Chapter 1

Monitoring Results for Greater Development Effectiveness

In 2010, the Board of Governors of the Inter-American Development Bank (IDB) approved the Bank’s Ninth General Capital Increase (IDB-9) to strengthen the Bank’s financial capacity to support economic and social development in Latin America and the Caribbean. Together with this increase in financial resources, the Bank laid out the strategy to realize its vision for the years to come. To do so, the Bank identified the Region’s most pressing development challenges and the areas where the IDB could best leverage its comparative advantages to maximize the effectiveness of the interventions it supports. This vision, along with the challenges, and objectives were articulated in what became the IDB-9 Institutional Strategy, with the Corporate Results Framework (CRF) 2012-2015 as the instrument to measure the IDB’s progress on its implementation.

With IDB-9, the Bank adopted a series of measures to become more responsive, efficient, transparent and accountable, that is, to become not just “a bigger Bank” but also “a better Bank”. The introduction of the CRF was a key element of these reforms, allowing the Bank to begin reporting on the contribution of specific outputs to selected regional goals. This made IDB-9 different from previous capital increases, where monitoring and reporting focused solely on lending volumes for specific mandates, such as poverty reduction and social equity, and lending to the poorest countries in the Region.

The CRF can be thought of as the keystone for managing for results at the IDB, with the different tools of the Development Effectiveness architecture (discussed in Chapter 4) underpinning it. With the year 2015 marking the end of the CRF 2012–2015 reporting period, it presents a timely opportunity to reflect on the results achieved through IDB-supported interventions and reflect on what went well and what did not. Although this comprehensive, four-year recap of Bank results makes the 2015 Development Effectiveness Overview (DEO) different from the editions of previous years, it retains its essence as a means for examining not only the successes, but also the failures encountered by the IDB along the way, including in constructing meaningful indicators with robust targets and baselines used to measure IDB performance (see Box 1.1).

Learning from what did not work in the past can help an organization continuously improve. For the IDB, this learning from failures helps refine products, services, and internal processes. It is a constructive process that entails thinking open-mindedly and flexibly, and innovating to craft solutions to the Region’s complex development challenges. Ultimately, this learning helps the Bank improve what it does and how it does it to become a more effective and efficient development partner for its member countries.

Following this thinking, the IDB began a tradition in the 2013 DEO to candidly reflect upon failure. Given the scope of the 2015 DEO, however, the word “failure” takes on a much more specific meaning:

To what extent did the Bank meet its CRF targets for 2012–2015?

  1. To what extent did the Bank meet its CRF targets for 2012–2015?
  2. How well did the Bank do in the design of this results measurement tool?
  3. What lessons did the Bank learn from evaluating completed projects? And how are the lessons learned during 2012–2015 informing the Bank’s work program for the next four-year period?

To examine the Bank’s results over the 2012–2015 period, it is useful to review the priorities identified in the IDB-9 Institutional Strategy, which defined part of the structure of the Corporate Results Framework 2012–2015.

By the time the need for IDB’s Ninth General Capital Increase became evident, the Region had experienced more than a decade of significant economic and social progress. Poverty rates had fallen, democracy had been consolidated, and income distribution had improved in several countries. All these factors contributed to making significant – albeit incomplete – progress toward meeting the Millennium Development Goals. While the 2008 global financial crisis was one of the largest systemic shocks to ever hit the Region, the majority of its economies were better able to weather it relative to other regions and to sustain spending on much-needed social protection measures, in part due to the Bank’s previous work on bank supervisory securities, fiscal and monetary policy frameworks and other similar areas.

Even in the face of these significant improvements, however, the Region still needed support to address a number of long-term structural problems such as a highly unequal income distribution; a substantial productivity gap compared to other emerging regions; uneven economic integration into the world economy; and social exclusion disproportionally affecting certain segments of the population, such as women and historically excluded populations including indigenous groups and people of Afro-decent.

Based on these challenges, the IDB’s Institutional Strategy defined five sector priorities to guide the Bank’s efforts: (1) social policy for equity and productivity; (2) infrastructure for competitiveness and social welfare; (3) institutions for growth and social welfare; (4) competitive regional and global international integration; and (5) protecting the environment, responding to climate change, promoting renewable energy, and enhancing food security. Additional guidance in the form of 20 Sector Framework Documents was produced over 2013–15 that draw on the Bank’s experience and provide a clear sense of what the Bank needs to accomplish in a given sector. The CRF 2012-2015 comprised four levels of indicators:

  • Table A: Regional Development Goal Indicators. These track the Region’s progress in addressing long-term development challenges for each of the five priority areas. These indicators represent measures of development reflecting a multitude of factors beyond IDB-supported interventions. As such, they are included for contextual purposes only.
  • Table B: Output Contributions to Regional Development Goals. These indicators identify and monitor the Bank’s direct contribution (products and/or services resulting from project activities) toward the Regional Development Goals.
  • Table C: Lending Program Indicators. These track the Bank’s financial support for four areas: (1) supporting development in small and vulnerable countries; (2) reducing poverty and enhancing equity; (3) dealing with climate change, sustainable energy (including renewable energy), and environmental sustainability; and (4) increasing regional cooperation and integration.
  • Table D: Operational Effectiveness and Efficiency. These indicators capture dimensions related to the Bank’s performance in terms of the effectiveness of its interventions, its efficiency, and its management of human resources, particularly with regard to gender equality and technical presence in the field.

In the discussion that follows, this structure will set the stage for a synthesis of the Bank’s results over 2012–2015.

Chapter 2 presents an overview of the results achieved within each of the five sector priorities and a selection of IDB thematic platforms addressing emerging challenges in the Region.

Chapter 3 reports on the results of recently completed evaluations of IDB-supported projects and shows how in practice, impacts have been achieved (or not) and what lessons have been extracted in the process.

Chapter 4 reflects on the Bank’s responsiveness to clients, in terms of both meeting the demand for IDB lending and responding to requests from IDB’s stakeholders. These considerations cover “how” the IDB does its work: that is, the level of effectiveness of its operations and the efficiency with which the Bank operates, among other relevant aspects.

Chapter 5 closes the discussion of the progress achieved in the CRF 2012–2015 cycle with an eye toward the next four year-period. It also describes the process whereby the Bank prepared its Update to the Institutional Strategy 2016–2019 (UIS), as well as the lessons learned from the use of this first CRF.

One of the commitments within the UIS is to improve coordination between private and public sector operations through the Renewed Vision for the Private Sector. Given the consolidation of the IDB’s private sector activities into the Inter-American Investment Corporation (IIC) as of January 1, 2016, the UIS applies to the entire IDB Group (IDBG): that is, the Inter-American Development Bank (IDB), the IIC, and the Multilateral Investment Fund (MIF) (Box 1.2).1

As this DEO represents the final reporting on the CRF 2012–2015, it refers to the IDB only -as it existed until the end of 2015 (including activities of IDB’s Structured and Corporate Finance Department and Opportunities for the Majority). It is anticipated that future DEOs will report on the entire IDB Group.