ENHANCING CAPACITY TO PREPARE ENHANCING CAPACITY TO PREPARE AND IMPLEMENT POVERTY AND IMPLEMENT POVERTY REDUCTION STRATEGIESREDUCTION STRATEGIES

Progress, Issues and ChallengesProgress, Issues and Challenges

International Symposium on Capacity Development Manila, Jan. 14-16, 2003

OutlineOutline1. 1. PRSPs present new challenges and opportunities in PRSPs present new challenges and opportunities in

capacity enhancementcapacity enhancement

2. Capacity for what? for whom? PRSP reviews underscore 2. Capacity for what? for whom? PRSP reviews underscore capacity needscapacity needs::

……. in the participatory process. in the participatory process……. in poverty diagnostics. in poverty diagnostics……. to effectively undertake priority public actions. to effectively undertake priority public actions……. in setting goals, and in monitoring and evaluation of . in setting goals, and in monitoring and evaluation of

outcomesoutcomes

3. Developing a balanced multi-level approach to capacity 3. Developing a balanced multi-level approach to capacity enhancementenhancement

…….at the national level.at the national level…….at the program level.at the program level

4. 4. PRSPs confirm need for donor collaboration and PRSPs confirm need for donor collaboration and alignment in support to capacity enhancementalignment in support to capacity enhancement

1. PRSPs present new 1. PRSPs present new challenges and opportunities challenges and opportunities

in capacity enhancementin capacity enhancement

The PRSP approach in a global The PRSP approach in a global contextcontext

A growing number of countries are pursuing poverty reduction A growing number of countries are pursuing poverty reduction within PRSPs, in addition to countries seeking to reduce poverty within PRSPs, in addition to countries seeking to reduce poverty outside a PRSP approachoutside a PRSP approach

Reviews of early experiences in PRSP preparation and Reviews of early experiences in PRSP preparation and implementation can inform our overall approach to the changing implementation can inform our overall approach to the changing agenda for capacity enhancement agenda for capacity enhancement

The PRSP approach reflects emerging new lines of thinking on The PRSP approach reflects emerging new lines of thinking on capacity enhancement as well as the related challenges and capacity enhancement as well as the related challenges and opportunities for countries and their development partnersopportunities for countries and their development partners

Given these new lines of thinking, capacity enhancement within Given these new lines of thinking, capacity enhancement within thematic, sector, or organizational programs raise similar issues thematic, sector, or organizational programs raise similar issues to those of PRSPsto those of PRSPs

PRSP – an increasingly widespread approach to poverty reduction

PRSPs reflect overall shifts in PRSPs reflect overall shifts in approaches to capacity approaches to capacity

enhancementenhancement Capacity enhancement is regarded as an Capacity enhancement is regarded as an

endogenous processendogenous process Broad-based country participation is Broad-based country participation is

accepted as fundamentalaccepted as fundamental Capacities at different levels are Capacities at different levels are

recognized as interdependent recognized as interdependent Greater focus on linking capacity Greater focus on linking capacity

enhancement to achieving resultsenhancement to achieving results Need to strengthen global, regional and in-Need to strengthen global, regional and in-

country partnerships, knowledge sharing country partnerships, knowledge sharing and learningand learning

PRSP reviews confirm that capacity PRSP reviews confirm that capacity enhancement is a central challenge in enhancement is a central challenge in

poverty reductionpoverty reduction““Lack of capacity, and the inability to use Lack of capacity, and the inability to use existing capacity effectively, remain important existing capacity effectively, remain important constraints to the preparation, implementation constraints to the preparation, implementation and monitoring of PRSPs in many countries.”and monitoring of PRSPs in many countries.”World Bank/IMF, Review of the PRSP Approach, March 2002

“…“…capacity building is not merely a technical capacity building is not merely a technical exercise; it is also rooted in the political exercise; it is also rooted in the political economy of the country. Thus, an economy of the country. Thus, an understanding of the sources of current understanding of the sources of current weaknesses, as well as how incentives change weaknesses, as well as how incentives change behavior, is critical to fully address the behavior, is critical to fully address the challenges the PRSP presents.”challenges the PRSP presents.” World Bank/IMF, PRSP Progress Report, September 2002  

