Private sector has taken a much larger role in development interventions that ever before. This presentation outlines the Monitoring and Evaluation systems used by the International Finance Corporation and the Multilateral Guarantees Agency (MIGA) as well as how the Independent Evaluation Group assesses the effectiveness of these systems. Main messages of this presentation are:
- Private Sector operations have specific data gathering advantage/disadvantage based on their business model
- M&E systems should adopt to the business practices to be effective and efficient
- M&E can influence learning, quality of work and outcome
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Monitoring and Evaluation of Private Sector Development
1. Monitoring and Evaluation of
Private Sector Development
Hiroyuki Hatashima
Private Sector Evaluation,
Independent Evaluation Group (IEG)
World Bank Group
Canadian Evaluation Society Conference
June 11, 2013
2. IEG is part of a larger array of
evaluation and control mechanisms
2
World Bank Group
President / Management
Management’s Internal
Accountability Framework
And Systems
•Self Evaluation
•Monitoring (QAG, DOTS, AS)
•Institutional Integrity
•Internal Audit
•Compliance Advisor/ Ombudsman (IFC,
MIGA)
Independent
Evaluation
Group
Inspection
Panel
Board of
Executive Directors
3. IEG seeks to address both
accountability and learning
• Accountability for results:
– Is the Bank Group doing what it says?
– Is it achieving its objectives?
– To what extent is it contributing to development outcomes?
– With what results and development impact?
• Learning:
– What projects and programs achieve results – relevance,
efficacy, and efficiency – and why?
– How can M&E be strengthened in the Bank Group and in
client countries?
3
4. Three main messages
Evaluation Across Boundaries
• Private Sector operations have specific data
gathering advantage/disadvantage based on
their business model
• M&E systems should adopt to the business
practices to be effective and efficient
• M&E can influence learning, quality of work
and outcome
5. Outline of Presentation
1. Context of Private Sector Development Assistance
2. Types of World Bank Group Private Sector
Development interventions
3. Technical Assistance projects M&E
4. Private Sector Investment projects M&E
5. Use and Influence of M&E
6. 1.1 Context: Private Sector As Important Player
1. The private sector has taken on an essential
role in contributing a wide range of
development issues.
2. Potential of private sector to contribute to
development solution is still underutilized.
3. M&E essential for track progress, assess
outcome & performance and generating
knowledge of what works, what does not, and
why.
7. Are the monitoring and evaluation systems of IFC
and MIGA equipped to inform the organizations on
their performance and results?
Systems functions
• To what extent
does the
mechanism in
place ensure
that M&E
systems
generate
credible, timely,
and relevant
information?
Use and Influence
• To what extent
does M&E
information
support
evidence-based
decision making
and learning?
Effectiveness and
Efficiency
• What has been
the impact of
the M&E
outputs and use
on project
quality and
development
outcomes?
1.2 Assessing M&E systems –
Evaluation Questions
8. Outline of Presentation
1. Context of Private Sector Development Assistance
2. Types of World Bank Group Private Sector
Development interventions
3. Technical Assistance projects M&E
4. Private sector Investment projects M&E
5. Use and Influence of M&E
9. The World Bank Group consists of
five closely related institutions:
• IBRD: The International Bank for
Reconstruction and Development
• IDA: The International Development
Association
• IFC: International Finance Corporation
• MIGA: The Multilateral Investment
Guarantee Agency
• ICSID: The International Center for the
Settlement of Investment Disputes
10. 1. Types of WBG Private Sector Development
interventions
1. Interventions through the Public Sector to influence
the Private Sector
World Band Financial and Private Sector Development
projects,
IFC’s Advisory Services projects to government (Investment
Climate, PPP)
2. Direct interventions in partnership with the private
sector and public entities operating commercially
IFC’s investments and MIGA’s guarantees
3. Blend interventions
IFC’s Advisory Services to private companies, but with a
strong public good component
11. Outline of Presentation
1. Context of Private Sector Development Assistance
2. Types of World Bank Group Private Sector
Development interventions
3. Technical Assistance projects M&E
4. Private Sector Investment projects M&E
5. Business Models and M&E
12. 3.1. Technical Assistances follow
logical model results measurement
ImpactOutcomesOutputsActivitiesInputs
Resources used
for advisory
services projects
Programs
associated with an
advisory project
Example:
– Provide
advisory
services to
local
companies
Immediate
deliverables of
the project
Example:
– Diagnostic
report and
recommendati
ons made
– 10 managers
were trained
– Legislation
drafted
Changes in
knowledge,
behaviors, and
attitudes as a
result of
intervention with
attribution of
changes to the
project
Example:
– Legislative or
inst reforms
– Changes in
agricultural
techniques, or
CG practices
Consequences
resulting from an
intervention
including
improvements in
clients’
performance and
effects beyond
direct
beneficiaries
Example:
– increased
investment,
sales, jobs
14. Development Effectiveness Framework
Strategic
Relevance
Was it the right
project at the
right time?
