An Independent Review of World Bank Support to ... - DAG Ethiopia

3.7 The program of lending operations in the 2003 CAS directly related to capacitybuilding is comprehensive and includes in the selected sectors for this study: (i) acapacity building program for the private sector with direct links to the road sectorthrough development of the domestic construction industry; (ii) a program for postprimaryeducation; and (iii) the Public Sector Capacity Building Program PSCAP,covering four essential functions of governance and public sector management, includingpublic financial management. Capacity building interventions are similarly foreseen forrural development, safety nets, risk prevention and mitigation as well as civil society.Direct links to the PRSC (budget support) are also demonstrated in the CAS for allsectors.3.8 Three particular developments distinguish this CAS from previous ones: (i)improving governance has become a specific theme for Bank assistance, supported by allBank instruments; (ii) capacity building projects have become one of four distinct Bankinstruments accounting for 20 percent of program resources; and (iii) the contributions ofthe WBI have been integrated into the CAS in order to demonstrate the complementarynature of WBI activities to the lending program. Yet, while the 2003 CAS includes anextensive listing of strategic objectives agreed with the government, the objectives arestated in general terms and may be difficult to measure.Lending and Grants for Capacity Building3.9 The World Bank has committed a total of $3.1 billion to Ethiopia since FY1993,currently the fifth largest IDA borrower in the world and the largest in Africa. Some $1.1billion of investment lending has been committed in the four sectors examined in thisreview, of which $173 million (16 percent) was allocated to capacity building activities.In addition, the Bank provided some $641 million in adjustment/budget support of which$254 million (43 percent) has been for support of capacity building measures. Thesecapacity building commitments are presented in more detail in Table 4.5 below and theaccompanying footnote 19 describes how the estimates were made.3.10 The aggregate capacity building estimates covers large sector differences. On theone hand, capacity building components in the roads and health sectors are in the order of2-3 percent of sector investments. The same level would apply in the education sector, ifthe support for expanding and strengthening general training institutions were excluded.On the other hand, virtually all investments in public sector management (and hereunderpublic expenditure management) can be seen as having capacity building objectives,whether provided as investment loan/grant, adjustment loan/grant or analytical work. Thecosts of capacity building components in other sectors are about 10 percent oflending/grants, significantly higher than in the roads, education and health sectors.3.11 The Bank’s support in the roads, education and health sectors has followedsimilar patterns. There were projects approved in the late 1980s, which continuedoperating into the mid (roads) to late (health and education) 1990s. A Road RehabilitationProgram was approved in 1992 at which time a pilot project for community participationin provision of social sector infrastructure was also initiated. From 1997, the Banksupport to all three sectors has taken the form of general contributions to a multi-donor11