23959 L. If1 Poverty Rdcin anld the World Bank Progress in Operationalizing the WDR 2000/2001 H THE WORLD BANK FILE Copy Poverty Reduction and the World Bank Progress in Operationalizing the WDR 2000/2001 THE WORLD BANK Washington, D.C. Copyright (C 2002 The International Bank for Reconstruction and Develkpment/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing March 2002 The findings, interpretations, and conclusions expressed in this paper are entirely those of the author(s) and should not bc attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. 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Contents Acknowledgments vi Abbreviations and Acronyms vii Executive Summary 1 Introduction 9 1 Fighting Poverty: The Unfinished Struggle 11 Poverty remains deep and widespread 11 Trends in income poverty 11 Progress toward human development goals 13 Experiences vary 15 Differences between countries 15 Differences within countries: initial inequalities, geographic and social exclusion 16 2 Operationalizing the WDR 2000/2001 through Broader Understanding and Sharper Focus 19 Intellectual underpinnings 19 Lessons on aid effectiveness 19 The framework of the lWorld Development Report 2000/2001 19 The World Bank's strategic framework and country business model 21 The strategic framework and country business model 21 Implementation in low-income countries 21 Implementation in middle-income countries 23 Strengthening the poverty focus of Bank instruments 24 Country assistance strategies 24 Sector strategies 24 Operational policies and guidance to staff 25 Improving poverty analysis, monitoring, and evaluation 26 Analytical work to understand poverty and assess expected impacts of policies 26 Strengthening capacity and systems for poverty monitoring 28 Assessing whether results were achieved: evaluation capacity 29 Support for global public goods 30 iv POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000,2001 3 Orienting Bank Operations to Support Opportunity, Empowerment, and Security 33 Opportunity 33 Growth, institutions, and distribution 33 Making markets work to stimulate pro-poor growth 35 Building the human capital of the poor 36 Empowerment 37 Increasing inclusion and participation 37 Strengthening local organizational capacity 38 Enhancing accountability and enforcement 40 Increasing access to information 40 Security 40 The social risk management framework and its implementation 40 Disaster mitigation and management 42 Conflict mitigation and post-conflict reconstruction 42 4 Challenges Ahead 45 Country orientation 45 Partnerships 45 Further changes in the way we do business 46 Mainstreaming the WDR 2000/2001 46 Analytical work 47 Monitoring and evaluation 47 Annexes 49 A. Summaries of Completed Poverty Assessments, Fiscal Years 2000 and 2001 50 B. Poverty Assessments Completed, Fiscal Years 1989-2001 51 C. List of Completed Poverty Assessments, Fiscal Years 1989-2001 52 D. Program of Targeted Interventions, Fiscal Years 1992-2001 55 E. Poverty-Focused Adjustment Operations, Fiscal Years 1992-2001 59 E Poverty-Focused Emergency Recovery Operations, Fiscal Years 1992-2001 63 G. Annual Lending to Selected Sectors, Fiscal Years 1984-2001 64 H. Household Survey Availability by Region 67 I. Aligning Sector Strategies to the WDR 2000/2001 Areas of Action 72 Tables 1.1. Regional breakdown of number of people living on less than $1 and $2 per day, 1990, 1999, and 2015 12 1.2. Regional breakdown of headcount index of people living on less than $1 and $2 per day in developing countries, 1990, 1999, and 2015 13 1 3. Countries with net primary enrollment rates of less than 50 percent (percent of relevant age group) 13 1.4. Declines in life expectancy between 1990 and 1999 15 1.5. Trends in under-5 mortality, selected years, 1970-1999 15 2.1. Availability and comparability over time of poverty monitoring data 29 D-1. Program of Targeted Interventions (PTI), fiscal 1992-2001 55 D-2. Program of Targeted Interventions (PTI) by sector, fiscal 1992-2001 55 D-3A. Program of Targcted Interventions (PTI) lending by region, fiscal 2000 56 D-3B. Program of Targeted Interventions (PTI) lending by region, fiscal 2001 56 D-4. List of operations in the Program of Targeted Interventions (PTI), fiscal 2000-2001 57 CONTENTS v E-1. Poverty-focused adjustment lending, fiscal 1992-2001 59 E-2A. Poverty-focused adjustment operations lending by type, fiscal 2000 59 E-2B. Poverty-focused adjustment operations lending by type, fiscal 2001 60 E-3. Poverty-focused components of adjustment operations, fiscal 2000-2001 61 E-4. List of poverty-focused adjustment operations, fiscal 2000-2001 62 F-1. Poverty-focused ERL lending, fiscal 1992-2001 63 F-2. List of poverty-focused emergency recovery operations, fiscal 2000-2001 63 G-1. Average lending to selected sectors, fiscal 1984-2001 64 G-2. Annual lending to selected sectors, fiscal 1992-2001 65 Boxes 2.1. Diagnostic Economic and Sector Work 22 2.2. Aligning CASs with country strategies: Brazil, Ghana, Mozambique, Indonesia 24 2.3. Rethinking environmental activities through a poverty lens 25 2.4. Selected findings of poverty assessments on improving opportunity for poor people 26 2.5. Selected findings of poverty assessments on enhancing security for poor people 27 2.6. Poverty and inequality in Europe and Central Asia 27 2.7. Fighting HIV/AIDS effectively in Brazil, Chad, India 31 3.1. The WDR 2002: Institutions for Markets 35 3.2. Creating opportunities through micro-finance in Bosnia and Herzegovina 36 3.3. Operationalizing empowerment through Community Driven Development 38 3.4. Building local capacity through empowerment 39 3.5. Examples of results achieved through community participation in the 1990s 39 3.6. Reducing vulnerability through better resource management in Colombia and Turkey 42 Figures 1.1. Changes in the number of people living on less than $1 and $2 per day, 1990-1999 12 1.2. Average annual growth in per capita GDP and change in the incidence of income poverty, 1987-1998 12 1.3. Share of the population living on less than $1 and $2 per day, 1990, 1998, 2015 (projections), 2015 (target) 14 1.4. Initial income inequality and poverty reduction 16 1.5. Poor-rich inequalities in access to different types of health care 17 G-1. Trends in lending for human capital development, fiscal 1983-2001 66 Acknowledgments This edition of the annual Progress Report on Poverty with numerous managers and staff across network anchors Reduction consolidates the findings of two documents pre- and regions, as well as the Poverty Reduction Board. We are pared by World Bank staff and presented to the institution's grateful for their time and inputs. The Annexes were pre- Comrrittee of Development Effectiveness and Executive pared by Alexander Arenas with assistance from Parita Board inJune 2001: areport,Povedy'Reduction ald the Suebsaeng, Chitra Bhanu, and Nicola Pontara. The repor- World Banlk.: Progress in Fiscal 2000 and 2001, and benefited from input and comments by Peter Bocock, Colin a paper Attackinzg Poverty: Operationializiuig the W1'brld Bruce, Rui Coutinho, Shanta Devarajan, Ishac Diwan, DevelootentRepotT 2000/2001 at the 11;,rklBank. The Philippe Dongier, Judith Edstrom, Osvaldo Feinstein standard annual progress report annexes are also included. Manuela Ferro, Patrick Grasso, Cheryl Gray, Danielz The report was prepared by Jehan Arulpragasam and Gressani, Trina Haque, Norman Hicks. Christine Jones. Giovanna Prennushi under the direction of John Page, Valerie Kozel, Brian Levy, Kathy Lindert, Laszlo Lovei, Director, Poverty Reduction Group, Poverty Reduction Magda Lovei, Syed Mahmood, Sohail Malik, Tamar and Economic Management Network. Chapter 1 draws on Manuelyan Atinc, Daniel Morrow, Ambar Narayan. Deepa work b- S. Cecchini, S. Chen, D. Filmer, D. Gwatkin, Narayan, Daniel Owen, Sulekha Patel, Guillermo Perry, M. Ravallion, W. Shaw, A. Varoudakis, A. Wagstaff. Nicola Pontara, Susan Razzaz, Ana Revenga, Jo Ritzen, Chapter 2 benefited from contributions by R. Adams, Richard Scobey, Colin Scott, Radwan Shaban, Parmesh AX. Arenas, C. Bhanu, P. Bocock, J. Bucknall, S. Cecchini, Shah, Sudhir Shetty, Nicholas Stern, Eric Swanson, John K. Ezernenari, V. Kozel, J. Owens, P. Petesch, G. Rubio, Underwood, Tara Vishwanath, Michael Walton, Pem R. Seshagiri, P. Suebsaeng. Chapter 3 drew on consultations Wam, Ulrich Zachau, and Salman Zaidi. vi Abbreviations and Acronyms CAS Country Assistance Strategy OED Operations Evaluation Department (World CDD Community-Driven Development Bank unit) CDF Comprehensive Development Framework PA Poverty Assessment DAC Development Assistance Committee PER Public Expenditure Review ECA Europe and Central Asia PF Poverty-focused (adjustment loans) FY Fiscal Year (July 1-June 30) PPA Participatory Poverty Assessment GDP Gross Domestic Product PREM Poverty Reduction and Economic GEP Global Econtomic Prospects (World Bank Management (Network) report) PRGF Poverty Reduction and Growth Facility GNP Gross National Product (IMF) HIPC Highly Indebted Poor Countries (Initiative) PRSC Poverty Reduction Support Credit IBRD International Bank for Reconstruction and PRSP Poverty Reduction Strategy Paper Development PTI Program of Targeted Interventions IDA International Development Association QAG Quality Assurance Group (World Bank unit) IFI International Financial Institutions SFP Strategic Framework Paper (World Bank IMF International Monetary Fund report) I-PRSP Interim Poverty Reduction Strategy Paper SPA Strategic Partnership with Africa JSA Joint Staff Assessment UNDP United Nations Development Programme LIL Learning and Innovation Loan WBI World Bank Institute (formerly EDI) MIC Middle-Income Country WDI World Development Indicators NGO Nongovernmental Organization WDR World Development Report (World Bank OECD Organization for Economic Cooperation report) and Development WTO World Trade Organization vii Executive Summary Attacking persistent poverty in low- and middle-income in the transition economies of Europe and Central Asia, and countries is the greatest single challenge facing the global rising significantly in Sub-Saharan Africa. The numbers of development community as the world moves forward into people living on under $2 per day-a more adequate mea- the 21st century. But despite progress during the past sure of poverty in some regions, for example in Europe and decade, the battle is far from won, and progress has been Central Asia-have actually increased globally (rising from slower than had been hoped at the beginningof the 1990s. 2.7 billion to 2.8 billion) since 1990, and in all regions This report discusses how the Bank is responding to this chal- except East Asia and Latin America and the Caribbean. lenge and translating the approach of the World Devel- Economic growth is critical for reducing income poverty. opmnent Report 2000/2001 on poverty into practice.1 The Bank's Global Economic Prospects 2002 (World Bank 2002) shows that the target of halving dire income poverty Figlhting poverty: the unfinished struggle by 2015 can be met if the average per capita GDP growth rate for developing countries can be sustained at 3.6 percent a year In response to the experience of the 1990s, the interna- (twice the 1990s average of 1.8 percent). Under this sce- tional community has adopted a set of international de- nario of robust growth, the incidence of those living on $1 velopment goals for reductions in income poverty and a day could fall to 12 percent, and their absolute numbers improvements in human development indicators. These could drop to about 750 million by 2015. But even under goals were recently reaffirmed and expanded in the Mil- this scenario, many countries would still not reach the goal. lennium Declaration of the United Nations. Progress and In Sub-Saharan Africa, the incidence of poverty would be prospects towards achieving the goals are summarized below 39 percent (down from 47 percent in 1990) and the num- and in chapter 1. ber of poor would increase to 345 million compared to roughly 240 million in 1990 and 300 million in 1999. Trends in income poverty. The international devel- opment goals and many publications, including the World Progress towards humani development goals. In- Bank's World Development Report 2000/2001, Attack- come is not the only dimension by which to measure de- ing Poverty (WDR 2000/2001) have paid increasing at- privation. Poor people typically lack access to even minimally tention to non-income dimensions of poverty. Nevertheless, decent education, health care, and basic physical infra- trends in income poverty remain the most commonly used structure. The international development goals enshrined yardstick of poverty reduction over time. On this basis, the in the Millennium Declaration capture some of these other picture for the past decade has been mixed. The proportion dimensions of need, with improvements mainly targeted at of the world's population living on less than $1 per day- targets to be met by 2015 compared with the reference year a broadly accepted measure of dire poverty-fell from 28 of 1990. Thus far progress has been slow. Primary school percent in 1990 to 23 percent in 1999. But the combina- enrollments remain off track for realizing the goal of uni- tion of slow economic growth and continued population versal primary schooling by 2015. Even where countries have growth over the period has meant that there has been little succeeded in bringing more children to school, there are con- change in the total number of poor people-nearly 1.2 cerns about the qualitv of education. Overall progress to- billion still live in deep deprivation. In regional terms, num- wards gender equality in primary and secondary education bers have fallen substantially in East Asia but have risen in has also been too slow to meet the target of achieving equal- other parts of the developing world, more than doubling ity by 2005. And mortality and health indicators have not 2 POVERTY REDUCTION AND THE WORLD BANK: PROGPESS IN OPERATIONALIZING THE WDR 2000/2001 improved as hoped. Over half a million women continue of poverty reduction and the WDR 2000/2001 frame- to die each year during pregnancy or childbirth. With re- work. And the Bank's strategic directions and business spect to under-five mortality, only a substantial acceleration models, including Country Assistance Strategies, Sector of recent progress would allow any region to reach the tar- Strategies, and analytical work, have evolved to respond to geted two-thirds reduction by 2015. the challenge. These developments are described below Poor people everywhere continue to suffer from unac- and in chapter 2. ceptably low social conditions and lack of access to services. The Millennium Declaration includes a call for halving the Strengthenling inztellectuial underpinnings. W7hat can proportion of people without access to safe and affordable be done to fight poverty more effectively? How can aid sup- water. An additional 1.5 billion people would need to gain port poverty reduction? Recent research on aid effectiveness access by 2015 if this target is to be reached. Malnutrition has shown that aid works when a country's overall policy rates are systematically higher for the poor than the better- and