Program for Results: The First 35 Operations

55 Pages Posted: 21 Sep 2016

See all articles by Alan Gelb

Alan Gelb

Center for Global Development

Anna Diofasi

Center for Global Development

Hannah Postel

Princeton University - Office of Population Research (OPR)

Date Written: July 21, 2016

Abstract

The World Bank’s new Program for Results (PforR) instrument is only the third financing instrument approved since 1944. The PforR portfolio is expanding rapidly and represents an appreciable part of “results-based” development finance. This paper analyzes the first 35 operations. They account for $8.1 billion in commitments and are leveraged into programs that total $46.7 billion. The results frameworks and monitoring processes of the operations are therefore extended across a wider canvas. The paper analyzes the relative weight of “results” and institution-building using a methodology based on the different types of Disbursement-Linked-Indicators (DLIs). It also considers how the projects manage performance risk by distributing disbursements across DLIs of different types. The projects vary greatly in these and other dimensions, suggesting that the portfolio offers a laboratory for the future although it is too early to come to conclusions on implementation. A further 22 operations are in the pipeline. Unlike most other results-based initiatives, PforR loans offer no financing additionality. Client countries can still avail themselves of traditional investment or policy loans. This raises the question of why a particular country might choose to take a PforR loan (with its attendant disbursement risk) rather than either of the traditional options. The paper considers this question and the implications for the future role of the MDBs as their clients transition from LICs to MICs and their funding becomes a smaller share of overall development finance. It suggests a monitoring role related to the effectiveness of resource management that is not too dissimilar to the role played by private creditors in corporate governance. It notes that this might appeal to certain clients, and to certain interests within client countries, more than others.

Keywords: foreign aid, international financial institutions, World Bank, results-based aid

JEL Classification: F35, F36, O19

Suggested Citation

Gelb, Alan and Diofasi, Anna and Postel, Hannah, Program for Results: The First 35 Operations (July 21, 2016). Center for Global Development Working Paper No. 430, Available at SSRN: https://ssrn.com/abstract=2840991 or http://dx.doi.org/10.2139/ssrn.2840991

Alan Gelb (Contact Author)

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

Anna Diofasi

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

Hannah Postel

Princeton University - Office of Population Research (OPR) ( email )

200 Wallace Hall
Princeton, NJ 08544
United States

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