Business News, Trends, and Results from Emerging Economies
Development with Impact: Measuring the Effectiveness of Programs
With multilateral development agencies increasingly focused on deliver- tools that IFC employs is far
ing programs with meaningful impacts, development partners such as beyond what we are currently
donors are also demanding more measures of program results to assess doing within our agencies,”
how funds have been invested. The underlying goal of all such evaluations says Thomas Nowotny, Senior
is to learn from the programs and to channel important lessons back to staff consultant at the Austrian
that are designing and implementing projects. Business Service (AWS).
IFC has a network of results measurement staff in its regional facilities, Proponents for increased
other donor-funded operations, and departments engaged in advisory work. evaluation of development
It shares ideas and practice with foundations and clients such as Shorecap programs include well-known
Exchange, the Grameen Foundation, and the Ford Foundation, as well as economist and author Profes-
with donors. sor Bill Easterly, who believes
Margrethe Holm Andersen, Deputy Head of the Evaluation Department that foreign aid alone cannot
at Danida, the development arm of the Danish Ministry of Foreign Affairs, solve global poverty, but that
explains: success will come only if there
“At Danida we have a fairly extensive and comprehensive monitoring are independent evaluations of
system, and we use a rating system to assess our progress. Danish embassies programs and someone is held
responsible for development cooperation sign results measurement contracts accountable for negative evalu-
used to report on what they are doing in the various partner countries. In ations. (See page 2)
addition, independent evaluations of Danish-funded activities are regularly With donor support, IFC has been
carried out by external evaluators. Most of these evaluations are undertaken helping local farmers in South Asia
jointly with partner countries and/or with other development agencies.”
While poverty reduction is the overall aim of Danish development assis- “When we embark on a program with a partner such
tance, themes such as governance, gender, and environment are considered as IFC, we always begin with the end in mind – i.e.,
cross-cutting themes in all development work, and measurement of these what sort of results do we want to show after imple-
efforts is based on information about the outcomes of the project e.g. how mentation of the program? This calls for inclusion of
many loans are given to women, how many policies are revised, etc. evaluation designs at the very beginning of a project to
ensure that we can actually document results. This is
There is a move for donors to carry out joint evaluations with their
a critical consideration for us, because it helps improve
implementing partners, even though both parties recognize that any pro- the performance of development activities to which
gram evaluation inherently faces a trade-off between rigor and cost. Denmark has contributed. In addition, we then have to
“We are looking at ramping up our evaluation programs and value co- Andersen, Danida provide measurable feedback to the Ministry of
operation with other institutions involved in such activities. IFC’s work in Foreign Affairs about targets met.”
results measurement is very interesting in this respect. The scope of evaluation –Margrethe Holm Andersen, Danida
Table of Contents
Page 1 Measuring the effectiveness of Programs Page 4 Partnering with Foundations for private sector Page 6 ‘Shrimping’ in Aceh
Page 2 Interview with Professor William Easterly development Page 7 Improving primary education in Ghana
Page 3 Results measurement for Advisory services Page 5 Newmont Mining argues a case for Page 8 The importance of Local knowledge- a lesson
business linkages from St Helena
Please send your comments to email@example.com. For more information go to www.ifc.org.
2 OUTCOMES Business News, Trends, and Results from Emerging Economies
Five questions for William Easterly Professor of Economics at New York University
William Easterly is Professor of Economics Is the problem just the focus on aid?
at New York University joint with Africa Well, in addition to a low focus on accountability and evaluation, most
House, and Co-Director of NYU’s development agencies embark on what I call “Big Plans” to solve global
Development Research Institute. He is an poverty. For example the primary organizations that work to end world
outspoken critic of foreign-aid programs and poverty, including the World Bank, UN, and IMF as well as leading econ-
last year rekindled the debate about the effec- omists such as Jeffrey Sachs, have taken an approach which has all the aid
tiveness of development in his ironically titled donors and recipients collectively responsible for meeting 54 worldwide
book, “White Man’s Burden: How the West’s poverty alleviation goals as stated in the Millennium Development Goals.