expenditure framework is appropriate, institutions are off, and use of services ranging from immunization to treat- strong, and government and people together are strongly ment o& respiratory infections and diarrhea is lower. Lack committed to reforms developed in partnership with donors of voice and representation make it harder for the poor to and civil society. Drawing on the experience of the 1 990s, get service providers to cater to their needs. the World Developmnenlt Report 2000/2001 reviewed The AIDS crisis is having a devastating impact on devel- the nature and causes of poverty and proposed an expanded oping countries, especially in Africa. Health care systems- framework for action in three interconnected areas- weakened by the impact of AIDS, along with conflict and promoting opportunity, enhancing empowerment, and in- poor management-cannot cope with traditional illnesses. creasing security for poor people across the world. Building Malaria and tuberculosis continue to kill millions-malaria on the evidence on aid effectiveness, the WDR advocated alone is estimated to reduce GDP growth rates by 0.5 per providing assistance more selectively, focusing on coun- year on average in Sub-SaharanAfrica. Life expectancy in the tries with strong commitment to reforms and using deliv- region fell from 50 years in 1987 to 47 years in 1999; in the ery mechanisms that respect country ownership. The WDR countries hardest hit by AIDS (such as Botswana, Zimbabwe, 2000/2001 framework is changing the way the Bank and South Africa, and Lesotho) the average lifespan was cut short other development organizations do business. by more than ten years. Child mortality increased from 155 per 1,000 in 1990 to 161 per 1,000 in 1999 in Sub-Saharan Refining strategic directionis and the countr, busi- Africa, but fell in all other regions. niess model. The Bank's January 2001 Strategic Framework Overall trends, however, mask a great variety of coun- Paper (SFP) reaffirms the country business model endorsed try experiences. Those with good policies and institutions by the Development Committee at the Prague meeting in have succeeded in raising growth and reducing poverty. But September 2000. The SFP stresses the central role of poverty gains from growth can be undermined by income equality. reduction in its mission and takes the international devel- Countrv-level data also mask the special problems faced by opment goals as a frame of reference. The SFP translates the particular regions and social groups within countries-for main themes of the WVDR 2000/2001 into two prioriry areas example, women and ethnic minorities. for action: (i) building the climate for investment, jobs, and sustainable growth and (ii) investing in poor people and em- The Bank's response: operationalizing powering them to participate in development. The SFP also the WDR 2000/2001 through broader calls for selective, poverty-focused Bank action in the global understanding and sharper focus arena. The Bank's country business model permits the effec- The trerds in poverty indicators outlined above have chal- tive operationalization of the concepts emphasized in the lenged the Bank and the wider development community to W'DR 2000/2001. It is centered on the country's vision, reflect on what has worked and what has not in efforts to good diagnosis of the policies proposed, a Bank program support developing countries' poverty reduction strategies. in support of the vision and informed by the diagnosis. and Recent work on aid effectiveness and the World Devel- a focus on results. It translates into specific approaches to opme7 t Report 2000/2001 togcther provide thc intellcctual support for low- and middle-income countrics, endorsed undcrpinnings for broadening our understanding of poverty by the Development Committee. and sharpening the focus of our support. The Bank has also * Low-inicome counrltries. The support provided to low- refincd its support for global public goods in the context income countries by our concessional lending affiliate, EXECUTIVE SUMMARY 3 the International Development Association (IDA), is Improving poverty analysis. Good decisions depend now grounded in the Poverty Reduction Strategy Paper on sound analysis. The WDR 2000/2001 stresses the im- (PRSP), that articulates the country's vision. The PRSP portance of understanding country and context-specific approach is an operational expression of the principles determinants of povcrty in order to effectively act to reduce of the Comprehensive Development Framework poverty. The Bank undertakes a substantial amount of an- (CDF)-country ownership of strategies based on broad alytical work to understand poverty better, including formal participatory processes, a long-term perspective and a country Poverty Assessments and other types of analysis, and multifaceted approach to poverty reduction, a focus formulate a professional assessment of the country's poli- on partnerships with others, and concrete, monitorable cies and institutions for achieving the vision. Several Poverty outcomes and results for poor people. For low-income Assessments undertaken in fiscal years 2000-2001 focused countries, the PRSP is the approach through which on the links between economic growth and poverty, on the Bank is working toward operationalizing the WIDR whether growth had been pro-poor (a key concern of the 2000/2001. Debt relief under the Enhanced Heavily WEDR 2000/2001), and on the institutional and incentive Indebted Poor Countries (HIPC) Initiative is also pro- factors influencing the delivery of social services to the vided within the context of poverty reduction strate- poor. Other analytical studies conducted for countries, gies, and has already reduced the debt burden of a such as Public Expenditure Reviews and Institutional and number of countries. The CAS, the Bank's country busi- Governance Reviews, also provide important contributions ness plan, reflects the vision as well as resources and in- to our poverty reduction work. struments available, and the contribution of other The PRSP approach has prompted a major new piece partners. of analytical work, the Sourcebook for Poverty Reduc- Middle-income cotntries. A substantial proportion tion Strategies, which brings together information on the of the world's poor live in middle-income countries linkages between poverty reduction and action across a (MICs). Hence the Bank is selectively engaged with these range of sectors and cross-cutting areas of activity (such as countries, with a main emphasis on two areas: reducing the environment and gender). Analytical work on poverty vulnerability to shocks and crises that can erode gains in also includes cross-country studies-a notable recent ex- fighting poverty; and supporting governments' efforts ample is a study on poverty in the transition economies of to help social groups or geographical areas within MICs the Europe and Central Asia region-along with sectorally that suffer disproportionately from poverty. As with focused poverty work in individual countries and country- poor countries, the Bank will support national strate- based informal poverty analysis. These analytical under- gies for growth and poverty reduction that are developed pinnings are now feeding into countries' poverty reduction and owned by countries themselves. strategies (one example is the work done recently with local partners in Uganda). Reorienting country assistance and sector strategies. Reflecting the country's vision, the Bank prepares Country Tracking resutlts: monitoring and evaluation. Re- Assistance Strategies (CASs) that set out the program of sup- sults are what matter in the end. Enhancing aid effective- port over the medium term. A review of CASs prepared in ness, applying the results-oriented CDF/PRSP approach, fiscal years 2000-2001 shows that they are becoming more and promoting the principle of country ownership means country- and poverty-centered (for example by being based enhancing country level, and country managed, systems for on country-owned poverty reduction strategies where monitoring poverty outcomes and for evaluating the impact available). of strategies and interventions. And the Bank's own mon- The Bank also periodically prepares sector strategies itoring and evaluation systems are being strengthened to cap- that guide the staff's work in individual sectors of activity. ture more comprehensively the poverty impact of its Recently updated sector strategies (covering, for example, policy-based and investment lending. The multidimen- the public sector, social protection, the urban sector, and sional strategy for attacking poverty described in the WDR the financial sector) have been increasingly oriented to the 2000/2001 entails expanding monitoring and evaluation achievement of the international development goals, and efforts to cover new areas, such as various aspects of em- specifically discuss the proposals for attacking poverty de- powerment (or lack of it) among the poor. The Bank and scribed in the WDR 2000/2001; the gender and environ- other development partners are working to help countries ment strategies are good examples. Forthcoming sector improve the availability of the statistical data on which ef- strategies will continue this trend. fective poverty monitoring and evaluation depend and 4 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000/2001 strengthen feedback loops between data collectors and and country business model outlined above-founded on policy makers. More than 200 Bank lending operations in- country-owned vision, context-specific diagnosis of the clude support for building statistical capacity and the abil- policies proposed, a Bank program to support the vision and ity to use data for policymaking. We are working with informed by the diagnosis, and a focus on results-are the others-for example, through the PARIS21 consortium cornerstones of the Bank's operationalization of the W'/DR and the Trust Fund for Statistical Capacity Building-to sup- 2000/2001 agenda. The Bank is addressing all three elements port country monitoring capacity and data availability. of poverty reduction outlined by the WDR 2000/2001- The result: growing country level data availability, for ex- increasing opportunity; enhancing empowerment; and ample in the form of income or consumption surveys, and strengthening security-by undertaking action on a broad use in policy formulation. Better tools to track poverty front within the context of its overarching business model. outcormes and impacts, such as the Core Welfare Indicators While Bank approaches to address each of the three pillars Questionnaire, are also being developed and made available of the WDR 2000/2001 are presented separately below, each to cour.irres. will typically have a positive impact on more than a single Country-level capacity for data collection needs to be component. complemented by domestic capacity for data analysis and evaluation. We therefore support programs such as the Increasing opportunzitv. Tlhe Bank has traditionally Poverty Analysis Initiative for training officials in East Asia, focused on fostering growth and enhancing human devel- West Africa, and the Caribbean, and the Evaluation opment, the two main pillars of the WDR 1990/1991 on Capacity Development project (which is currently providing poverty. To operationalize the WDR 2000/2001, w e will assistance to seven countries in three regions). continue to focus on these areas, but with some shifts in em- The Bank itself is enhancing its own monitoring and phasis. First, we will pay more attention to the country and evaluation systems and capacity in the context of CASs, institutional underpinnings of growth-oriented policies Bank-supported policy reforms, and investment opera- and to their distributional effects, for example, by using tions. Initiatives, such as the Monitoring and Evaluation Im- poverty and social impact analysis to help determine the con- provement Program and the work on poverty and social sequences for poor people of a given growth strategy (or a impact analysis undertaken jointly with the IMF, are ad- set of alternative strategies). Second, we will look for ways dressing this need. to help countries make markets work better for the poor, and hence stimulate pro-poor growth. This will involve en- Supporting globalpitblic goods. The Bank contin- hancing the investment and savings climate for the poor, ues to play a major role in helping to address global issues entailing support for pro-poor legal and regulatory arrange- of special relevance to poverty reduction, such as respond- ments, access to financial markets and business services, and ing to the threat posed by communicable diseases (especially infrastructure provision. Third, we will continue to support HIV/A]DS, malaria, and TB), addressing the degradation investments-in health, education, water, and sanitation of environmental commons, and supporting improvements services-that help build the human capital of poor people, in international financial architecture (so as to help avert but will focus increasingly on improving the deliverv and or manage financial crises, which can be especially devas- responsiveness of services to the poor, and the accountability tating for poor countries and people). It is also working to of service providers. We will also look for opportunities to enhance the global spread of information technology and capitalize on opportunities for public/private partnerships knowledge, and to promote trade expansion and integra- in these areas. tion with the global community in support of economic growth and poverty reduction. Enhancing empowerment. The empowerment com- ponent of the WDR 2000/2001 agenda poses special chal- Orienting Bank operations to support lenges for the Bank. In order to frame our engagement in opportunity, empowerment, this area and to provide practical direction to staff, we are and security currently preparing a sourcebook for staff on empowerment, which will clarify concepts, outline areas/entry points for ac- The WLDR 2000/2001 laid out a comprehensive agenda for tion, and point to good practice. We currently expect our attacking poverty based on a three-pronged strategy: increas- role with respect to empowerment to have four main com- ing opportunity, enhancing empowerment, and strengthening ponents. First, we are building on progress already made in security among the poor. The Bank's strategic framework incorporating inclusion and participation into our operations, EXECUTIVE SUMMARY 5 while working to avoid potential risks and problems (for ex- that risk and vulnerability considerations are systemati- ample in terms of costs and variability in quality). We will cally taken into account in our work. In the social protec- address these and other issues in the context of an updated tion sector, work is well underway, with the adoption of participation strategy in the Bank's forthcoming Social De- regional social risk management strategies, and more sys- velopmenr Strategy Paper, and in light of evolving experi- tematic efforts are going into applying the risk management ence with the PRSP approach, which strongly emphasizes framework to Bank country assistance strategies and in