Output
Achievement
Were “key”
deliverables
achieved? To
what extent were
clients satisfied
with the advisory
service?
Outcome
Achievement
Were intended
short & medium-
term changes in
behavior
achieved?
Efficiency
Were costs
reasonable vis-à-
vis results?
Impact
Achievement
Were intended longer-
term effects achieved?
What would have
happened without the
intervention? (What is
the counterfactual?)
• These combine into a “synthesis” rating
In addition: Assessment of IFC Role & Contribution:
– Was IFC particularly catalytic or innovative in its advisory services?
– Was IFC able to play a unique role not easily filled by others?
3.2. Advisory Services Project
Completion Report as Self-Evaluation
15. 3.4 Technical Assistance M&E –
ways to adopt to business practices
Progress
Integration with project cycle
M&E officer playing important and
formal roles in quality assurance
Quality control cycle
established
M&E officers sign-off, Development
Impact Dept reviews
M&E quality improved
Quality of logical framework, baseline
data, quality of results discussion – all
improved
Challenges
Standard indicators not
sufficient to track results
Inadequate information in
PCR to justify
outcome/impact ratings
Post completion follow-up
system not systematic
Work quality assessment not
covered in PCR
16. Outline of Presentation
1. Context of Private Sector Development Assistance
2. Types of World Bank Group Private Sector
Development interventions
3. IFC Advisory Services (Technical Assistance)
projects M&E
4. Private Sector investment projects M&E
5. Use and Influence of M&E
17. 4.1. Characteristics of Private Sector investments
supported by IFC and MIGA
Operations subject to market test
Direct Beneficiaries pay for service
Some degree of competition
Sponsors motivated by profitability
Third party effects (TPE) with no market feedback
Economic distortions
Positive and negative externalities
Provide rationale for public intervention
Development Agency’s involvement
Consistent with market principles
Focused on third party effects (TPE)
19. 4.3. Performance dimensions of IFC
investments and MIGA guarantees
Objective Stakeholders Criteria Standards Assessment
Development
Outcome
Financiers Business
success
(Market test)
Market
benchmarks for
ROIC
Actual financial
statements and
objectives at approval
Customers,
suppliers,
employees,
government
Economic
sustainability
(Third party
effect)
Social benchmarks
for ERR
Actual financial
statements, adjusted
by economic prices
and values
Neighbors,
environment
Environment and
social effects
(Third party
effects)
WBG performance
standards
Actual impact and
compliance with
performance
standards
Competitors, new
entrants, producers
of complementary
products
Private sector
development
(Third party
effect)
Objectives on
competition,
ownership
structure,
demonstration
effects
Qualitative
assessment of
achievements of
objectives on
competition,
ownership structure,
demonstration effects
20. Track indicators and
development outcomes
Supervise
DOTS*
*IFC’s Development Outcome Tracking System
Approve Disburse Repaid / Exit
Commit
Identify indicators
Expanded
Supervision
Report (XPSR)
4.4. M&E to adopt investment
project cycle
21. 21
Development Outcome Framework
Financial
Performance
Financiers
Economic
Performance
Gov’t, taxpayers
employees, custome
rs,
suppliers
Envi. & Social
Performance
Neighbors &
Environment
Private Sector
Development
Demo. effects,
linkages, corp. gov,
investment climate
& new entrants
+
Standard Development Reach Indicators
IFC-wide: Taxes, employment (incl. female)
Plus sector-specific: e.g. MSME loans, utility connections
• Development Outcome: Overall effect on country’s development
• Framework: Derived from Good Practice Standards for Private Sector
Evaluation (investments)
• Each with specific indicators, benchmarks
3.2. Performance Assessment
22. 2.2 Investment project M&E
Challenges
•Difficult to gather info beyond
company”
•Gaps in tracking private sector
development outcome
– Missing indicators, discrepancies
between stated outcome and
indicators
•Reliance on client-submitted
data
– Some data based largely on
assumptions
•Financial Institutions –
challenges in getting sub-
project level information
Advantages
•Financial data- good quality
and frequently updated;
•Enforcement via contracts /
covenants
•Integration with project cycle
– Use of standard indicators, with
baseline and target
•Quality control cycle
established
–Dept. review, Development Impact
Dept review, External Assurance for
Annual Report
23. Political Risk Guarantee Business model
and M&E challenges (MIGA)
Business Model
•Core competency as
guarantee underwriting,
not financing
•Arms-length relationship
to project enterprises;
•No statutory reporting
requirement from projects;
•Constraints to access –
–No membership on project
company boards of directors
Challenges
In data gathering
In communicating with
project entities
Challenges in
contextual analysis
Industry / sector
intelligence
23
24. Function of M&E in MIGA:
significant progress in intro of self-evaluation and
indicators.