Efforts to Aid the Rest Have Done So Much It is therefore impossible to separate out the effect of agents’ efforts from
Ill.” A regular contributor to IFC and World other factors affecting goals. One of the principal causes of the Second
Professor of Economics Bank group discussions about the role of mon- Tragedy in foreign aid today is that nobody is individually responsible for
at New York University itoring and evaluation in development, he any one result. Hence, no individual can be evaluated.
sums up the rising demand for evaluation by
noting continuing uncertainties about the effectiveness of development
efforts. Below follows a Q & A, based on a presentation he gave at an
IFC Results Measurement conference.
4 What would your recommendations be, then?
Professionals spend way too much time agonizing over how to evaluate
foreign aid and structural adjustment. But the question we should be
asking is, “Why have aid interventions where it is so difficult to tell
Why is results measurement in development institutions so important?
Well, the best way to answer that is to have a look at the current reality in
the developing nations of the world, and what one might call the “two
tragedies of the world’s poor.”
The first tragedy is that, as noted by Jeffrey Sachs, 30,000 children
die from extreme poverty every day. However, many times these deaths
whether they are working or not?” What incentives follow from objec-
tives for which you can’t hold anyone accountable if they are not met? I
say let’s stop the “Big Plans” and collective fantasies and start doing
piecemeal steps toward what works. Let’s then have independent evalua-
tion of aid for individual piecemeal interventions for which somebody
could have been avoided—for example, the 1.8 million annual deaths
from diarrhea which could be prevented with a 10-cent dose of oral rehy-
dration therapy. And finally…?
The second tragedy is that the West has already spent $2.3 trillion on First, I will note that IFC is moving in the right direction focusing on in-
foreign aid over 5 decades, and babies with diarrhea are still not getting depth and rigorous evaluations. This something there should be more of. I
the 10-cent oral rehydration therapy. will conclude by offering three lessons from my research:
The second tragedy happens because there is no evaluation and no 1) Don’t do things that can’t be evaluated.
accountability. 2) Don’t design an aid program such that there are no consequences of
a negative evaluation.
3) Don’t use the word “evaluation” when what you are describing is not
So, in your opinion what is taking the place of evaluation? an independent evaluation of a specific intervention for which some-
Well, there is an obsession with Aid and increasing it. Even as early as the body can be held accountable
sixties there were calls by governments in the West, the World Bank and
other institutions to increase foreign aid. Obsession with money spent For more on Professor Easterly, visit:
substitutes for evaluation of whether that money actually reaches the http://www.nyu.edu/fas/institute/dri/Easterly
poor, so the second tragedy continues unabated.
In my book, I go into a detailed analysis of how aid alone, over the
years, has failed to end global poverty, and the interventions such as struc-
tural adjustment programs that have been spectacular failures. The mes-
sage is clear: you cannot succeed in any program unless there is independ-
ent evaluation of the program, and someone is held accountable for neg-
3 OUTCOMES Business News, Trends, and Results from Emerging Economies
Results Measurement for Advisory Services
by Geeta Batra
Proper and systematic results The evaluation of IFC’s Alternate Dispute Resolution project,
measurement is critical to the launched in the Balkans, provided insight into the types of informa-
success of any development tion awareness campaigns and local partnerships critical to program
agency, because it is key to success, and these factors have been carefully considered in planning
improving program design the next- generation ADR projects in Karachi. Similarly for the busi-
and implementation as well ness registration program in Lima, Peru—experience gained from
as ensuring sound policy this project evaluation has been instrumental in the design of IFC’s
advice. At IFC we are striv- new registration program in Sao Paolo, as well as in the case of the
ing to employ the latest IFC-IDA Business Registration Simplification program in Nigeria.
thinking and approaches in our In all these cases, not only have the program design and implemen-
evaluation methodology, and we tation improved following evaluation and replication; the evalua-
The results measurement team constantly benchmark our activi- tions themselves have improved with experience as well.
ties against leaders in the field. Only by asking sharper questions, collecting better data, and
Every advisory project in IFC must, at a minimum, track indica- applying increasingly rigorous analysis, can IFC improve the quality
tors of outputs and outcomes and set targets as well as establish base- of its advisory services and overall development impact.
lines. Projects are currently supervised on a half-yearly basis, and
project completion reports are filed at the end.