the broad-based participation in strategy formulation and out- design of specific operations. Second, we have an active pro- come monitoring. Second, we will continue to support the gram in the field of disaster mitigation and management. strengthening of local organizational capacity and poor Operations in this area are evolving beyond support for re- people's participation in economic decision-making in two construction and are focusing increasingly on helping coun- main ways: supporting Community-Driven Development tries to design mitigation and coping strategies, and to (CDD) approaches in the context of individual projects; and ensure that that rehabilitation investment is resilient to fu- supporting countries' decentralization efforts in the context ture disasters. Third, we expect to continue to be engaged of public sector reform, including exploring ways to expand in post-conflict reconstruction. The Bank's Conflict Preven- our support for poor people's organizations. Third, we in- tion and Reconstruction Unit administers a Post-Conflict tend to expand our support for country-driven efforts to en- Fund, which is already assisting 24 of the 37 countries hance accountability and enforcement-for example, currently considered to be conflict-affected. We are also through better systems for public expenditure management, focusing on developing a broader understanding of secu- monitoring, and oversight, tailored to country-specific in- rity and conflict, including underlying institutional and stitutional contexts. Fostering participatory approaches and social tensions, in order to better support conflict-affected information flows to improve the accountability of public countries. institutions to the poor is a key element of this approach. Fourth, and relatedly, we will continue supporting efforts to enhance citizens' access to information, at both the pro- Challenges ahead ject and the country program/policy level. The PRSP ap- proach is part of this effort, as is our support for budgetary Despite substantial changes in how the Bank organizes it- transparency, disclosure and publication of information on self to fulfill its core poverty reduction mandate, major outcomes. challenges remain. Below and in chapter 4 we single out just As we move forward in operationalizing empowerment, four: deepening the country-centered orientation embed- careful benchmarking, monitoring, and evaluation of pro- ded in the CDF/PRSP approach; strengthening partnerships gress will be required. Developing indicators and mea- and their benefits, again in line with CDF/PRSP principles; sures of success will be a critical dimension of this agenda. further changes in the way we do business; and further main- We intend to establish an interdisciplinary group of staff streaming the WDR 2000/2001 framework for attacking that will exchange experiences and monitor progress with poverty. implementation. Deepeniing coutnitry orientation. The Bank has done Strengthening secu rity. The WDR 2000/2001 stresses much in this area, especially since the PRSP process was the importance of efforts to reduce the risks faced by poor institutionalized for low-income countries in late 1999. people owing to their vulnerability to economic shocks, nat- Country Assistance Strategies increasingly reflect the vision ural disasters, ill health, disability, and personal violence. Risk laid out in country documents. But country orientation pre- and vulnerability are particularly important drivers of sents its own challenges. For example, there is no guaran- poverty in many of the Bank's middle-income member tee that country and Bank approaches to poverty reduction countries. We are committed to expanding our operational will automatically coincide. And the quality of country work in three important areas related to enhancing the se- strategies can suffer from the imperative of speedy prepa- curity and reducing the risk and vulnerability of poor peo- ration related to donors' and countries' concerns about ple. First, we have developed a social risk management early access to debt relief and concessional assistance. The framework, presented in the fiscal year 2001 Social Protection participatory processes sought under the PRSP approach Strategy Paper, which is intended to operationalize the se- also present challenges, both for countries (which under- curity dimension of the WDR. The challenge now is to re- standably wish to maintain the sovereignty of govern- fine and implement the framework in ways that cnsure ments and associated representative institutions), and 6 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000c1'2001 for the Bank in evaluating the extent to which country Mainstreamning the WDR 2000/2001. Many of the strategies have been informed by genuinely broad-based challenges we face in implementing the WDR 2000a 2001 participation. framework for attacking poverty were implicit in the sum- mary of chapter 3 above. Here we single out a few of the Strengtheningpartnerships. Partnership is at the heart most important ones. of the CDF/PRSP approach, the drive towards enhanced Increasing opportunity. The key challenge in this area aid effectiveness, and the WDR 2000/2001 framework is to deepen our understanding of what pro-poor growth for attacking poverty. Much has recently been achieved in means, and to find ways to support it effectively in our op- strengthening partnerships-for example, in the PRSP con- erations. At the macro level this involves assessing the dis- text between the Bank and the IMF, and between the Bank tributional effects of policy-including the scaling up of (and the IMF) and other external partners-including poverty and social impact analysis work. At the micro level, bilateral donors and multilateral agencies (for example, it involves looking at the barriers to fuller participation of UN organizations and the regional development banks). We poor people in markets. Both approaches will require sub- have also developed closer links with nongovernmental or- stantial additional data and analytical work, followed by sys- ganizations dedicated to poverty reduction and to support tematic efforts to promote pro-poor growth in policv-based for the MvIillennium Development Goals. But much remains and investment lending. to be done. The goal of ensuring that all external support- Empowering the poor. Here the question is how best ers collaborate in assisting low-income countries on the basis to inform our own work on the basis of poor peoples' views, Of their comparative advantage remains to be achieved, as and to use their strengths to enhance the effectiveness of our does the hoped-for harmonization of donor policies and pro- operations. We are also supporting institutional development cedures that would ease administrative burdens on recipi- that helps to empower the poor and promotes effective de- ent countries. Work is ongoing in these areas in various fora, livery of services to them. And, as already noted, w e need but the international community (including the Bank) still clearly to define the Bank's comparative advantage and has much to do before an effective division of labor and har- mandate in this complex but crucial area. monizacion of procedures is achieved. Enhancing security. We are already working on issues related to risk and vulnerability. The challenge will be to Further chanzges in the tvay we do business. Im- mainstream this work systematically in our operations. We plemen.ing the changes in the way we work implicit in the are also following through on regional social protection plans CDF/PRSP approach, the country business model, the to focus our lending and non-lending work more sharply SFP, and the WVDR 2000/2001 goes beyond policies and on actions that will help the poor and vulnerable to with- processes; it entails further changes in our institutional stand economic shocks, natural disasters and conflict, and culture-not just in what we do but in howwe do it. For ex- on approaches that reduce their future vulnerabilitv. ample, both the CDF/PRSP approach and the WDR agenda Strengthening diagnosis. As noted above, we are work- put a premium on more integrative and interdisciplinary ing to enhance our understanding of what works and what teamwork across different Bank Group units. Cross-sectoral does not with respect to pro-poor growth. But the challenge approaches are required in areas such as governance and in this area goes deeper: it involves supporting countries in gender. Technical skills in areas such as poverty analysis and building their own capacity to undertake analytical work the relationship between public actions and poverty reduc- in this and other areas; the adoption of multidisciplinary tion, along with the skills needed to implement the SFP and approaches to analysis (in line with the WDR's emphasis our woT-k on global public goods, are being supported on the multifaceted nature of poverty and ways of attack- through a revamped Staff Learning Program. Perhaps most ing it); and the expanded use of qualitative as well as quan- fundam.ntally, the priority attached to country ownership, titative methodologies in our analytical work. which in effect transforms the traditional client-donor re- Strengthening monitoring and evaluation. Relatedly, lationship into an owner-supporter relationship, is spurring monitoring and evaluation need to be increasingly under- further attitudinal change. Practical experience-for ex- taken at the country level by the countries themselves. This ample with implementing the PRSP process-is already pro- implies substantial capacity building work, by the Bank rnoting such change, and this "learning-by-doing" process Group and development partners. The WDR s focus on em- may be as important as formal learning/training programs powerment and security also challenges us and others to de- in the process of culture change. velop indicators that can track these dimensions of poverty EXECUTIVE SUMMARY 7 and incorporate them into our lending operations and pol- endorsement of that approach by poor countries and donors icy advice to countries. alike. But we should never forget that the most important participants in the struggle to reduce the scourge of poverty Conclusion in a world of historically unparalleled global wealth are poor people themselves. All our energies, all our efforts, must be The period under review has been one of real progress in geared to better understanding their needs, building on their broadening the concept and sharpening the focus of the strengths, and supporting their aspirations for a better to- Bank's work on fulfilling its core mandate-to fight poverty morrow for their children. That must remain our goal as we with passion and professionalism for lasting results. The move forward. W1)DR 2000/2001 has been a milestone in this work, cod- ifying and extending the scope of the poverty reduction Note mission. And the international community as a whole- poor countries, rich countries, United Nations, and other 1. This edition of the Annual Progress Report on Poverty multilateral agencies, nongovernmental and civil society Reduction consolidates the findings of two documents prepared organizations-has renewed and strengthened its commit- by World Bank staff and presented to the institutionrs Executive ment to attacking world poverty, notably through the fram- Board in June 2001: a report, Poverty Reduction and the ing and wide adoption of the Millennium Declaration. World Bank: Progress in Fiscal 2000 and 2001, andapaper, Important advances have also been made in the tools avail- Attacktng Poverty Operationalizing the World Development able to address poverty, for example, through the embodi- Report 2000/2001 at the World Bank. The standard annual ment of CDF principles in the PRSP approach, and the broad progress report annexes are induded at the cnd. Introduction This Progress Report on Poverty Reduction is the seventh This progress report, therefore, in addition to covering in a series of annual reports presented by the management progress made on the Bank's poverty reduction agenda, of the World Bank to its Board of Executive Directors to also examines the progress made and challenges faced by the inform them on progress made in reducing poverty and Bank in operationalizing the WDR 2000/2001. It covers strengthening the poverty focus and impact of Bank activ- four main areas: the status of poverty around the world ities. The report was prepared by the Poverty Reduction (chapter 1); the poverty focus of World Bank activities Group in the Poverty Reduction and Economic Manage- in fiscal years 2000 and 2001 (chapter 2); how the Bank is ment Network (PREM). It reflects broad consultations moving ahead to operationalize the approach to poverty re- with staff from other groups and networks in the Bank, as duction put forward in the WDR 2000/2001 (chapter 3); well as discussions with the Board's Committee on Devel- and the challenges that lie ahead (chapter 4). opment Effectiveness and the full Board of Executive In summary, the report says that much has been accom- Directors. plished in sharpening the poverty focus of Bank activities After the previous Progress Report was published in and operationalizing the WDR through clearer strategic August 2000, the World Development Report (WDR) focus (including on the internationally agreed development 2000/2001 on Attacking Poverty was completed and goals) with respect to country business models, country widely discussed. The WDR 2000/2001 broadens the con- assistance and sector strategies, and links between analytical cept of poverty and calls for actions to promote opportu- work, strategy formulation and interventions. There have nity, facilitate empowerment, and enhance security for been significant changes in the way the Bank does business. poor people. It articulates and consolidates an intellectual But much remains to be done to build on these changes in framework for poverty reduction that has evolved through the years to come for the Bank to fulfill its mission of fight- the 1 990s, giving it more prominence and focus. Over the ing poverty-especially in the context of slower-than- last two years, the WDR has provided an important intel- hoped-for global poverty reduction and uneven progress lectual anchor for the Bank's change agenda and operations. across regions and countries. CIIAIPTR 1 Fighting Poverty: The Unfinished Struggle Achieving substantial and sustained poverty reduction is the social, and governance constraints, will be needed to achieve greatest single challenge facing the international commu- widespread progress for the world's poor. nity as the world moves forward into the 21st century. Global concern about poverty reduction has led to the Trends in income poverty broad adoption of a set of internationally agreed develop- ment goals. These goals, reaffirmed in September 2000 in Absolute income poverty, measured by the proportion of the Millennium Declaration of the United Nations, reflect the world's population living on less than $1 per day, fell both income and human development dimensions of from 28 percent in 1990 to 23 percent in 1999. But pop- poverty.' Progress in achieving these goals has been sub- ulation growth