PRSP approach presents PRSP approach presents new opportunities and challenges new opportunities and challenges

to capacity enhancementto capacity enhancement

Potential for greater results focus in capacity enhancement Potential for greater results focus in capacity enhancement with medium-term targets owned by country at the macro and with medium-term targets owned by country at the macro and program levelprogram level

Capacity enhancement efforts are moving beyond executive Capacity enhancement efforts are moving beyond executive branch of Government and beyond national levelsbranch of Government and beyond national levels

Framework within which host country could lead process of Framework within which host country could lead process of greater donor coordination and donor alignment with national greater donor coordination and donor alignment with national capacity enhancement strategycapacity enhancement strategy

Shared global and regional learning – the Bank and partners Shared global and regional learning – the Bank and partners mobilize global knowledge, the client adapts and customize mobilize global knowledge, the client adapts and customize with local knowledge, while opportunities for South-South with local knowledge, while opportunities for South-South learning expandlearning expand..

PRSPs sharpen focus on three PRSPs sharpen focus on three levels which embed national levels which embed national

capacity capacity INSTITUTIONAL ENVIRONMENTINSTITUTIONAL ENVIRONMENT: It requires ‘rules of the game’ : It requires ‘rules of the game’

which induces and permits organizations and individuals to seek which induces and permits organizations and individuals to seek and capture the rewards to development-promoting behavior.and capture the rewards to development-promoting behavior.

PEOPLEPEOPLE: Development capacity requires both formal training and : Development capacity requires both formal training and exposure to growth skills such as entrepreneurship, work exposure to growth skills such as entrepreneurship, work discipline, problem-solving, etc. discipline, problem-solving, etc.

ORGANIZATIONSORGANIZATIONS: It requires organizations with a clear sense of : It requires organizations with a clear sense of their objectives and the staffing, incentives, structures and their objectives and the staffing, incentives, structures and processes to meet them. processes to meet them.

Capacity must exist at all three levels to ensure successful Capacity must exist at all three levels to ensure successful and sustainable outcomes in PRSP implementation. and sustainable outcomes in PRSP implementation.

2. Capacity for whom? for 2. Capacity for whom? for what? what?

Findings of PRSP reviewsFindings of PRSP reviews

Capacity for whom? For Capacity for whom? For what?what?

PRSP reviews look at capacity issues for:PRSP reviews look at capacity issues for: preparation of poverty reduction strategiespreparation of poverty reduction strategies implementation of poverty reduction strategiesimplementation of poverty reduction strategies monitoring and evaluationmonitoring and evaluation

Focus is on four critical areas:Focus is on four critical areas: participatory processparticipatory process poverty diagnosticspoverty diagnostics priority public actionspriority public actions setting targets and goals and monitoring and setting targets and goals and monitoring and

evaluationevaluation

Capacity Enhancement within Capacity Enhancement within PRSP: Four Core ElementsPRSP: Four Core Elements

Participatory process

Poverty diagnosis

Monitoring & evaluation systems

Priority public actions

Core Elements of Capacity : Core Elements of Capacity : Participatory processParticipatory process

Participatory process Parliamentary oversight

Civil society organizations

Sectoral agencies

Core Elements of Capacity : Core Elements of Capacity :

Poverty diagnosisPoverty diagnosis

Poverty diagnosis

Poverty diagnostics capacity

Poverty and social impact analysis

Core elements of Capacity :Core elements of Capacity :Priority public actionsPriority public actions

Priority public actions

Capacity to prioritize and cost programs

Analysis of inter-sectoral linkages and cross-cutting issues

Capacity related to developing and implementing programs for service delivery is key in all PRSPs

Core Elements of Capacity:Core Elements of Capacity:Monitoring and evaluationMonitoring and evaluation

Monitoring & evaluation systems

Capacity to monitor poverty related spending at different levels

Demand for M & E is crucial success factor in building capacity

Supply side of PRSP monitoring requires

diverse sources of data

3. Developing a balanced multi-3. Developing a balanced multi-level approach to capacity level approach to capacity

enhancementenhancement

Balancing capacity Balancing capacity enhancement across different enhancement across different

levelslevels Inter-dependent capacities need to be enhanced:Inter-dependent capacities need to be enhanced:

at the horizontal (national) level to generate key outputs at the horizontal (national) level to generate key outputs such as national statistics, budgets, legislation, etc.such as national statistics, budgets, legislation, etc.

