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

Executive Summary1. This study of Ethiopia is one of six country case studies undertaken as part of anindependent evaluation by the World Bank’s Operations Evaluation Department (OED)of the relevance and effectiveness of World Bank support for public sector capacitybuilding in Sub-Saharan Africa over the past ten years (1995-2004). In each case study,particular attention has been paid to the Bank’s support for capacity building in four focalareas: education, health, roads and public financial management.2. Since the regime change in 1991, Ethiopia has returned to democratically electedgovernment, registered steady economic growth and steady, in some cases substantial,improvements in several poverty indicators such as access to education, health andtransport infrastructure. These improvements have often been made from a low startingpoint. Particular gains have been noted in primary school enrolment, access to highereducation and primary health services, and size and quality of the trunk road network.Gains in the social sectors have been achieved to some extent at the expense of servicequality. Outcomes on income poverty are less clear and suggest stagnation.3. In the early 1990s, education levels were extremely low and, despite the gainsmade since then, general educational standards continue to constrain human resourceavailability in the public sector. Structural reform began in the mid-1990s and its progresshas been mixed. Fiscal discipline has been maintained. While a major decentralizationreform has been forcefully driven since the mid-1990s, privatization and public servicereform have so far shown limited results. The private sector is far from reaching itspotential role as the real engine of growth and employment. Similarly, civil societyinstitutions are developing slowly and can play only a minor role in influencinggovernance and social service delivery. Since 1999, the Government has graduallychanged its approach to capacity building. It launched a comprehensive NationalCapacity Building Program (NCBP), coordinated by a new Ministry of Capacity Building(MCB). While mainly focused on capacity building in the public sector, the NCBP alsoincludes support for capacity building in the private sector and civil societyorganizations.4. Since FY1993, the World Bank has committed a total of $3.1 billion to Ethiopia,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 about 15 percent was allocated to capacity building activities. Inaddition, the Bank provided some $254 million in capacity building support throughadjustment/budget support, which amounts to almost half of total adjustment lending (asshown in Table 4.5 below).5. Bank strategy for capacity building was not well articulated until the 2003Country Assistance Strategy (CAS), in which capacity building is considered a majordevelopment theme and the subject of a coordinated set of specific interventions beingprogrammed at $100 million per year.iii