over the decade has meant that the num- stantial during the 1990s, but less rapid than had been bers of poor people have fallen only slightly over the period; hoped at the beginning of the decade. This reflects both a nearly one billion two hundred million people still live on lack of sustained economic growth in many of the poorer less than $1 per day and 2.8 billion on less than $2 per day. countries and the fact that the benefits of growth have not At the regional level there have been changes. Much of the been equally distributed. Moreover, poverty is multidimen- reduction in the proportion of poor people reflects signif- sional in nature and economic growth does not affect all di- icant economic growth and progress in poverty reduction mensions equally. This chapter briefly describes recent and in East Asia-progress that was only partially reversed by projecred trends in income poverty and then summarizes the crisis of the late 1990s. The number of poor people also trends in some of the key human development factors that fell significantly in East Asia, but all other regions experi- are both causes and consequences of poverty. Subsequent enced increases or only very small reductions (see figure 1.1 chapters will look at the Bank's response to slower than and table 1.1). The number of people in the Europe and expected progress in poverty reduction. Central Asia region living below $2 per day, which is a more adequate poverty line than $1 per day because of the higher Poverty remains deep and widespread needs for heating, clothing, and calories, more than dou- bled from 44 million in 1990 to 91 million in 1999. The development targets agreed to by the international Economic growth has been a critical force for reducing community-most recently at the Millennium Summit in poverty over the past two decades (see figure 1.2) and will New York-are ambitious. Achieving them by the target date continue to be an important factor in the future. A scenario of 2015 would require lifting more than 300 million people developed for the Bank's Global Econiomnic Prospects out of income poverty, preventing 55-60 million infant and anzd the Developing Countries 2002 shows that, with rela- child deaths and over 4 million maternal deaths, enrolling tively rapid average per capita GDP growth in developing at least 128 million more primary school students, and countries-about 3.6 percent per year, twice the average rate providing safe and affordable drinking water for 1.5 billion achieved in the 1990s-the developing world as a whole additional people. Even though incomes have grown and would be on track to reach the international development social indicators have generally improved over the last three target of halving the percentage of the population living on decades, on current trends many of the development goals less than $1 a day by 2015 compared to its level in 1990, are unlikely to be achieved. Sustained and focused com- and the total number of poor people would fall from the mitment on the part of developing countries and their ex- 1990 figure of nearly 1.3 billion to about 750 million by ternal partners, including bold efforts to address economic, 2015.2 But, even under this favorable overall scenario, 11 12 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000/2001 TABLE 1.1 Regional breakdown of number of people living on less than $1 and $2 per day, 1990, 1999, and 2015 Number of people living below $1 per day Number of people living below $2 per day Region 1990 1999 2015 1990 1999 2015 East Asia and the Pacific 452 260 59 1,084 849 284 (exclucing China) 92 46 6 285 236 93 Europe and Central Asia 7 17 4 44 91 42 Latin America and the Caribbean 74 77 60 167 168 146 Middle East and North Africa 6 7 6 59 87 65 South Asia 495 490 279 976 1,098 1,098 Sub-Saharan Africa 242 300 345 388 484 597 Total 1,276 1,151 753 2,718 2,777 2,230 (exclucing China) 916 936 700 1,919 2,164 2,040 Source World Bank (2001), Global Economic Prospects and the Developing Countries 2002, Washington, D.C Notes. The S1 a day is in 1993 purchasing power parity terms The numbers are estimated from those countries in each region for which at least one sur.ey was available d iring the period 1985-98. Survey dates often do not coincide with the dates in the above table To line up with the above dates, the survey estimates were adjusted using the closest available survey for each country and applying the consumption growth rate from national accounts Using the assumption hat the sample of rountries covered by surveys is representatve of the region as a whole, the numbers of poor are then estimated by region This assumption is obviously less robust in the regions with the owest survey coverage. The headcount index is the percentage of the population below the poverty line. Further details on data and methocology can be found in M Raval ion and S. Chen (2000), Holow Did the World's Poorest Fare in the l 990s?, Policy Research Working Paper 2409, World Bank. The n storical series to 1999 was updated In October 2001 for the 2002 edition of Global Economic Prospects FIGURE 1.1 FIGURE 1.2 Changes in the number of people living on Average annual growth in per capita GDP and change less than $1 and $2 per day, 1990-1999 in the incidence of income poverty, 1987-1998 Millions Percent 100 Europe and Central Asia S, l - 8% s_ 5 Il - . | . , . c r) Sub Latin American -5,a ..,, Africa -> --5% -2% % \ %I 0% _15'. s, South Asia East Asia and as -7% Pacific --2s0u~ 192 $1 per day ca) C12% * North Africa - Average annual growth in per capita GDP (percent) Source. World Bank (2000), World Development Report 200012001. l50 122 96 Attacking Poverty, Washington, D.C Figure 3.4. 100 s* 501 28 47 l. 50 - pX X q 4 ~ - growth averaging 2.3 percent per capita per year, the de- -5, S . Middle Fast Latin Europe and South Asia Sub-Saharan world a whole dd reach the t Th A .1 and North America Cental As a Africa veloping as wou not target us, 15 Africa and the sustained long-term growth is critical to ensure significant --20.Cl poverty reduction. --2501 235 $2 per day These projections need to be treated with caution, be- 300 cause of the data and assumptions that underlie them. De- Source Wc r d Bank data spite enormous progress in measuring poverty over the past 10 years, recent data are missing for a number of countries, regional variations in projected growth rates mean that not especially in Africa. There is also substantial uncertainty all regions would achieve similar progress. For example, per about the data for the world's two most populous countries, capita growth in Sub-Saharan Africa over 2005-2015 is pro- China and Itidia, owing to large discrepancies between na- jected to be only 1.5 percent a year. As a result, Sub-Saharan tional accounts and household survey measures of private Africa would remain far from reaching the percentage consumption. The projections also assume that inequality reduction target, and the number of its absolute poor would would not change for most of the developing countries, continue to increase (see tables 1. 1 and 1.2).3 With less rapid and would increase in China and India in line with trends FIGHTING POVERTY: THE UNFINISHED STRUGGLE 13 TABLE 1.2 Regional breakdown of headcount index of people living on less than $1 and $2 per day in developing countries, 1990, 1999, and 2015 Headcount index (percent), $1 per day Headcount index (percent), $2 per day Region 1990 1999 2015 1990 1999 2015 East Asia and the Pacific 27.6 14.2 2.8 61.1 46.2 13.5 (excluding China) 18.5 7.9 0.9 57.3 40.4 13.3 Europe and Central Asia 1.6 3.6 0.8 9.6 19.3 8.7 Latin America and the Caribbean 16.8 15.1 9.7 38.1 33.1 23.4 Middle East and North Africa 2.4 2.3 1.5 24.8 29.9 16.7 South Asia 44.0 36.9 16.7 86.8 82.6 65.5 Sub-Saharan Africa 47.7 46.7 39.3 76.4 75.3 68.0 Total 29.0 22.7 12.3 61.7 54.7 36.3 (excluding China) 28.1 24.5 14.8 58.8 56.5 43.0 Source and notes: see table 1.1. TABLE 1.3 Countries with net primary enrollment rates of less than 50 percent (percent of relevant age group) Country % Total % Female % Male Country % Total % Female % Male Niger 25 19 30 Mozambique 40 34 45 Eritrea 30 29 32 Gu nea 42 33 50 Burkina Faso 31 24 37 Chad 46 33 59 Mali 31 25 38 Tanzania 48 49 48 Ethiopia 32 25 40 Source: World Bank (2001), World Development Indicators 2001, Washington, D.C. (vwv.worldbank.org/data/). observed in the past decade. Changes in inequality other where countries have succeeded in bringing more children than those assumed could alter significantly the rate of re- to school the quality of education is a major concern. In duction in poverty. Africa, gross primary school enrollment rates actually fell Despite these reasons for caution, the broad trends between 1980 and the mid-1990s, and nine countries still are clear. With sustained and robust economic growth in reported net primary enrollment rates of less than 50 percent the developing world, the development target of halving (see table 1.3). The ratio of girls to boys in primary and sec- income poverty can be met, and the absolute number of poor ondary education has risen from 83 percent in 1990 to 89 people can decline, quite dramatically in those regions that percent in 1999, but many countries remain far from the have historically had growth rates exceeding the average for goal of achieving gender equality in education, and little time developing countries. But many countries-especially in is left to achieve the target of a one-to-one ratio in 2005. Africa-and many individuals would remain at risk of per- Many of the countries that have low overall enrollment rates sistent income poverty. Under conditions of more modest have even lower rates for girls (see the table). growth-such as that observed during the 1980s and Data on infant and child mortality show continued 1990s-the target would not be met; the absolute numbers of progress in all regions in the 1990s. Globally, under-five mor- poor people would differ little from current levels, and would tality declined from 86 to 78 per thousand live births be- rise substantially in Sub-Saharan Africa (see figure 1.3). tween 1990 and 1999. But this rate of change is projected to be too slow to reach the target of a two-thirds reduction Progress toward human development goals by 2015 compared to 1990. And over half a million women continue to die each year during pregnancy or childbirth, Progress on achieving the internationally agreed develop- a number that could be dramatically reduced if more births ment goals for education, gender equality, and health has were attended by skilled personnel. been slow. Primary school enrollments have not increased The Millennium Declaration added to the earlier In- enough to meet the target of 100 percent by 2015, espe- ternational Development Goals the target of doubling the cially in South Asia and Sub-Saharan Africa; more than a share of population with access to safe and affordable water hundred million children are still out of school, and even by 2015 compared to 1990. An additional 1.5 billion people 14 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR2oOO/2001 FIGURE 1.3 Share of the population living on less than $1 and $2 per day, 1990, 1998, 2015 (projections), 2015 (target) _- -- Rate of progress needed to halve poverty by 2015 0 -o Prospect of reduction in $1 per day poverty incidence u-o Prospect of reduction in $2 per day poverty incidence (selected regions) 60 60 East Asia and Pacific Europe and Central Asia 50 50 40 40 30 $1 perday 30 $2 per aay 20 - ___target 20 poato 20 v < = _ pSroJect~~~~~~~~~~io projctin 1ction 10 1 per day projecti O - 0 ,,a - O - - =arget 1999 2015 1990 1999 2015 60 60 Latin America and the Caribbean Middle East and North Africa 50 50 40 $2 per day 40 $2 per day 30 projion 30 20 st per day 20 projet on ~~~~~= = o n z~~~~~~o 10 _ 10 $1 per day projection target 0areet 0 0 1990 1999 2015 1990 1999 2215 60 60 South Asia Sub-Saharan Africa 50 50 ______________________ o $ 1 perdcay -_pro ection 40 40$1 perday - 30 tagt 30 20 20 target 10 projection 10 0 a~~~~~~~~~~~~~~~~~ 0 990 1999 2015 1990 1999 2015 Source: \Aordd Bank data. would nteed to gain access if this target is to be reached; compared with 420,000 a year before.' In eightAfrican coun- recent gains have been slow. tries (including Botswana, South Africa, and Zimbabwe), The. spread of AIDS poses a special challenge to the 15 percent or more of adults live with HIV or AIDS. In 2000 achievement of the development goals. UNAIDS has esti- there were 3 million deaths due to AIDS, the highest global mated that 36.1 million individuals are living with HIV or total since the beginning of the epidemic, and 5.3 million AIDS, the vast majority of them in Sub-Saharan Africa newly infected individuals. Most new infections of HIV are (25.3 million, 70 percent of the total) and South and South- also in Sub-Saharan Africa (3.8 million).6 Women are particu- East Asia (5.8 million, 15 percent). In Europe and Central larly vulnerable, and the rapid rise in adult deaths is leaving Asia, a conservative estimate puts the number of adults an unprecedented number of orphans: 13.2 million world- and children living with HIV or AIDS in 2000 at 700,000, wide, 12.1 million of them in Sub-Saharan Africa alone. FIGHTING POVERTY: THE UNFINISHED STRUGGLE 15 TABLE 1.4 cases, conditions have worsened more severely than global Declines in life expectancy between 1990 and 1999 or regional averages suggest; in others, conditions have im- (years of life) proved dramatically and people live substantially better lives today than they did a decade ago. Even in Africa, there Zimbabwe -15.7 Namibia -7.5 are countries that have broken the cycle of conflict, low South Africa -13.5 Congo, Dem. Rep. -5.8 growth, and poverty. Differences in growth rates partly Lesotho -13.0 Korea, Dem. Rep. -5.3 explain different country experiences in povery reduction; Zambia -10.7 Malawi -5.2 el d Swaziland -10.4 Tanzania -5.1 initial inequalities, and geographic and social barriers, also Source: World Bank (2001), World Development Indicators 2001, Wash ngton, play an Important role. D.C. (wvwv.worldbank.orgIdataJl. Differences between countries Today, in some African countries one in 10 children is an orphan. Over the past decade, income poverty fell in countries that In many countries, human development indicators have achieved rapid growth and rose in those that experienced deteriorated substantially over the last decade, in large part stagnation or contraction. The global percentage decline in because of AIDS. For example, average life expectancy in the extreme poverty during the 1990s was driven by high rates Africa region fell from 50 years in 1987 to 47 years in 1999. of growth in countries with large numbers of poor people. In the countries hardest hit by the epidemic, such as Countries such as China, Bangladesh, India, and Vietnam Botswana, Zimbabwe, South Africa, and Lesotho, decreases made progress. China accounted for a fourth of the total exceeded ten years of life (table 1.4). Child mortality in- number of the world's poor in 1990 and for less than one- creased from 155 per 1,000 in 1990 to 161 per 1,000 in fifth at the end of the decade, thanks largely to annual av- 1999, while it declined elsewhere in the world (table 1.5). erage per capita GDP growth of 9 percent over the decade. Health care systems weakened by conflict, poor management, In Bangladesh, steady growth reduced the incidence of and the impact of AIDS cannot cope with traditional ill- poverty during the 1990s, in contrast to the relative stag- nesses such as malaria and tuberculosis, which continue to nation experienced in the 1980s. In India, the share of the kill millions.7 Obviously, other factors such as conflict and population living in poverty declined moderately through poor governance contribute to the deterioration in living the 1990s, but not sufficiently to reduce the absolute num- conditions in many African countries, but AIDS poses a spe- ber of poor (as noted earlier, however, the Indian poverty cial threat because it tends to attack people of prime work- data are subject to considerable uncertainty). In Vietnam, ing age, it is eventually fatal, and containing its spread has rapid growth in per capita expenditures, stimulated by agri- proved to be difficult. cultural diversification and overall economic growth, led to a decline in the incidence of poverty from 58 percent in 1993 Experiences vary to 37 percent in 1998.' Countries that experienced crises saw income poverty The discussion so far has focused mostly on global and re- increase significantly. The largest percentage increases in gional averages, but these averages conceal very wide vari- poverty over the decade took place in the countries of the ations across and within countries during the 1990s. In some former Soviet Union. In the Russian Federation, the breakup TABLE 1.5 Trends in under-5 mortality, selected years, 1970-1999 (per 1,000) % Change Region 1970 1980 1990 1997 1999 1990-1999 East Asia and Pacific 126 82 55 47 44 -19 Europe and Central Asia n.a. n.a. 34 29 26 -22 Latin America and Caribbean 123 80 49 41 38 -23 Middle East and North Africa 200 136 71 58 56 -21 South Asia 209 180 121 104 99 -18 Sub-SaharanAfrica 222 189 155 159 161 4 Developing countries 167 135 91 87 85 -6 OECD 26 14 9 6 6 -26 Source: World Bank (2001), World Development Indicators 2001, Washington, D.C (www.worldbank.org/data/). 