Achievements
•New monitoring system
for Environment & Social
•Mainstreaming self-
evaluation
•Development indicator
tracking system
introduced
Areas of improvement
Challenges in data gathering
Inconsistent E&S follow-up on
missing documents
DEIS –ex-ante data not
covering all indicators.
Pool of evaluation not
adequate to report portfolio
results
24
25. Outline of Presentation
1. Context of Private Sector Development Assistance
2. Types of WBG Private Sector Development
interventions
3. Technical Assistance projects M&E
4. Private Sector Investment projects M&E
5. Use and influence of M&E
26. 3.1 Lessons can have a positive influence on
results
IFC Investment
•Lack of lessons / application of
lessons at appraisal associated
with poor outcome
– 80% of unsuccessful projects – low
quality at entry was main factor
– Low DO with low quality at entry =
40% of them without lessons
60% of them lessons were not
integrated in design.
•Improved performance by
learning from past failures
(Agribusiness case study)
– Newer successful projects applied
lessons from earlier failed projects
IFC Advisory
Lessons influence design and
implementation
New template asks “how
lessons have been applied to
project design”
Wealth of lessons from PCR
Segmented categories of lessons
High use of past project PCR in
new projects
Low use of “SmartLessons”
M&E officers review at entry
27. 3.2 Issues have been detected during
supervision and actions have been taken
IFC Investment
•High quality of supervision work:
83% high (XPSR)
•Half of XPSR identified issues
during supervision, 90% of them
were detected, 63% of them
were fully addressed during
supervision.
•Credit and Environment risk
systems as the most frequently
used monitoring systems
IFC Advisory
PSR widely used
95% of staff used PSR to
make adjustment.
88% of supervision issues
identified in PCR captured in
PSR.
Poor supervision critical factor
of 25% of projects rated low in
DE
28. 3.3 M&E information is increasingly
used in IFC Strategies
• Increasing use of M&E data
• Annual Strategy process
– Development impact Dept. provide data and
participate discussion.
– Guidance: asks development issues to cover
• Ratings and reach data used in strategy formulation
– Historical DOTS rating comparisons between
sectors – prioritization of subsector
– DOTS ratings vs. profitability
– Gap analysis using “reach indicators” – strategy to
sharpen focus, areas to reach (i.e. BOP)
– Development return of different options using reach
data (reach per $ cost of capital)
29. Three main messages
• Private Sector operations have specific data
gathering advantage/disadvantage based on
their business model
• M&E systems should adopt to the business
practices to be effective and efficient
• M&E can influence learning, quality of work
and outcome
30. Outstanding issues
• Difficult to estimate benefit of M&E
–Need innovative approach, some
assumptions about counterfactuals;
31. Monitoring and Evaluation of
Private Sector Development
Hiroyuki Hatashima
Private Sector Evaluation,
Independent Evaluation Group (IEG)
World Bank Group
Canadian Evaluation Society Conference
June 11, 2013
Notes de l'éditeur
IEG Private Sector Evaluation (IEGPE)*Evaluates the effectiveness of programs, projects, and activities and the strategies, policies and procedures that relate to them with particular attention to the achievement of objectives for private sector development Generates lessons for learningSupports the Board in ensuring WBG’s development effectiveness and accountability*Adapted from Director’s terms of reference approved by the Board (November 2005)