A variety of evaluation approaches are applied depending on the Lessons Learned in Agribusiness
specific business area, the nature of the advisory work, and the coun- Indonesia Seaweed Project, BILT Farm Forestry (India),
try context. Evaluation tools currently being applied range from ran- Vinnytsyya Dairy, Ukraine
domized evaluations with large-scale data collection efforts, to sim- Findings from randomized and quasi-experimental evaluations of these
ple forecasts of expected costs and benefits based on prior experi- programs have provided valuable lessons for IFC:
ences. Increasingly, program managers are realizing the benefits of
• The intervention must clearly target the market failure and the market
opening up their programs to systematic evaluation early in the proj-
failure must be explicitly identified for the program to be successful.
ect life cycle, to get a quick handle on what works and what doesn’t. • It is often difficult and expensive to identify different specific market
In several cases, significant changes to program design and imple- failures; if you do not understand the market failure, then you cannot
mentation have been a direct result of the findings of these evalua- solve the problem.
tion efforts. IFC management also uses the findings as a basis for • It is expensive to obtain specific knowledge on the current state of
informed decisions about project replicability and scale-up, and agri-practices in a certain area, or specific advice on what kinds of
resource allocation. For example, lessons learned from specific knowledge are appropriate in different locations.
agribusiness programs such as the Indonesia Seaweed and the BILT, • There can often be a hidden logic to current behavior, such that good
India, Farm Forestry Program, and early results from the North Andre advice in one context is inappropriate for another. Techniques that excel
and Ukraine Dairy Programs, have proven to be broadly relevant in the laboratory do not necessarily work well on the ground.
• These programs are often expensive to scale up and expand.
throughout the agribusiness project line, and improved efforts are
underway to determine the point of intervention for IFC in an
agribusiness value chain. Geeta Batra is Principal Operations Officer in the Results Measurement Unit
4 OUTCOMES Business News, Trends, and Results from Emerging Economies
The Case for Doing Business Linkages
by Nick Cotts: Newmont Mining Africa Regional Yanacocha, Peru: Community development and not philanthropy
Director Environmental and Social Responsibility At the time we initiated our corporate social responsibility (CSR) activities in
Peru, during the mid-90’s, we had already evolved to participating in com-
Newmont Mining, Yanacocha, the Foundation Asociación Los Andes de munity development and not just philanthropy. What we wanted was to
Cajamarca (ALAC), and IFC have teamed up to put together a business leverage our community development programs and expand them so more
linkages program which will strengthen small businesses in the communities, people, and stakeholders were involved. We also wanted to for-
Cajamarca region of Peru. The program will support local small business- malize the processes that we had already established. This was particularly
es with training and advisory services to link them to new contract oppor- important in the context of what the country situation was when we first
tunities near Newmont’s Minera Yanacocha investment. entered Peru in the late 80’s. Peru, then, was a developing country with cer-
The rationale for Newmont getting involved in business linkages pro- tain political instability and significant socio-economic needs in general, and
grams is that they make business sense and support our global strategy to in the communities neighboring our operations in particular. On the other
become the gold company of choice. Simply put, if we couldn’t build a busi- hand, we had a fairly new company (in terms of international operations)
ness case for them, we would not spend our time on them. which was growing very quickly. We were also a relatively large company
coming into a small community—
Why business linkages? at a time when there was little
Business linkages enable us to understanding of CSR in a formal
build relationships and bridges sense.
to the communities around the The initial area of focus was
areas in which we operate. technical assistance directed at the
Without these strong relation- construction sector. We looked to
ships, which enable us to build build the skill sets within local
strong, positive connections businesses. Equally important was
between the company’s inter- helping these entrepreneurs and
ests and those of the commu- innovators, with the ideas and
nity, we would not be able to desire to work with us, to gain
Yanacocha mine workers deliver our business promise access to finance to build their
to increase shareholder value. business. However, from the very
beginning we also were aware of
In addition to creating shareholder value, such programs are consistent Mine furnace
with our company vision to create value for the communities providing the need to ensure that dependen-
a home for our operations. cy on Yanacocha was minimized. As such, we looked for ways to promote
The mining sector is an extremely capital-intensive sector. We diversification away from our business activities.