16 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000,'2001 of the central planning system was accompanied by a steep high inequality (Gini coefficients around 0.6)-1.5 versus fall in output and a sharp increase in inflation; poverty as 3 percent. High inequality reduces the impact of growvth on measured by the national definition jumped from an esti- poverty: the poor gain less from growth. mated I 1 percent during the Soviet period to 43 percent Trends in inequality have varied across and within coun- by 1996, and probably increased further with the 1998 crisis. tries. For example, Malaysia saw declines in inequality dur- Moldova, one of the countries hardest hit by the 1998 crisis ing the 1980s and increases in the 1990s. Increases in and today one of the poorest countries in Europe, experi- inequality between urban and rural areas were observed in enced a sharp worsening of poverty; the percentage of India and Bangladesh, where urban poverty appears to people living below the national poverty line increased have declined twice as fast as rural poverty. Changes in from 35 percent in May 1997 to 46 percent in the fourth growth rates appear on average not to be correlated with quarter of 1998. changes in inequality.9 Korea and Indonesia experienced A recent study on changes in poverty over time done rapid growth during the 1980s with little change in in- jointly by the Bank and partners in the Strategic Partnership equality, while China experienced rapid growth in the with Africa found similar results. Looking at the linkages 1990s with large increases in inequality-notably between between poverty indicators, reforms, and growth, the study the poorer and more rural western provinces and the more identified three groups of countries. In those experiencing industrialized east. The African study on poverty dvnam- some sustained economic recovery and stability, poverty ics mentioned above found stability of inequality during has fallen and inequality has not increased (Ethiopia, Ghana, episodes of both growth and recession. Exceptions to this Mauritania, and Uganda). Where growth has faltered, the pattern are the transition countries of the former Soviet incidence of poverty has remained mostly unchanged Union, where sharp declines in production were accom- (Madagascar and Zambia). In countries where there has panied by dramatic increases in inequality both within and been economic decline, poverty rates have increased sharply, across regions. In sum, the evidence to date is not sufficient although mitigated by reduced inequality (Nigeria and to understand trends in inequality over time and to project Zimbabwe). changes in inequality, but it is clear that increases in inequal- ity can slow progress in poverty reduction. Differences within countries: inzitial inequialities, In addition to income inequality, there are often major geographic and social excluision inequalities within countries in access to services and indi- cators of human development. Data from demographic Inequality strongly influences the extent to which growth and health surveys for the 1990s indicate for example that is effective in reducing income poverty. As figure 1.4 shows, the poor are less likely to obtain health care. In 40 coun- high inequality in the distribution of income, as measured tries, only 29 percent of births among people in the bottom by the Gini coefficient, was correlated with lower reductions 20 percent of the distribution were attended by medically in the incidence of poverty for a given rate of growth in a trained health staff, compared with 84 percent for those in sample Df 65 countries in the 1980s and 1990s. Countries the top 20 percent. Over the same period, only 34 percent with low initial inequality (Gini coefficients around 0.2) were of the poor suffering from acute respiratory infections were able to reduce poverty twice as much as countries with treated in a health facility, compared to 57 percent of the non-poor (see figure 1.5).)o FIGURE 1 4 Geographic and social exclusion play a role in determining Initial income inequality and poverty reduction inequalities. In many countries, people living in remote areas, 4 members of minorities, and indigenous groups have higher ) E rates of poverty and lower social indicators than the aver- _ - 3 - age. In Brazil, for example, more than 60 percent of the coun- Q 2 - try's poor live in the mostly indigenous North-East of the o X X country. In the Europe and Central Asia region, recent poverty 0.2 a ¢ E - - -assessments highlight striking levels of poverty among X _ ~ l ~ l ~ l the socially marginalized Roma population. In Bulgaria, over 0.2 0.4 0.6 84 percent of the Roma lived below the poverty line in 1997, Initial Gini coefficient compared to 36 percent nationally; in Hungary, one-third Source: World Bank (2000), World Development Report 2000/2001: of the long-term poor are Roma, although they make up Attacking Poverty, Washington, D C., Figure 3.6. only five percent of the population."l FIGHTING POVERTY: THE UNFINISHED STRUGGLE 17 FIGURE 1.5 A Better WorldforAll, www.paris2l.org/betterworld). The tar- Poor-rich inequalities in access to different types gets set are important for well-being, but they are incomplete in of health care their coverage of the empowerment and security dimensions of I Poorest population quintile * Richest population quintile poverty, where work is still required to define indicators. 90.0 - 84.0 2. Long-term growth for developing countries is only marginally 80.0 67.9 71.3 lower than in last year's base-case scenario-3.6 percent versus 3.7 70.0 56.8 54.1 percent. This is because, while short-term prospects are heavily in- 60.0 50.0 37.9 fluenced by the currently depressed global environment, long-term 40.0 28.9 trends depend more directly on economic fundamentals, such as 20.0 trends in savings, investment, population growth, trade, produc- 10.0 tivity, and policy changes. 0.0 Immunization Treatment of Use of oral Deliveries 3. World Bank (2001), Global Economic Prospects and rates (children acute respiratory rehydration attended by a the Developing Countries 2002, Washington, D.C. (www. 12-23 months) infection therapy medically trained person worldbaiik.org/prospects/gep2002/). 4. See the scenarios developed for the 2001 edition of GEP: Source: Country Reports on Health, Nutrition, Population, and Poverty World Bank (2000), Global Economic Prospects and the De- (www.worldbank.org/poverty/health/data/Index.htm). X v^eloping Gountries 2001, Washington, D.C. (www.worldbank. org/prospects/gep200 1 /). While the status of women has improved greatly in the 5. UNAIDS AIDS Epidemic Update (December 2000), avail- last century, women continue to suffer from exclusion and able at http://www.unaids.org/wac/2000/wadOO/files/WAD_ unequal rights, limited access to resources, and lack of voice, epidemic_report.htm. all of which limit their ability to escape poverty. Women 6. See UNAIDS/WHO (2000), AIDS Epidemic Update: seldom have the right to own land independently, and December 2000, (http://www.unaids.orgJepidemic_.update/ often lose access to land if their marriages end. Women's and report_dec00/index..dec.html). The country data are from the girls' levels of education continue to be lower than men's- WDI 2001 (data for 1999). in South Asia for example women have only half as many 7. Malaria affects an estimated 300 million people worldwide years of schooling-and pay levels in wage jobs are lower, and kills at least one million people each year, three-quarters of Women also have limited opportunities to express their needs them children under five. Sub-Saharan Africa suffers the highest and views in public settings-they are greatly underrepre- exposure rates-9 out of 10 cases of malaria occur there-followed sented in parliaments and high-level government positions. by parts of Asia and Latin America. It has been estimated that In community meetings, social constraints mean that they malaria reduces GDP growth by 0.25 percent per year on aver- often do not speak up. Experience shows that reducing age, and by 0.55 percent per year in Sub-Saharan Africa (see gender inequality contributes to reducing poverty. 12 F. Desmond McCarthy, Holger Wolf, and Yi Wu (2000), "Malaria The variety of experiences across and within countries and Growth," Policy Research Working Paper 2303, Washi ngton, points to the importance of both economic and social fac- D.C.: World Bank, available at wblnOO18.worldbank.org/ tors in determining progress and the need to apply poverty research/workpapers.nsf/ policyresearch?openform). reduction strategies that take into account the multidi- 8. Based on the national poverty line. mensional nature and multiple causes of poverty. 9. See M. Ravallion (2000), "Inequality Convergence in the Developing World," Washington, D.C., World Bank. Notes io. See also table 2.7 in World DelelopmentIndicatots 2001. 11. See World Bank (2000), Making Transition Workfor 1. The Millennium Declaration Goals included in the dec- Ev eryone: Poverty and Inequality in Europe and Central laration signed by over 150 Heads of State or Government in Asia. Washington, D.C. September 2000 in New York expand on the International De- 12. See World Bank (2000), Engendering Development, velopment Goals (see IMF, OECD, UN and World Bank (2000), Policy Research Report, Washington, D.C. CHAPTER 2 Operationalizing the WDR 2000/2001 through Broader Understanding and Sharper Focus The trends in poverty indicators discussed in chapter 1 as many people out of poverty a year (19 million people in- have challenged the development community to reflect on stead of 10 million).2 Where commitment to reform is what has worked and what has not worked in its support lacking, aid cannot "buy" it. The same study on Africa to developing countries, and to broaden its approach to shows that attaching conditionality to aid was not effective poverty reduction. This chapter begins by reviewing the work in leading to policy changes in non-reforming countries. on aid effectiveness and the World Development Report Thus, recent aid effectiveness research suggests a differ- 2000/2001 that together provide the intellectual under- ential approach to the provision of assistance based on coun- pinnings for a deepcning of poverty reduction strategies. It try commitment. Where there are well-designed poverty then moves on to describe how the Bank's strategic direc- reduction strategies supported by broad commitment, policy- tions and business model have evolved to respond to the chal- based and sector-wide support can deliver aid effectively lenge of operationalizing the WIDR 2000/2001, and how within the context of a country's budgetary processes, while Bank instruments, such as Country Assistance Strategies, individual projects can be used to pilot new approaches, learn Sector Strategies, and analytical work, are evolving in line key lessons on capacity building, and find ways to strengthen with the model. Meanwhile, the Bank has also refined its service delivery. For countries not committed to reforms, the support for global public goods in the context of poverty focus may need to be more on analytical and advisory services reduction and the WDR 2000/2001 framework, as out- than on financial aid. lined in the final section. Aid effectiveness can also be compromised by factors other than lack of commitment to poverty reduction, in- Intellectual underpinnings cluding donors' lack of coordination and conflicting advice, both of which overburden government staff. Aid is more ef- Spurred by the experience of the 1 990s, research has focused fective when donors support a country's poverty reduction both on what makes aid effective and on the policies and strategy in a coordinated way, based on their comparative reforms needed to reduce poverty. advantage, working in partnership with the government and each other. Lessons on aid effectiveness Theframewvork of the World Development Recent work on aid effectiveness has confirmed that aid has Report 2000/2001 had the most impact in countries that have a strong com- mitment to reforms designed to promote growth and re- The W/DR 2000/2001 looked in depth at the policies and duce poverty. Commitment needs to be widely shared reforms needed to achieve poverty reduction. Based on a re- within countries. A recent study of ten countries in Africa view of the experience of the 1 990s and extensive research highlights how successful reformers, such as Uganda, have on the nature and causes of poverty, the WDR broadened put consultative processes in place that result in broad con- the concept of poverty and advocated a multidimensional sensus on reforms. In these cases, support extends beyond approach to poverty reduction. It presented an expanded key government officials to civil servants, community lead- framework with actions at the country and global levels ers, and researchers.1 It has been calculated that, if current in three interconnected areas-opportunity, empower- aid were directed to countries with high poverty rates that