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IDB releases its 2010 Development Effectiveness Report

Report evaluates Bank’s efforts in measuring its development impact in Latin America and the Caribbean

The Inter-American Development Bank (IDB) has made strides to boost transparency, accountability and enhance the development impact of its investments in Latin America and the Caribbean, according to the new edition of the IDB’s 2010 Development Effectiveness Overview.

However, the report cautions that relevant knowledge gaps still remain on certain development interventions, in areas such as gender policy, regional public goods and fiscal reforms, and calls for the Bank to invest on specific methodologies and impact analyses to measure the direct social and economic benefits that these projects have generated in the region.

Image removed.The report summarizes the actions taken by the Bank in 2010 to measure and improve the social, economic and environmental impact of the IDB’s work throughout the region. It reports on the development impact of several ongoing IDB projects in the region, in areas such as agriculture, education and on the Bank’s work in Haiti, offering a unique opportunity to share important lessons learned with policymakers and the public in general.

“Since the adoption of the Bank’s Development Effectiveness Framework in 2008, we are committed to make a sustained effort to show that every development project we finance has the impact we expect it to have, and that all the transactions associated to the implementation of the project are held to the highest standards of transparency and accountability”, said IDB President Luis Alberto Moreno.

“Our shareholders as well as the people of Latin America and the Caribbean would expect no less. We have made clear advances but this is still the beginning of a process. We are proud to share what we are learning and we hope the conclusions of this report will help the Bank and policymakers in the region identify the projects and policies that work best to help accelerate the economic and social development of the region.”

The report looks into the way the Bank designs projects, how the Bank evaluates their impact and how aligned the Bank’s investments are with the most urgent development needs of borrowing member countries. It shows that the percentage of sovereign guaranteed operations that at entry have information to measure and provide evidence on their results increased to 96 percent in 2010 from 75 percent in 2009. Currently, more than half of the projects use cost-benefit analysis in project design.

The report recognized the IDB’s efforts to measure and document the direct development impact generated by its projects in recent years but noted that more still needs to be done. Over the past three years, the Bank has more than tripled the percentage of projects that include an evaluation component in order to directly measure their impact on development to 27 percent in 2010 from 8 percent in 2007.

 Lessons learned: highlights

The report looks into what the Bank is doing to evaluate the development impact of five institutional priorities that were agreed by IDB governors last year under the terms of the ninth general capital increase: social policy for equity and productivity; infrastructure for competitiveness and social welfare; institutions for growth and social welfare; competitive regional and global international integration; and protect the environment, respond to climate change, promote renewable energy and ensure food security.

The evaluations sought to improve the information available about the impact of policies and programs with a longstanding tradition of support in the region and projects where the IDB’s involvement is more recent and knowledge about the effectiveness of such interventions is limited. Highlights include:

  • Under social policy for equity and productivity, for example, the report analyzes the impact of an IDB-backed project to improve math and science learning in Argentina. The analysis provides valuable information on pedagogical approaches and curriculum materials that work when teachers have content and pedagogical gaps, and students come from socioeconomically disadvantaged backgrounds.
  • In infrastructure, the report analyzed the benefits generated by the second phase of a program to improve living conditions in slums in Rio de Janeiro through better water and sanitation and improved housing. It shows that the program, known as Favela-Bairro, is enhancing access to services, increasing the value of dwellings, and improving school attendance, particularly in preschool. It notes that there is still little evidence the program is helping increase employment, participation in social and recreational activities, or improving other types of behaviors.
  • In the field of institutions for growth and social welfare, the report discusses programs to increase savings among Latin immigrants in the United States. It shows that fostering greater competition in the money-transmission industry or providing Latin American immigrants information on the lowest-cost remittance services can help reduce transaction costs and allow migrants to send more money home. It also shows that providing assistance to financial institutions to develop financial products that offer migrants more control over remittance uses can increase savings.
  • Under competitiveness and regional integration, the report looks into the long-term effects of funds that support technology transfers for companies. The Bank carried out a study on the effects of a matching grant program managed by Colombia. The study shows that the program helped improve products developed by firms, make them more efficient and gain market share.
  • The report also provides details on evaluations the IDB is starting to conduct on environmental projects, including programs to transfer agriculture technology to improve farm productivity in the Dominican Republic, sustainable tourism projects and conservation programs among others.
  • As the largest multilateral donor in Haiti, the IDB has been playing a leading role in the country’s recovery from last year’s earthquake. The report analyzes the Bank’s response in Haiti and shows that our programs helped build more than 800 temporary classrooms allowing 70,000 children go back to school last year and connect more than 12,000 households to potable water and sanitation.
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