spend billions of dollars, over time, to build infrastructure and establish The lessons we learned in Peru are also being applied to our linkages
mining operations. That in itself is a huge opportunity that one can program in Ghana, Africa, where again we have a partnership with IFC.
either use or lose. For example, it makes sense to procure locally, as this
translates to lower costs, as long as we can ensure a reliable supply and About IFC Linkages Programs
quality that meets our standards. So, if we are going to procure on a IFC’s linkages programs increase value-added services to IFC clients in improv-
local basis, then building capacity and seeing how we can link the busi- ing their businesses, while increasing the development impact of IFC invest-
ness needs of the company to the abilities of the suppliers is fundamen- ments. Linkages programs are typically two- to three-year advisory programs to
tal. In addition, linkages with local businesses create a catalyst for strengthen small and medium enterprises that are linked to IFC’s investment
improved product and service excellence, technical skills, and business projects as suppliers of goods and services. The focus is either on the client’s
management techniques. This serves to enhance the competitiveness supply and value chain development or on income- and employment-generat-
and business savvy of local entrepreneurs. ing activities for local communities around the investment project.
5 OUTCOMES Business News, Trends, and Results from Emerging Economies
Partnerships for Poverty Reduction:
IFC and Not-for-Profit Foundations Join Forces
in Private Sector Development
The international development landscape has changed with the emer-
gence of new, non-traditional sources of funding for international aid.
Private foundations have grown to be significant players in this
arena, contributing billions of dollars in charitable aid each year.
There are numerous examples of high-profile donors that have made the
headlines in the recent past: for example, Warren Buffett, the billionaire
investor and Chairman of Berkshire Hathaway, pledged to double the
assets of the Gates Foundation, already the largest foundation in the
world, with a $31 billion contribution last year; and soon after, the
British businessman Richard Branson, pledged to invest billions of dol-
lars in cleaner technologies.
Foundations have a vision for social change that complements IFC’s
mission to reduce poverty in emerging markets. They are valuable partners
because of this shared vision and also because of their ability to take risks
and move quickly, as well their specialized knowledge and contacts. In
such partnerships, IFC adds value through its experience in private sector
development, extensive network, field presence, convening power, and
ability to measure development impact.
IFC has teamed up with various foundations to carry out innovative The Case Foundation has worked with IFC to install Playpumps
projects in the private sector. Some recent examples include: which provide potable water to rural regions in Africa
I Case Foundation: IFC’s advisory services were paired with Case’s
funding to contribute to the installation of Playpumps-merry-go-
round water pumps that provide clean drinking water to rural
regions of Sub-Saharan Africa.
I Kauffman Foundation: A best practices report on women’s
entrepreneurship examined initiatives that promote women busi- Did you know?
ness owners’ access to finance in the US and abroad. International grant-giving by
I Gates Foundation: Gates joined forces with IFC to fund US foundations has more
research on improving private health care delivery in Africa. than doubled since 1998?
When taking on some of the most intractable problems of the devel-
oping world, having partners who have a track record of getting things
done makes all the difference.
6 OUTCOMES Business News, Trends, and Results from Emerging Economies
Shrimp on the menu in Aceh, Indonesia
IFC’s regional Advisory Services facility in Aceh and Nias, Bigger and better Shrimp—a winning cocktail
Indonesia, is working with rural shrimp farmers to increase the IFC has introduced a new shrimp farming method called the Polyculture
yield and quality of their harvests. Decades of conflict and the 2004 System—a cultivation method in which seaweed is introduced and grown
Tsunami have badly affected the industry and so now efforts are under- in shrimp ponds. Cultivating seaweed and shrimp together not only pro-
way to rebuild the sector. The shrimping industry is an important one vides a new income source for farmers, but also improves the quality of
in Aceh and is worth over $60 million a year and employs nearly shrimp. Another key component of the shrimp program is the improve-
100,000 people. ment of management practices, as international markets demand
IFC’s program teaches shrimp farmers global best practices and links improved standards of food quality and food safety. In addition, the devel-
them to markets. It also introduces farmers to new methods for improv- opment of effective private-sector market linkages and the strengthening
ing quality and reducing disease in the shrimp. of farmer groups are essential
The program is starting with the growing cycle in March 2007, focus- to provide market access.
ing on management training and shrimp pond preparation. Continuous During a visit to the pilot
monitoring of the program and statistical analysis will also be used to illus- sites in Aceh Besar and Pidie,
trate the effectiveness of these practices. It is expected that the program some farmers collected small
will reach 25-40 hectares of ponds this year. quantities of seaweed samples
to be planted in their villages
Working in the ‘field’ in Gandapura.