At the vertical (program) level to generate outcomes for At the vertical (program) level to generate outcomes for final beneficiariesfinal beneficiaries

Within each level, specific capacity issues of Within each level, specific capacity issues of institutional environment, organizations and institutional environment, organizations and individuals need to be addressedindividuals need to be addressed

No blueprint: each country will need to develop a No blueprint: each country will need to develop a unique overall capacity enhancement strategy unique overall capacity enhancement strategy based on institutional endowments, political based on institutional endowments, political traditions, geographic characteristics, etc.traditions, geographic characteristics, etc.

Capacity enhancement for what? For whom?Capacity enhancement for what? For whom?

Vertical (program) level capacity enhancement (examples)Vertical (program) level capacity enhancement (examples)

Horizontal (national) level capacity enhancement (examples)• Poverty monitoring, assessment, diagnostics• Public expenditure management• Public sector management• Statistical capacity• Monitoring & evaluation• Aid management

OUTPUTS

Pollution management

HIV/AIDS prevention

Basic education

Rural water provision etc.

Program-level Monitoring & Evaluation

Program-level Expenditure management/MTEF

Final beneficiary outcomes

Enhancing capacity at the Enhancing capacity at the national levelnational level

e.g. setting up a poverty monitoring e.g. setting up a poverty monitoring systemsystem People skills to conduct ex-ante and ex-post People skills to conduct ex-ante and ex-post

poverty assessments and diagnostics poverty assessments and diagnostics

Organization support to national and line Organization support to national and line ministry statistical offices/units to generate ministry statistical offices/units to generate and share reliable poverty dataand share reliable poverty data

Institutional environment for participatory Institutional environment for participatory

assessments, citizen feedback, etc.assessments, citizen feedback, etc.

Enhancing capacity at the Enhancing capacity at the national levelnational level

e.g. Public Sector Managemente.g. Public Sector Management

People skills through collaborative work on design of People skills through collaborative work on design of programs and implementation.programs and implementation.

Organization support through work on public sector Organization support through work on public sector management processes including procurement and management processes including procurement and financial management and budget formulation, financial management and budget formulation, execution, reporting, audit, and monitoring.execution, reporting, audit, and monitoring.

Institutional environment through focus on governance, Institutional environment through focus on governance, particularly anti-corruption programs, and on achieving particularly anti-corruption programs, and on achieving transparency and accountability.transparency and accountability.

Enhancing capacity at the Enhancing capacity at the program levelprogram level

Need to define clear, time-bound and specific program Need to define clear, time-bound and specific program objectives.objectives.

People: needs at the program level are specific; can include People: needs at the program level are specific; can include formal training, special learning events, study tours, on-the-formal training, special learning events, study tours, on-the-job learning supported by external advisers, on-line job learning supported by external advisers, on-line communities of practice, etc.communities of practice, etc.

Organization: needs at the program level can include Organization: needs at the program level can include defining objectives, designing new structures and processes defining objectives, designing new structures and processes to meet them, providing IT and specialist support. to meet them, providing IT and specialist support.

Institutional environment: need to examine the environment Institutional environment: need to examine the environment in which the program operates and identifying the areas in which the program operates and identifying the areas where people and organizations are constrained from where people and organizations are constrained from operating effectively.operating effectively.

Enhancing capacity at the Enhancing capacity at the program level to generate program level to generate

beneficial outcomesbeneficial outcomes Capacity enhancement at program level is Capacity enhancement at program level is

part of a results chain leading to tangible part of a results chain leading to tangible benefits benefits

Implementation often requires some degree Implementation often requires some degree of regionalizing/localizing PRSPs. Thus, of regionalizing/localizing PRSPs. Thus, capacities also need to be enhanced at capacities also need to be enhanced at these levels to achieve results at the locus of these levels to achieve results at the locus of problems and solutionsproblems and solutions

To achieve results, inter-To achieve results, inter-dependent capacities dependent capacities

needed at different levelsneeded at different levels E.g. PRSP monitoringE.g. PRSP monitoring

People: interaction of national and local skills to People: interaction of national and local skills to translate PRSP goals into region-specific targets for translate PRSP goals into region-specific targets for indicatorsindicators

