
                    nence to IFC's strategic pillar on sustainability,     environment is an integral part of the economic
                    including efforts to promote energy efficiencies       growth and development agenda. In this regard,
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                   C H A I R P E R S O N ' S S U M M A R Y: C O M M I T T E E O N D E V E L O P M E N T E F E C T I V E N E S S ( C O D E )




the need to consider updates of other                       Policy Lending, strengthening countries' institu-
environment-related strategies, such as forestry            tional capacity, and the Bank's leadership in setting
or urban development, and due diligence and                 and promoting environmental best practices.
safeguard mechanisms was mentioned.                         Further clarification was sought on IEG's analysis
                                                            of the Bank's role in assisting clients to anticipate
Some members noted that the formulation of the              and mitigate the effects of natural disasters (floods
new strategy should involve extensive consulta-             or droughts, for example).
tions with external stakeholders--governments,
the private sector, and development partners.               WBG Coordination. Speakers underscored the need
Given IEG findings that the WBG impact and                  to improve collaboration within the WBG to
efforts varied over time and across themes and              strengthen the effectiveness of its assistance at the
countries, it was suggested that the new strategy           country, regional, and global levels. They em-
should put more emphasis on operational                     phasized that organizational structure, staffing and
changes and business modalities, establish                  incentives, and internal constraints should be
internal control mechanisms, and include indica-            considered in addressing the lack of an integrated
tors to monitor its effective implementation.               WBG approach. One member felt that important
Questions were raised about the Bank's role in              emerging lessons from across the WBG's support
relation to other players in the international arena        to the public and private sectors should be incorpo-
and the existence of two sets of social and                 rated to achieve greater environmental sustainabil-
environmental standards in the WBG.                         ity. One speaker stressed the importance of having
                                                            more joint Bank-IFC-MIGA CASs.
Country Focus. Members agreed with IEG's
recommendation on the need for a fully                      Global Public Goods. Some members felt that
integrated WBG approach to environmental                    global issues cannot be addressed purely at the
issues in country programs. In this regard, the             national level. In this vein, the question was
WBG should strengthen dialogue with its clients             whether the Bank Group is the most appropriate
to mainstream environmental sustainability in               institution to address this matter, given that
Country Assistance Strategies (CASs) and focus on           other development partners, such as the UN,
the regional context, like the case of the European         should play the leading role.
Union. One member sought further clarification
on implementation of this recommendation. She               Monitoring. Speakers agreed with IEG's
stressed the importance of the Bank's advisory              recommendation on the need to improve
role in encouraging the consideration of environ-           monitoring of impact of WBG's interventions,
mental programs in CASs and of avoiding                     shifting from an input to an output indicators
additional conditionalities to clients. Several             approach and setting clear benchmarks to
speakers remarked that the WBG approach                     measure progress in areas such as climate change
should be demand-driven and based on the                    and development. One speaker raised the related
countries' ownership and institutional capacity. In         question of how to balance the impact of
addition, the WBG's role in raising awareness on            emissions compared to the overall developmen-
the importance of environmental sustainability in           tal benefits of a project. He cautioned against
client countries was highlighted.                           embracing a certain methodology for measuring
                                                            carbon footprints. One member, however, felt
Following the proposed Chairperson's Issues                 that carbon footprint measurement was not the
Note, some members commented on the need for                key to address environmental sustainability,
a dynamic, flexible, and differentiated approach to         because it was not a question of lack of
meet the needs of different categories of clients--         awareness, but of limited alternative viable ways
low/middle-income countries or fragile states. The          of modern human life and production.
various challenges of addressing the environmen-
tal agenda were noted, including those related to
policy support lending, particularly Development                                            Jiayi Zou, Chairperson
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