Six field facilitators for the fisheries program are currently working with “My fellow farmers and I
shrimp farmers in the Bireuen district of Aceh. The facilitators transfer Checking shrimp quality are willing to learn more on
global best practices to farmers in pilot villages targeted for cluster man- seaweed culture; this is a new
agement of the shrimp sector. Participating villages were selected through idea that has captured our interest,” said Abdullah Syamaun, a farmer who
surveys conducted in 34 villages in Banda Aceh, Aceh Besar, Pidie, and participated in the site visits.
Bireuen to assess which areas are most suitable for the aquaculture inter-
vention program. Analysis was of hygiene, farm design, crop history,
water source, green belt, and community response. Did you know?
A female shrimp weighing 150 grams
caught in deep ocean waters can hatch
over 1 million eggs in one spawning. Even
though only 50% of these will successful-
ly hatch into larvae, it’s still enough to
stock about 50 hectares of shrimp ponds in the traditional Aceh tambaks,
or 75 football fields.
Within four months, each larva can grow up to 30-40 grams in size, which
equals 10-15 tons of shrimp. This means a single shrimp can hatch enough
eggs to serve dinner for 50,000 people!
Dave Lawrence is the Program Co-ordinator at IFC’s PEP Aceh.
Project team: Graeme Harris, Program Coordinator, Arief Muhammed
Darmono, Business Development Analyst, and Renaldi Safriansyah,
Shrimp Pond at Tambak, Bireun They are supported by six field facilitators working in villages in Bireuen.
7 OUTCOMES Business News, Trends, and Results from Emerging Economies
Providing a head start to more Ghanaian children
through better primary education
Ghana’s school system has been struggling to meet the nation’s demand for
The Ghana Private Schools Support Program
quality education. Most state schools are under-resourced and do not meet
IFC is providing advisory services, as well as financing, through a risk-sharing
the required teaching standards, and consequently private schools are facility with a local partner bank. IFC’s advisory services help the schools
beginning to emerge as possible alternatives, even for the poor. In fact, improve their ability to operate as effective, sustainable businesses, thereby
today almost 20 percent of children in primary school are enrolled in private improving their risk profile. More specifically, support is provided in school
institutions. diagnostics, strategic and business planning.
But even with their perceived ability to attract more resources and offer So far, IFC has helped 17 schools develop business plans, which has resulted
better education, private schools face their own set of challenges. For example, in the partner bank disbursing US$1,724,000 to 11 schools. The program’s suc-
many schools do not have adequate business management systems, and a huge cess has been recognized by the financial sector—three other banks have
number have problems accessing medium-term finance for their growth and asked to join the GPSSP, which won the IFC 2006 Corporate Award for innova-
operational needs tion and development impact.
Some lessons Learned from the GPSSP program:
Lesson 1: Advisory services must begin before the investment
agreement is signed.
The schools need to be prepped to identify their weaknesses as a business.
This ensures that they are actually ready to receive and utilize funding
Lesson 2: Misconceptions can create challenges in fundraising.
The program has been hampered by the deep-seated perception among tra-
ditional bilateral donors that private education is elitist. Until we can prove
the pro-poor impact of the program beyond doubt, fundraising will be
focused on non-traditional donors such as foundations.
Lesson 3: Careful school selection is critical.