Organizational capacities: ranging from national Organizational capacities: ranging from national statistical offices, academic institutions, interface statistical offices, academic institutions, interface points with poor (rural clinics, schools, etc), local points with poor (rural clinics, schools, etc), local authorities, etc. to track inputs and outputs and assess authorities, etc. to track inputs and outputs and assess outcomes and impact outcomes and impact

Institutional environment: effective capacities require Institutional environment: effective capacities require clarity of rights, responsibilities and priorities for clarity of rights, responsibilities and priorities for setting targets and for data gathering and analysis setting targets and for data gathering and analysis

4. PRSP assessments confirm 4. PRSP assessments confirm need for donor collaboration and need for donor collaboration and alignment in support to capacity alignment in support to capacity

enhancementenhancement

Implications of multi-level Implications of multi-level and results-oriented and results-oriented

capacity enhancementcapacity enhancement Bottom line is not just whether the PRSP is Bottom line is not just whether the PRSP is

effectively managed, but whether the programs effectively managed, but whether the programs supported through the PRSP are effective in supported through the PRSP are effective in reducing poverty and achieving the MDGs.reducing poverty and achieving the MDGs.

PRSP reviews confirm that capacity enhancement PRSP reviews confirm that capacity enhancement cannot be seen as an “add on” to a poverty cannot be seen as an “add on” to a poverty reduction strategy, but must lie within the core of reduction strategy, but must lie within the core of that strategy that strategy

National capacity enhancement strategies within a National capacity enhancement strategies within a PRSP framework could provide a basis for aligning PRSP framework could provide a basis for aligning donor capacity enhancement support in specific donor capacity enhancement support in specific sub-sectors or thematic areas.sub-sectors or thematic areas.

Key ChallengesKey Challenges For PRSP countriesFor PRSP countries

Strengthen & institutionalize the participatory processStrengthen & institutionalize the participatory process Incentivize and enable key actors in developing pro-poor growth Incentivize and enable key actors in developing pro-poor growth

strategies and effective poverty diagnosticsstrategies and effective poverty diagnostics Improve public expenditure management systemsImprove public expenditure management systems Greater emphasis on monitoring and evaluation and feedback to Greater emphasis on monitoring and evaluation and feedback to

strategiesstrategies

For development partners For development partners Make alignment real: align assistance programs with country Make alignment real: align assistance programs with country

priorities priorities Support utilization and development of national capacities, Support utilization and development of national capacities,

including for poverty and social impact analysisincluding for poverty and social impact analysis

For both PRSP countries and development partnersFor both PRSP countries and development partners Development of knowledge products, dissemination of good Development of knowledge products, dissemination of good

practices, and a “learning culture” for proper institutional, people, practices, and a “learning culture” for proper institutional, people, and organizational capacitiesand organizational capacities

Harmonization agenda can Harmonization agenda can reduce transactions costs of reduce transactions costs of

donor supportdonor support

Need for data collection and processing Need for data collection and processing which keeps accurate records of aid which keeps accurate records of aid commitments and disbursementscommitments and disbursements

Need for guidelines for management of Need for guidelines for management of donor programs.donor programs.

Need for regular communications Need for regular communications between aid coordination authorities between aid coordination authorities and donors.and donors.

At global level, several efforts underway At global level, several efforts underway to advance the harmonization agenda to advance the harmonization agenda (OECD-DAC-MDB working groups)(OECD-DAC-MDB working groups)

Aligning donor approaches to Aligning donor approaches to enhancing capacity is essentialenhancing capacity is essential

Country leadership is essential for improving Country leadership is essential for improving harmonization and donor alignmentharmonization and donor alignment

Solid diagnostics on capacity needs and transactions Solid diagnostics on capacity needs and transactions costs of current approaches can provide foundation costs of current approaches can provide foundation for more effective country/donor dialoguefor more effective country/donor dialogue

Emerging experiences with increased local Emerging experiences with increased local ownership, donor alignment and monitoring of donor ownership, donor alignment and monitoring of donor performance (e.g. Ethiopia, Vietnam, Tanzania)performance (e.g. Ethiopia, Vietnam, Tanzania)

PRSP provides a framework for achieving donor PRSP provides a framework for achieving donor alignment to national capacity enhancement alignment to national capacity enhancement strategiesstrategies