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The Matrix System at Work - Independent Evaluation Group - World ...

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APPENDIX C<br />

RESPONSIVENESS AND EFFECTIVENESS OF THE BANK’S COUNTRY PROGRAMS<br />

conditions was moder<strong>at</strong>ely s<strong>at</strong>isfactory or better. R<strong>at</strong>ings for flexibility improved<br />

over the period, with 73 percent r<strong>at</strong>ed moder<strong>at</strong>ely s<strong>at</strong>isfactory in the second half of<br />

the period, compared to 60 percent in the first half.<br />

23. In Morocco (FY06-08), the Bank responded rapidly to changes in government<br />

commitment, priorities, or capacity, scaling up lending and AAA accordingly. In El<br />

Salvador (FY05-09), the Bank used a CAS Progress Report to recast its program in<br />

response to political gridlock in the first half of the period, scaling back the lending<br />

program and associ<strong>at</strong>ed objectives. <strong>The</strong> program was still able to make an impact<br />

through AAA, project prepar<strong>at</strong>ion, and the use of altern<strong>at</strong>ive funding sources.<br />

24. Other programs responded well to changes in country conditions, including in<br />

Sri Lanka (FY03-07) where the Poverty Reduction Str<strong>at</strong>egy Paper (PRSP) was<br />

discarded when the new government pursued military oper<strong>at</strong>ions and the country<br />

was besieged by the 2004 tsunami. A CAS Progress Report narrowed the scope of<br />

objectives in the existing pillars and added a new pillar focused on tsunami<br />

reconstruction.<br />

25. <strong>The</strong> 29 programs th<strong>at</strong> were r<strong>at</strong>ed moder<strong>at</strong>ely uns<strong>at</strong>isfactory or worse for<br />

flexibility fall into three c<strong>at</strong>egories. First, in about half of uns<strong>at</strong>isfactory programs an<br />

important change in conditions occurred, but the program was not adjusted in any<br />

significant way. This happened in Argentina (FY06-09) where the CAS anticip<strong>at</strong>ed a<br />

Progress Report <strong>at</strong> the program’s midpoint, but none was prepared even in the face<br />

of the global financial crisis. In addition to major str<strong>at</strong>egic adjustments to the lending<br />

program, the Progress Report would have provided an opportunity to rethink the<br />

size and composition of the AAA program. Similarly in Benin (FY04-06), the Bank<br />

did not revise its program in response to deterior<strong>at</strong>ing external events. Moreover,<br />

while risks to the program were well identified in advance, the mitig<strong>at</strong>ion measures<br />

focused on long-term policies such as diversifying the economy and strengthening<br />

incentives. In the event, an infusion of quick-disbursing assistance would have been<br />

necessary to appropri<strong>at</strong>ely cope with multiple shocks.<br />

26. In other programs where flexibility was r<strong>at</strong>ed moder<strong>at</strong>ely uns<strong>at</strong>isfactory or<br />

worse, a response to changing conditions came either with significant delay, or was<br />

too minor to have a meaningful impact. For example in <strong>The</strong> Gambia (FY03-07), it<br />

emerged quickly th<strong>at</strong> the government lacked the necessary commitment to<br />

implement the program. In response, the Bank dropped most of the high case<br />

projects from the pipeline, but replaced them with several others. It also introduced<br />

portfolio monitoring improvements, but these actions were far from timely. And in<br />

Romania (FY06-09), the Bank was slow to recognize and act upon the need to<br />

overhaul its str<strong>at</strong>egy when the government felt little need for a Bank program after<br />

European Union accession, despite a plan <strong>at</strong> the outset to carry out a full review in<br />

th<strong>at</strong> scenario.<br />

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