The target schools were screened carefully by a team composed of IFC staff
and the client bank to ensure that they passed a minimum set of criteria for
“Like other parents, I want to give my children the best education lending.
possible to prepare them well for the future. Even though public Lesson 4: Fostering competition among banks improves the impact of
education is free, private schools offer far better education, the program.
and they are affordable.” –Ghanaian father Working with a single bank was necessary during the pilot phase, but for a
full-scale initiative, the program should be expanded to more banks for com-
With this in mind, IFC’s Health and Education department, together with
petitive loan pricing and to offer the schools a choice in banking partner.
the Advisory Services facility, IFC PEP-Africa, are implementing a program
called the Ghana Private Schools Support Program (GPSSP), which works to This article is a summary of a winning “Smart Lesson” submitted by Tanya
help private schools operate more effectively. Through the program, schools Scobie, Health and Education Sector Operations Officer of IFC and PEP Africa
receive advisory services to help increase their chances of being approved for firstname.lastname@example.org, and Sam Akyianu, Operations Officer, GPSSP, PEP Africa/Accra
financing for projects such as classroom expansion and improvement, and the email@example.com
construction of libraries and other facilities. The program also helps schools
attract and retain high-quality staff. About Smart Lessons: Smart Lessons in Advisory Services program is a
first of its kind in the World Bank Group. It fosters peer-to-peer dialogue
spanning all IFC business lines and sectors through the submission of easily
accessible, four-page notes on lessons in advisory services.
8 OUTCOMES Business News, Trends, and Results from Emerging Economies
A lesson from St. Helena
by Laurence Carter
St. Helena is a 39- square mile British dependent territory located in the So what can we learn from this?
middle of the South Atlantic, with fewer than 5,000 inhabitants. St. Lesson: If local people have not been exploiting a particular resource,
Helena has dependencies of its own—one of which is Tristan da Cunha. there may be a good reason. The development aid program came in with
Tristan is relatively rich thanks to a lucrative lobster industry. So, why not St. good intentions but achieved the reverse. Read Jared Diamond’s “Collapse”
Helena too? Well, there was a St. Helena lobster development project, about for more drastic examples of how societies have destroyed the environments
20 years ago. Courtesy of a in which they lived.
British government develop-
ment aid project, a boat was
sent out with equipment and a Laurence Carter is Director of the IFC Small and Medium Enterprise Department.
trainer to teach the local fisher- Prior to joining the IFC, Laurence worked for 10 years in Botswana, Swaziland, Malawi
and St. Helena. He is a regular contributor to the World Bank PSD blog.
men, who for many many years
had not disturbed the marine Why St. Helena? Because it is one of the most aid-dependent economies in the
life, how to catch lobster. world. Because there have been many attempts to develop the island’s private sector
Within a few months the and the aid business has not always been good at learning from experience. If we look
“industry” had blossomed but closely, we are humbled by history. Above all, because St. Helena is a wonderful place.
just as quickly it died- the lob- Tapping into the seam of stories about St. Helena gives one a feeling similar to that
sters had been fished out. There which the geologist who discovered Botswana’s first diamond mine in 1967 must have
has been no lobster fishing had—excitement at finding little gems which can bring a lot of pleasure to people.
industry since, although the For more about St. Helena go to: http://www.sthelenatourism.com
odd lobster is caught occasion-
ally. Today, St. Helena’s local
waters are relatively barren and
cannot support concentrated
fishing of particular species.
IFC’s advisory services (AS) have expanded rapidly in scope, geographic coverage
and staffing. Currently, nearly one third of the Corporation’s staff is engaged in full-
time delivery of advisory services, with the vast majority based in IFC’s regional
facilities. This work is increasingly seen as a core IFC business line, enabling us to
achieve our mission in ways and places that might not be possible through invest-
ment products alone.
IFC has 12 facilities covering sub-Saharan Africa, Middle east and North Africa
(MENA), Asia and the Pacific, Southeast Europe and Central Asia (SECA) and Latin
America and the Caribbean (LAC).
Outcomes Outcomes is a quarterly newsletter published by the Small and Medium Enterprises department of
International Finance Corporation the International Finance Corporation (IFC). The IFC is the private sector arm of the World Bank
2121 Pennsylvania Ave., N.W. group, set up with a mission to promote sustainable private sector investment in developing and
Washington, D.C. 20433 USA transition countries, helping to reduce poverty and improve people’s lives.