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IDB advances in its efforts to measure results, increase development effectiveness

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New report highlights Bank’s development contribution to Latin America and the Caribbean and innovative projects under implementation in the region

The Inter-American Development Bank (IDB) has significantly improved the way it measures the development impact and tracks the performance of its projects in Latin America and the Caribbean, according to the IDB’s 2011 Development Effectiveness Overview.

The report also measures the IDB’s progress in 2011 on 27 indicators that summarize the Bank’s contributions to the region’s economic and social development. Twelve million people benefitted from anti-poverty programs financed by the IDB, more than 2.5 million students in the region benefitted from the Bank’s education projects and 2.5 million farmers won access to improved agricultural services and investments during the year, according to the report.

This third edition of the Development Effectiveness Overview examines the way the Bank designs projects, how it evaluates their impact, and how aligned the Bank’s investments are with the most urgent development needs of borrowing-member countries. The report measures the IDB’s progress on reaching the expected results agreed upon by the Bank’s governors during the Ninth General Capital Increase.

“This report shows that our sustained efforts to improve our development effectiveness are paying off,” said IDB President Luis Alberto Moreno. “We are not only becoming a more transparent and accountable institution but we also are learning important lessons on what approaches work best to resolve our region’s development challenges.”

In terms of lending, the IDB is close to achieving all the targets that were established in 2010, when the Bank’s governors approved a $71 billion capital increase. Lending to small and vulnerable countries and to support environment-friendly initiatives reached 36 percent and 33 percent of the Bank’s loans approved last year, respectively, already exceeding initial targets of 35 percent and 25 percent set for 2015.

Meanwhile, lending for poverty and inequality reduction reached 49 percent, close to the target of 50 percent for 2015. Lending for regional cooperation and integration reached 12 percent, just three percentage points below the 2015 target of 15 percent.

Doing the right things right

The IDB has continued to improve the design of its projects and the instruments and processes that are used to measure their development impact, the report said. All projects approved by the IDB in 2011 provided sufficient information to meaningfully measure and document results, meeting minimum evaluability thresholds, a key requirement in the latest capital increase agreement. Eighty-six percent of sovereign guaranteed projects, in fact, were rated as “highly evaluable” as compared to 41 percent in 2010.

The share of projects with rigorous evaluation plans reached 31 percent in 2011, one of the highest levels among all multilateral development institutions, up from only 8 percent four years ago, according to the report. Moreover, all projects included cost-benefit or cost-effectiveness analyses.

The Development Effectiveness Overview also describes a number of Bank projects, showing how they not only incorporated lessons learned from previous experiences but also introduced important innovations to help solve key development problems in member countries, including rigorous impact-evaluation methodology.

For example, last year the IDB approved a $50 million grant to rebuild Haitian schools and improve the quality of education, drawing from the experience of the rebuilding of New Orleans’ educational system after Katrina. To support the Bahamas in reforming its air transportation system, the Bank drew lessons from Canada, Australia and New Zealand, all countries with relatively small populations scattered over large geographic areas, with a small number of airlines and heavy reliance on airlines for connectivity.

Another important innovation brought to the region by the Bank is related to citizen security, one of the top problems faced by Latin America and the Caribbean. The IDB is helping Ecuador build a state-of-the-art system to improve the compilation of crime data in order to anticipate and prevent crime. Information will be displayed on a map that will allow the country to determine crime hot-spots and develop specific policies and police actions to reduce violence there. The project draws from successful experiences related to hot-spot policing in cities such as Boston and Seattle, which managed to reduce youth violence and crime.

The Bank has also advanced in its efforts to measure the outcomes of IDB development programs in borrowing-member countries, according to the report. So far 65 percent of all country strategies have been prepared under the Bank’s rigorous results-based framework, and the remaining 35 percent of the country strategies will be approved this year under the same framework, allowing the IDB to reach full implementation.