Measuring the Performance and Achievement of Social Objectives of Development Finance Institutions

38 Pages Posted: 20 Apr 2016

See all articles by Manuela Francisco

Manuela Francisco

University of Nottingham - School of Economics

Yira Mascaro

World Bank

Juan Carlos Mendoza

World Bank

Jacob Yaron

affiliation not provided to SSRN

Date Written: February 1, 2008

Abstract

This paper develops and tests a proposed methodology that puts forward a new integrated method for evaluating the performance of development finance institutions. This methodology applies assessment criteria that take into account both the social objective that the development finance institution addresses and the subsidies it received in order to achieve such an objective. This methodology is applied to two pilot case studies - Banadesa (Honduras) and Banrural (Guatemala). The authors calculate the previously tested subsidy dependence index, which measures the degree of an institution's subsidy dependence. The paper develops and estimates a new measure - the output index - which indicates the level to which the institution fulfills the social objectives of the state. The analysis integrates the subsidy dependence index and the output index to assess the effectiveness associated with meeting the social objective. The findings suggest that the integration of the two indexes can constitute the basis of a meaningful evaluation framework for the performance of development finance institutions. This new methodology can also be a useful metric for policy makers who are seeking to decide on an optimal allocation of scarce funds for development finance institutions that pursue social goals and for management that seeks improved performance outcomes.

Keywords: Access to Finance, Debt Markets, Banks & Banking Reform, Economic Theory & Research

Suggested Citation

Francisco, Manuela and Mascaro, Yira and Mendoza, Juan Carlos and Yaron, Jacob, Measuring the Performance and Achievement of Social Objectives of Development Finance Institutions (February 1, 2008). World Bank Policy Research Working Paper Series, Vol. , pp. -, 2008. Available at SSRN: https://ssrn.com/abstract=1090723

Manuela Francisco

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
115 951 5870 (Phone)
115 951 4159 (Fax)

Yira Mascaro

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Juan Carlos Mendoza

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Jacob Yaron (Contact Author)

affiliation not provided to SSRN

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