ment, and security-corresponding to three dimensions of also have effective policies and institutions, it could lift twice poverty.3 19 20 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000,2001 Opportlaitty. Crucial to the creation of opportunities are poverty reduction. Determining what might be the most actions that support healthy economic growth. As noted in effective policies in a given country context can best be chapter 1, GDP growth is positively correlated with reduc- achieved through broad consultative processes that bring our tions ir, income poverty as well as with improvements in so- the needs of different groups and help forge consensus on cial indicators. Macroeconomic stability, effective structural strategies for action, informed by careful analysis of the na- and regulatory policies, and good management of public ex- ture and causes of poverty. penditures all contribute to creating a sound climate for pri- The WDR also emphasized that actions at the country vate investment, which in turn can spur GDP growth and the level need to be complemented by global initiatives to ad- creation of gainful and productive employment. Bangladesh, dress constraints that individual countries alone cannot re- China, and Vietnam, for example, all experienced fast growth move. This requires collaborative action by industrial (with s.rong agricultural growth) and significant poverty re- countries, international organizations, private companies, duction in the 1 990s. But growth alone is not enough. The the research community, and other global players across a poor ard vulnerable may not be able to share in its benefits- broad spectrum. The agenda for international action includes for example, if they lack the good health and the skills required maintaining economic and financial stability; opening up to find gainful employment, or if the areas in which they live markets in industrial countries and reducing subsidies; and are cut off because of poor infrastructure. Thus, investments providing aid and debt relief in ways that strengthen rather in health, education, rural water, and infrastructure, delivered than undermine country ownership. The provision and main- by institutions that effectively serve the poor, are necessary to tenance of global public goods, such as medical and agri- ensure :hat the benefits of growth are broadly shared and that cultural research, information, environmental commons. inequalities in income, assets, and access do not increase. and the international financial architecture, is also critical. The development community is increasingly reflect- En?powernment. Empowerment means strengthening ing in its work the lessons learned on aid effectiveness and the caFacity of poor people to affect decisions that have a the broadened concept of poverty and the framework for bearing on their lives, and removing barriers that prevent action put forth in the IVDR 200012001-for example them from engaging effectively in political, social, and eco- in the Guidelines on Poverty Reduction recently endorsed nomic activities. Empowerment is important in itself: lack by the Development Assistance Committee of the OECD. of voice and representation are identified by many poor peo- The main implications of this body of work for aid are: ple as a dimension of poverty. It is also important because * Countiity ownership anidparticipationi. Aid should it can improve the extent to which policies and institutions support countries' poverty reduction strategies devel- respond to the needs of the poor, including by creating a pow- oped through participatory processes that ensure broad erfiul voice against corruption. Thus actions to support empow- ownership. erment are an essential part of a poverty reduction strategy. * C)reating opportiltuiies. Special attention needs to be paid to supporting pro-poor growth and market oppor- Sec iuity. Vulnerability to shocks such as illness and in- tunities for the poor, as well as for women and other dis- jury, economic downturns, and natural disasters is an im- advantaged groups, and to gaining a better understanding portant dimension of poverty. Poor countries and people are of the linkages between policies and poverty impacts. typically less able to withstand shocks than the better off. Empoa'eriKng the poor This is a relatively new and chal- They are also less able to bear risk, which in turn con- lenging area for donor involvement. Supporting em- tributes to limiting their opportunities by leading them to powerment includes working to improve governance and choose low-risk, low-return activities. Actions that reduce the accountability to citizens, strengthening the participa- likelihood of shocks and help manage the consequences of tion of the poor in local decision-making, and sup- shocks when they occur so that poor households do not lose porting the informal institutions upon which the poor productive assets and poor countries can recover more quickly rely. Donor assistance should also help countries to re- are also an integral part of poverty reduction strategies. duce and remove exclusionary social and institutional The WDR stressed that sustainable poverty reduction barriers-all while respecting national sovereignty and depends on mutually reinforcing initiatives in all three areas the functioninig of existing representationi fmeclhanisms. and that the design and sequencing of actions to spur growth * increasing secu7i-t. Risk management-at the macro- and reduce poverty in a given country depend on its spe- economic, financial, and sectoral levels, as well as at the cific economic, social, and political environment. There can household level-needs to be part of poverty reduction be no single "one size fits all" prescription for effective strategies, rather than an afterthought. OPERATIONALIZING THE WDR 2000/2001 THROUGH BROADER UNDERSTANDING AND SHARPER FOCUS 21 * Global actions to eliminate poverty. Donors need * Empowering poor people to participate in devel- to support selective action at the global level and work opment and investitng in them. Empowering poor to ensure that their own policies in various areas (par- people and investing in their human capital enables ticularly in the area of trade) are consistent with the ob- them to develop their capabilities and contribute to and jective of reducing poverty. In addition, rich countries benefit from growth. Basic services, especially education need to ensure increased participation of poor countries and health, are a priority, as are building poor people's in global fora and decision-making processes. assets and protecting those who are most vulnerable. * Resuilts and accountability. Donors agree that, as part- The SFP identifies work at the country level as the ners in attacking poverty, they need to be more ac- Bank's primary focus, while also recognizing a role for Bank countable in achieving and demonstrating results. This Group support for poverty reduction action at the global implies greater efforts than hitherto on monitoring and level. In line with the recommendations of the WDR evaluating impacts and greater transparency on activi- 2000/2001, Bank work at the country level is increas- ties and results. ingly adapted to country-specific situations and institu- The remainder of this chapter discusses how the World Bank tions; increasingly grounded in sound, country-specific is applying these lessons. poverty diagnoses, reflecting the multidimensional aspects of poverty; and increasingly aligned with nationally-owned country strategies for effective poverty reduction. In addi- The World Bank's strategic framework tion, given the Bank Group's scarce resources, the SFP also and country business model outlines criteria for selectivity designed to maximize the im- pact of its actions on poverty reduction, within countries, The Bank has taken up the challenge of reflecting the im- across countries, and at the global level. It stresses the need plications of the aid effectiveness research and the WIDR in to take into account specific competencies and compara- its operations. This effort has been ongoing for some time, tive advantage when planning activities, and it calls for ac- as the analytical work progressed, and has in turn been in- tions to reduce the costs of doing business with the Bank, fluenced by ongoing thinking. A strategic framework and including actively seeking greater policy harmonization country business model that foster ownership and part- with other multilateral development banks. nership have been developed. The principles outlined in the SFP reaffirm the Bank's business model. The country business model, endorsed by The strategic framework and country the Development Committee at its September 2000 meet- business model ing in Prague, is based on four pillars: the country's vision of its development process; the Bank's diagnosis of the A Strategic Framework Paper (SFP) designed to guide Bank country's policies and institutions; the Bank program of sup- work over the next 3-5 years was endorsed by the Bank's port informed by the diagnosis and designed taking into ac- Executive Directors in January 2001. The SFP identifies two count resources, constraints, and the role of other partners; priority areas for support to member countries, both of which and a focus on results. The business model refutes the idea will help to translate the principles of the WDR into oper- of a "one size fits all" approach and stresses that Bank ational actions and should lead to more rapid progress to- Group support is to be tailored to each country's individ- wards the internationally agreed development goals.4 Actions ual circumstances and needs. The business model also in- in these areas are inter-related, and capacity building is corporates the SFP's emphasis on greater selectivity, implying emphasized in both. careful choices about how to deploy scarce resources and Buildinig the clinatefor inivestneni, jobs, and sus- competencies within and across countries. While the same taimiable growth. Sustainable and equitable growth is approach applies to all countries, its implementation dif- vital for generating the jobs and the resources for services fers for IDA and IBRD borrowers. that are crucial for poverty reduction. Growth depends fundamentally on creating a positive investment climate Implementation in low-income countries for micro, small, medium, and large firms-including better governance, appropriately supportive institutional Low-income countries that receive assistance from the Bank's and policy structures, and the necessary infrastructure- concessional lending affiliate, the International Devel- and on reducing volatility and risks, including the risk opment Association (IDA), have been articulating their of financial crisis. vision of development through poverty reduction strategies. 22 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000/2001 These strategies are country-owned and based on broad par- ticipatory processes; are partnership-oriented (not only BOX 2.1 with in-country stakeholders but also with external partners); Diagnostic Economic and Sector Work are founded on a long-term, comprehensive diagnosis that Social, structural, andsectoralanalysis. A first key an- rakes account of the multidimensional nature of poverty; alytical input into Bank work in a country is an analysis and clearly identify and monitor priority actions expected of the country's social, structural, and key sectoral poli- cies. The analysis would focus on how social, structural, to yield results. They are captured in national Poverty and sectoral public action can have an impact on the Reduction Strategy Papers, which are being presented to the multiple dimensions of poverty, including ooportunit, Boards of IDA and the Fund. Along with Joint Staff Assess- empowerment, and security, and identify policy and in- ments by IDA and IMF staffs, Poverty Reduction Strategy ;iiiriaI development priorities needed for sustainable Papers provide the basis for IDA assistance, IMF support growth and progress towards achieving the development goals. The analysis would also review the positive and ad- under the Poverty Reduction and Growth Facility, and verse impacts that the priority actions may have on poor debt relief under the Enhanced Heavily Indebted Poor people and other vulnerable groups, and on the envi- Countries (HIPC) Initiative. Because the process of prepar- ronment, and assess the capacity to mitigate undesirable ing country-owned PRSPs can be complex and lengthy, impacts. in-depth analytical work, such as poverty as- shorter and simpler Interim PRSPs (I-PRSPs) have been pre- sessments and social and environmental studies, would in- form the analysis, which would in turn inform Joint Staff pared by countries working on full PRSPs, in order to help Assessments and Country Assistance Strategies. speed their access to concessional assistance and debt relief. It is expected that full PRSPs will be prepared about every Fiduciary assessment. A second key analytical input is three years, supplemented vearly by annual progress re- an integrative analysis of the country's public financial ac- port,and will form the basis of a countrv's relationship with countability arrangements. This analysis would cover pub- I Ott5, IIc expenditure, procurement, and financial management its external partners. One of the major benefits expected from systems and provide insight into governance and ac- the PRSP approach is improved donor coordination, includ- countability, which are now recognized as critical for ing greater harmonization of donor policies and procedures. poverty reduction. The assessment would normally focus Reflecting the vision articulated in poverty reduction on: (a) the comprehensiveness and transparency of the strategies, Bank diagnostic work for low-income countries budget, with an appropriate focus on poverty-reducing public spending; (b) the adequacy and transparency of sys- is increasingly fcstems to guide and monitor budget implementation, in- and evaluation, that are critical for the success of poverty cluding procurement; and (c) the adequacy and transparency reduction strategies. In particular, the low-income business of systems for monitoring, reporting on, and auditing model envisions two sets of integrative analyses as key in- public financial flows. Such fiduciary analysis would iden- puts to J SAs, to the CAS, and to PRSCs, where appropriate: tify action plans to address remaining weaknesses. social, gtructural, and sector analysis, and fiduciary assess- ments (see box 2.1). The PRSP approach also lays much greater emphasis than in the past on supporting diagnos- As countries move forward with the preparation and im-- tic work done in countries, to foster capacity building and plementation of poverty reduction strategies, IDA lending greater ownership of findings and policy choices. instruments are increasingly tailored to support the coun-- The country's vision for development informs the Bank's try's strategic priorities, as set forth in the CAS. For exam- prograrn.5 In effect, and in line with the principles set forth ple, Poverty Reduction Support Credits (PRSCs) link IDA in the C(omprehensive Development Framework, the ap- assistance to priority policy reforms and public actions out- proach is designed to reverse the traditional aid relationship lined in the PRSP. A PRSC program typically involves a se- by putting the country in the lead. IDA Country Assistance ries of individual operations (individual PRSCs) that together Strategies (CASs), that present IDAs business plan in sup- support the country's medium-term development and re- port of the country's poverty reduction strategy, are in- form program aimed at implementing its poverty reductiorn creasingly based explicitly on a country's PRSP The SFP's strategy. PRSCs are typically based on up-front actions objective of selectivity at the country level is achieved by sup- that demonstrate progress in reforms and towards definec porting countries' priority actions for poverty reduction as poverty outcomes. Individual PRSCs will be phased in line expressed in their PRSPs and as assessed through Bank di- with the government's annual budget and policy cycle to agnosis, taking into account the respective comparative ad- the extent practicable. Over time, PRSCs are expected to vantages of IDA and other partners. become an increasingly important element of overall IDA OPERATIONALIZING THE W7R 2000/2001 THROUGH BROADER UNDERSTANDING AND SHARPER FOCUS 23 support for the poverty reduction strategies of low-income for global public goods. Fourth, many MICs face obstacles countries with strong programs.6 Other instruments, in- to faster growth and poverty reduction related to weak cluding investment projects, will also increasingly focus on social, structural, and sectoral policies and institutions-areas the objectives set forth in the PRSP. in which the Bank Group can help, based on its accumu- A key element of the low-income country business lated experience. Fifth, although a substantial number of model is the provision of enhanced debt relief, as many of MICs have access to private flows of resources, private mar- the world's poorest countries have been hampered in their kets do not always have a sufficiently comprehensive view growth and poverty reduction efforts by unsustainable bur- of countries' development progress, or the willingness to un- dens of external debt. By September 2001, 23 countries- dertake long-term lending to MICs at appropriate matu- more than half of those qualifying under the Enhanced rities. Relatedly, MICs can be highly vulnerable to fluctuations HIPC Initiative-had reached their Decision Points, and in financial flows. The Bank can help with these problems two (Bolivia and Uganda) had reached their Completion through its own lending (which in turn can help "crowd in" Points, thus obtaining irrevocable debt relief. The decrease private flows) and through advisory services and technical in external indebtedness provided to the 23 countries amounted assistance on reducing the risks of volatility and on setting to about $33 billion in net present value terms, a 61 percent up coping mechanisms for periods of high volatility. reduction from the pre-relief level of $54 billion. Several principles guide Bank involvement in MICs. Debt service savings are also substantial, about $1.1 First, the Bank's priority in these countries, as in low-income billion annually, and interim assistance provided by the Bank countries, must be to support national poverty reduction and others at the Decision Point offers countries the op- efforts. Second, since Bank financing in MICs is often only portunity to increase spending in the priority areas identi- a small share of the resources available to these countries, fied in Interim and full PRSPs. There are indications that its support needs to be highly selective and designed to serve additional resources are being allocated to health and edu- as a catalyst for important policy and institutional change, cation, HIV/AIDS programs, and rural infrastructure. Since for stable and sustainable private flows, and for support from debt savings are only a fraction of public resources, it is of other development partners. Third, MICs are very diverse, great importance that PRSPs focus on the whole public ex- in terms of income levels, size, capacity, and needs; this puts penditure program, to ensure that all foreign and domestic a special premium on the need to tailor Bank assistance to resources are spent well. Work on strengthening public ex- individual country conditions. penditure management is ongoing in most PRSP countries. The implementation of the country business model in MICs, as endorsed by the Development Committee in Implementation in middle-income countries April 2001, parallels implementation in low-income coun- tries in several key respects.7 The Bank's business program, The Banks approach in middle-income countries (MICs), outlined in the CAS, supports the country's own articula- that are eligible for IBRD lending and have some access to tion of its development vision and agenda. Core diagnos- financial markets, reflects the issues confronting these coun- tic Economic and Sector Work (as outlined in box 2.1), along tries. There are a number of reasons for continuing Bank with additional analytical work as needed, provide the un- engagement in MICs. First, many of the world's poor live derpinnings for the Bank's engagement. The Bank's program, in MICs-40 percent of those living on less than $2 per depending on the country and its needs, includes both in- day, if one excludes China and countries such as India that vestment lending and adjustment lending, set in the context are eligible for both IBRD and IDA lending, and nearly 80 of a sound program of policy and institutional development percent if these countries are included. Second, many MICs and capacity building, along with strong government com- also have large numbers of people who are vulnerable to eco- mitment.8 Programmatic adjustment lending-a series of nomic shocks or suffer from social exclusion, or include spe- operations under a clearly defined and monitored medium- cific regions or states that are very poor. Third, what happens term framework-could provide an effective vehicle to in middle-income countries also has important effects on support poverty reduction efforts in countries with good low-income countries: for example, middle-income coun- track records and sound and transparent fiduciary and pol- tries can provide important trade opportunities for poor icy frameworks. Finally, a new feature of Bank support for countries, but can also be sources of financial instability, en- MICs is an option for deferred draw-down for policy-based vironmental problems, and communicable diseases-issues loans that will give countries the flexibility to access Bank that the Bank is also committed to address through its support financing if and when needed. 24 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000/2X00 Strengthening the poverty focus of Bank instruments BoX 2.2 Aligning CASs with country strategies: Brazil, The Bank's strategic framework and country business mod- Ghana, Mozambique, Indonesia els are increasingly been reflected in Bank country and sec- Brazil (fiscal year 2000). The CAS from Brazil, a middle- tot strategies, operationa policiesanincome country, is very clear in articulating how the gov- tor strategies, operational policies and gulaance to staff, ernment's program will reduce poverty. It analyzes in analytical work, and other Bank instruments. This section detail the expected impact on the poor of growth strate- and the next look at how such instruments are evolving to gies, reforms to labor legislation, greater access to edu- reflect the stronger focus on poverty and the approach of cation, health services, housing and physical assets, and the World Development Report. improved effectiveness, efficiency, and targeting of social spending. The CAS links government strategies with the Couwtry assistance strategies diagnosis of poverty and expected poverty outcomes. Ghana (fiscal year 2000). Part I of the CAS, which pro- In line with the low- and middle-income business models, vides a detailed account of the country's poverty reduc- Countrv Assistance Strategies-the key document laving out tion strategy, focusing on social sector policies and *, . expenditures, accelerated agricultural growth, improved the Bank's strategy to assist countries through policy advice, infrastructure linkages, the environment, and private sec- analytical work, lending, and other instruments-have tor development, was written by the government and was come to reflect more closely over the last two years coun- a draft of the country's I-PRSP (Ghana is classified as a low- tries own development and poverty reduction strategies, and income country). It also presented monitoring indicators a number of CASs have drawn explicitly on the intellectual and provisional targets for the year 2003 (for example, the framework of the WEDR 200012001 (see box 2.2). proportion of people below the poverty line is expected to fall from 29 to 25 percent in 2003). The rest of the CAS pre- As in past years, the Poverty Group reviewed CASs to sented the Bank's business plan to support the government's assess the degree to which they focused on poverty. Have program. Ghanaian officials were present by videoconfer- CASs improved over time? Using criteria comparable to those ence when the CAS was discussed by the Bank's Board. used to review fiscal 1998/99 CASs, there has been an im- Mozambique(fiscalyear200l).TheMozambique CAS provement.' Fiscal 2000/2001 CASs performed particu- support the poverty reduction strategy of the govern- larly well in the areas of poverty diagnosis and participation. ment, the Action Plan for the Reduction of Absolute They vwere better aligned than in past years with national Poverty, also reflected in the l-PRSP. The Bank strategy cen- poverty reduction strategies, and almost all of the CASs that ters on three pillars: increasing economic opportunity in reflected Interim PRSPs rated satisfactory or better on their ways that will have the maximum impact on reducing overall poverty ratings, suggesting that the PRSP approach poverty even in the %riort term; improving governance and empowerment; and supporting enhancements in human may not only strengthen the poverty focus of national capabilities. strategies but also that of Bank assistance strategies (and pos- sibly their effectiveness). CASs scored less well in the area Indonesia (fiscal year 2001). The Indonesia CAS, which of monitoring and evaluation, was informed by extensive consultations with civil society org ,1n,zat,ons, identifies Indonesia's development priori- ties in line with the WDR's three pillars for poverty reduc- Sector strategies tion: promoting economic opportunity; empowvering the poor; and enhancing the effectiveness of the social safety Just as zountry strategies define Bank/IDA strategy in indi- net. The CAS identifies improvements in governance- vidual countries, based on that country's vision, sector strate- including anti-corruption and decentralization-as both gies ayo thsreyoaprclseothe critical challenge and the key opportunity for Indonesia. gies lay out the strategy for a particular sector, across all The lending program focuses on investment projects that countries. A recent stocktaking exercise found that the sec- will deliver better services to the poor through local gov- tor strategies prepared to date did well in setting the Bank's ernments that have promoted reform and community em- strategy, built on lessons of experience, and incorporated the powerment, thus rewarding those regions that undertake outcome of wide participatory processes. In the last couple pro-poor policies. of years, poverty reduction, broadly intended in line with the international development goals, is taken as the key objec- (see Annex I) and discuss how progress in achieving the goals tive to which each sector strategy contributes, and several can be made. Box 2.3 illustrates how the new thinking recent sector strategies use the WDI framework of opportu- informed the development of the new Environment Sector niry, empowerment, and security as an organizing principle Strategy. OPERATIONALIZING THE WDR 2000/2001 THROUGH BROADER UNDERSTANDING AND SHARPER FOCUS 25 BOX 2.3 Rethinking environmental activities through a poverty lens In the spring of 1999, the Bank began to prepare an envi- imply a shift away from some areas (such as industrial pol- ronmentai strategy Previously, environmental 3ctivities had ution) and toward others (such as environmental tealth two overriding objectives: applying safeguard policies to and natural resource management). minimize n-egative environmental impacts of Bank invest- The corsultatir.n; spurred an in-depth discussion of ments, and helping countries address their most pressing en- poverty-environment 'inkages. which in turn influenced vironrnental problems. In addition, the Global Environmental work progranis and operatioons in sector units. Projects at an Facility gave countries grants to address problems with early stage of design began to place creater focus on ad- global significance. Most projects aimed to protect human dressing problems of major concern to the poor. For exam- health, but not specifically the health of the poor. Many ac- ple, the Armenia Environment Project was redesigned. tivities have lkelIy enefited poor people, often substan- Originally it had focused on the country's most serious en- tially, but since this was seldom the primary objective it was vironmental problems: threatsto biodiversity problems w,-ith rarely documented. the quality of surface water, and areas w, here deforestation At the start, the Bank's Environment Board asked what was linked to soil erosion. The new design emphasized im- would bethe implications for Bank activities of focusing the proving conditrors in areaswherepoor rural people ,i,ed by environmental agenda on reducirg poverty. A background focusincg on poor drinkirig water, unreliable irrigation water study showed thiat environmental conditions contribute sig- and poor quality land. Many of the acti,ities remained the nificantly to each of the dimensions of poverty highlighted same, sLut they swere undertaken in different pas cf the coun- in the WDR 200012001. About 20 percent of illrnes and deat h, try, with a changed emphasis and a new set of monitor ing in poor countries can be attributed to environmental con- indicators. Regions also developed new lines of business; ditionr., with the greatest impacts on the poor. Poor people for example, in both South Asia and Latin American and the depend disproportionately on natural resources for subsis- C aribbear, stronger efforts are underway to address indoor tence, particularly irn rural areas.Arid thie poor are especially air pollution caused by cooking and heating evith dirty fuels vulnerable to natural disasters, including those related to in poorly ventilated houses. The stronger focus on poverty global climate change. is also being translated into new training activities: the The 'backJround paper also analyzed the Bank's envi- World Bank institute has redesigned its training for Bank staff ronmental portfolio and found that many investment pro- and clients, and its prograrns now include new courses on jects did have benefits forthe poor, but that few documented rural poverty and environment, that help clients incorporate those specific berefi`i The paper concluded that most types environmental issues into their PRSPs; on ' Sustainable Strate- of environment projects could be re-desioned to increase ben- gies for Fighting Poverty"; and on poverty-environment efitstopoor peopie, but that a 5trictiy pro-poorfocuswould linkages. In other examples, the Public Sector Strategy focuses on found that past sector strategies did less well in influenc- the key issue of developing effective and accountable insti- ing the CAS process and presenting implications for im- tutions, crucial for enhancing opportunities and empower- plementation, and these areas are the focus of current ment of the poor. The Urban Sector Strategy emphasizes attention. the need to reduce transaction costs for small and informal sector firms, measures to enhance inclusion of all social groups, Operational policies and guidance to staff and accountability, integrity, and transparency in local gov- ernment. The Financial Sector Strategy recognizes the key Operational Policies (OPs) and Bank Procedures (BPs) pro- role of the financial sector in promoting opportunity for poor vide direction to staff on key Bank instruments and oper- people by giving them access to financial services, and in ations. The existing overarching operational policy on strengthening security by reducing the risk of financial Poverty Reduction is being converted to an OP/BP format crises. The Social Protection Strategy aims at operational- to clarify its mandatory aspects and to better align it with izing the recommendations of the "security" section of the the WDR 2000/2001 framework. A sourcebook on em- WDR 2000/2001 through actions that support risk miti- powerment is currently also under preparation. Meanwhile, gation and coping strategies. The Gender Mainstreaming guidance to staff has been provided on the implementation Strategy outlines ways in which the Bank can better integrate of the new low-income country business model, for exam- gender into its work to help create a global environment where ple through guidelines for Joint StaffAssessments of PRSPs gender barriers no longer impede economic growth and and interim guidelines for Poverty Reduction Support poverty reduction, and where men and women have equal Credits (PRSCs). New draft guidelines for public expenditure voice and access to development. The stocktaking exercise reviews are also available. 26 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000,'2001 Improving poverty analysis, monitoring, and evaluation BOX 2A Selected findings of poverty assessments on As in the past, Bank activities continue to support analyt- improving opportunity for poor people The India study (which is broader than a traditional ical work on poverty, povert,v monitoring i countries, and poverty assessment) noted apparent slow progress with evaluation efforts. These activities are acquiring even more poverty reduction in recent years despite high GDP importance in the context of a stronger emphasis on achiev- growth, and found that this could either reflect statisti- ing res alts on the ground in terms of the broad multifac- cal inconsistencies or, more worryingly, the possibility that eted approach to poverty reduction described in the WVDR growth has became less effective in reducing poverty in 2000 2001. the 1990s. The report identified a number of factors that might explain lack of progress in reducing rural poverty: poor infrastructure, inefficient social services, and poorly- Anali tic-al wvork to undlerstand povertq anid targeted poverty programs in the poorer states, as well as clssess e.ipected impacts of policies weaknesses in governance and institutions. The Swaziland assessment found that rapid growth in Much analytical work on poverty has been done over the the past had not benefited large sections of the popula- last twD years, in the form of both poverty assessments tion because of high income inequality, and identified conducted by the Bank in partnership with national au- labor-intensive growth in agriculture as having the potential thorities and other tvpes of analysis. Analytical work in- to teref; tl he poor. The Turkeystudy addressed the prob- creasingly takes a broad view of poverty by incorporating lem of insufficient employment generation, due either to .1 t . . ......... ,,slow economic growth or growth that is not sufficiently the dimensions of voicelessness and vulnerability and look- labor-intensive. The Vietnam report identified job cre- ing at the poverty and social impacts of policies. ation in the rural off-farm sector and in urban areas as key to achieve the goal of halving income poverty by 2015. Pot 'erVl alsse.smeneets. Thirtyv-one poverty assessments Pove.-tV ask .s nienN. Ttiirty-one poverty assessments In Cambodia, progress was made in expanding school- were ecimpleted in fiscal years 2000-2001.1 Several ex- ing and in reconstructing the health system, but poor amined aspects of the opportunity dimension of poverty re- people's access to education and health services remains ductiorl discussed in the WDR 200012001, specifically extremely low. The assessment suggested that the gov- why growth had not been more pro-poor (box 2.4). ernment should support both demand and supply of ser- Other povertv assessments looked at issues related to the vices, for example, through both need-based scholarships security dimension of the WDR 2000 2001 framework, for the poorest students and more schools in poor rural areas. In the Philippines, the government was reasonably and identified weakness in existing arrangements for pro- successful in protecting overall social spending levels dur- tecting the poor and vulnerable (box 2.5). ing the East Asian crisis, but school drop-out rates for The Argentina and Tajikistan assessments innovated poorer households remain high and support is needed to by including not only quantitative but also qualitative promote access of poor students to universities. analysis of poverty, based on studies on the perceptions of the poor. Encouraging the poor to speak out about their ex- perienc2 and needs helps to empower them as active con- assessment, Attacking Brazil's Poverty. The assessment stresses tributors to poverty reduction initiatives, in line with the the insecurity, stigma, and exclusion experienced by inhab-. WVDR 2000/2001 framework. Other interesting examples itants of favelas and highlights poor people's ratings of the po- of combined qualitative and quantitative approaches include lice as the worst local institution and high regard for the a study on the low levels of social capital in Argentina that Catholic Church and community groups. In Vietnam, Voices uses quantitative methods to look at a leading social con- of the Poor influenced the reporn I7etzon:z A4ttawking PTi ortj cern, and work on the upcoming Guatemala poverty as- which was discussed at a round-table meeting with donorn sessmert, where the samples, questionnaires, and analyses in December 1999 and completed in fiscal year 2000. of the quantitative Survev of Living Conditions and the qual- itative Study of Poverty and Exclusion are linked."1 In Oth:er analvticcal work ot povoertj. Formal country Brazil and Vietnam, participatory work done in the first half poverty assessments comprise only a fraction of the analytical of 1999 for the loices of the Poorstudy informed follow- work on poverty undertaken by the Bank alone or with part- up poverty analysis. In Brazil, the study served as an input ners. Other work with a strong poverty focus includes into preparation of the Brazil Country Assistance Strategy cross-country studies, sectoral studies, and informal and re- (CAS), finalized in March 2000, and the draft poverty search activities. Some recent examples of this work-much OPERATIONALIZING THE WDR 2000/2001 THROUGH BROADER UNDERSTANDING AND SHARPER FOCUS 27 BOX 2.5 BOX 2.6 Selected findings of poverty assessments on Poverty and inequality in Europe and Central Asia enhancing security for poor people The report on Making Transition Work for Everyone. The scxial protecliun system in Turk*eyfailstoreachthe Povertyand Inequality in EuropeandCentralAsia (World most vulnerable households, mostly because the system Bank, 200JoJ traces the consequences of the economic is linked to holding a formal sector job. The educational shock resulting from the collapse of the political systerri system also does not provide enough access to the poor- in the formner Soviet Union and Eastern and Central Eu- est, especially with respect to secondary education, and rope. It shows that the increase in poverty and inequality needs to be made more accessible to rural girls. was much larger and mome persistent than had been fore- seen at the beginr-inr of the trarisition period. It provides In Moldova, the pension and social assistance systems a detailed analysis of the nature of poverty in transition were found to be inequitable; reform efforts would thus countries, the factors that have contributed to diverse out- need to focus on improving not just cost-effectiveness comes across the region, and the institutional and policy but also coverage of the poor. issues involved in raising living standards and reducinq social exclusion. Togerner with a companion volume on In Arqeritina, government programs that target the poor corruption in tr3rsition ecorcmies (4nticorruption in Tran- were found to workwell butto have limited coverage: only sition: A Contribution to the Policy Debate, World Bank 25 percent of poor famnlies receive some form of direct 200Od), the report presents a strkorig picture of the ex- public assistance. Higher education spending was found tent to which poor people are hurt by corruption and the to be highly regressive, as most students in public univer- capture of the state by a -ealthy and corrupt elite. sities receive free education regardless of income levels. The report has severai strengths. It updates and sup- plements various studies and reports on poverty done by other nrititutions, and makes a strong effort to present comparable data for all the countries in the region from of which adopts innovative approaches reflecting the WD)R both qUanti(ati'e and qualitative sources. By adopting a 200012001-are given below. regional per.pecti'.e, the study is able to highlight the very Recent cross-country studies include a ground-breaking negative consequences of trarsit ion for large segments of report on poverty and inequality in the ECA transition the population vhere its conclusicns nrirgh! have been sen- economies (see box 2.6), regional studies for Latin America sitive if they had been confined to individual countries. The that focus on issues of poverty, inequality, pro-poor growth, report also takes a careful look at the zdsCatior, and health sectors, which ce;pite their notable achievements and security-Seciuring Otr Futu re in a Global Econ- in the past, are under strain and are increasingly working omy, InfJ}astructure and the Poor, and Social Expen- to the detriment of poor larrlihes and the long-term eco- dituires and the Poor; and regional studies for Africa, nomic mobility of their children. including the report Africani Poverty at the fillennium: The report was also very timely: it made a crucial con- Causes, Complexities anid Challentges and the Poverty tribution to the World Development Report 2000/2001 nncssudycitdin r12 I wh te boad (while at the same time being informed by the thinking pynamnics study citedin chapter 1.1- In limewith thre broad- behind that report), and it was ready in time for the based approach of the WDR 200012001, these studies go Annual Meetings held in Prague in September 2000. In well beyond analyzing the economic causes of poverty to in- addition, it is now serving as a resource for policymakers clude discussion of, for instance, the impact of corruption, and donors in the development of FRv7PJ and donor ways in which power structures perpetuate inequality, and the assistance strategies. role of elites. Sectorally-focused poverty work includes for example an analysis of rural poverty issues in Nicaragua and urban with difficult institutional issues, such as patronage systems, poverty work conducted in Cali, Colombia and Kampala, incentives and capacity to delivery public services; the risks Uganda. Public Expenditure Reviews are increasingly fo- of capture of decentralization reforms by local elites; and cusing on institutional aspects of countries' public expen- actions to enhance transparency and accountability. diture systems, including assessment of the quality and Informal poverty analysis done over the past two years transparency of public expenditure management, and on the at the request of countries includes work in Cambodia, impact of expenditures on the poor. Other important ex- Guinea, Lao PR, Mali, Niger, and Pakistan that is now feed- amples of this kind of cross-cutting Bank work are Insti- ing into the preparation of poverty reduction strategies. The tutional and Governance Reviews, conducted in fiscal years extensive work on poverty done in Uganda over the last few 2000 and 2001 in Argentina, Armenia, Bolivia, Bangladesh, years, partly with Bank support, is an important case in point: the Eastern Caribbean, and Indonesia. These reviews deal new household data, qualitative poverty studies, expenditure 28 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE IDR 2000/2001 tracking surveys, and user surveys done after the most re- the Bank is carrying out poverty and social impact analy- cent formal poverty assessment was completed (in 1993) have sis directly through its analytical and project preparation informed Uganda's national debate on the Poverty Eradi- work. For example, the Poverty Reduction Support Cred- cation Action Plan. its for Uganda and Vietnam incorporate the results of var- Firally, implementation of the PRSP approach has led ious forms of social impact analysis. In Uganda, expenditure to the preparation of a Sourcebook for Poverty Reduction tracking surveys have been used to learn what actual spend- Strategies, designed to support an integrated understand- ing was at the local level and have resulted in changes in ing of key aspects of poverty reduction. The Sourcebook is spending procedures. In Vietnam, a variety of techniques not a "how-to" guide to PRSP preparation, but rather a com- were used to analyze the employment and gender impacts pendiu m of state-of-the-art knowledge on the linkages be- of proposed reforms and design appropriate safety nets. Qual- tween poverty reduction and actions across a range of itative approaches are also increasingly being utilized, for sectoral and cross-cutting issues, including, for example, example in Cameroon, Chad, Madagascar, Pakistan, ancl humar. development, infrastructure provision, rural and Uganda. urban development, gender, governance, and the environ- ment. It also discusses tools for monitoring and evaluation, Strengthening capacity and systems data analysis, and participation in the context of strategies forpoverty ilonitorilng for sustainable poverty reduction. Good analytical work can enhance policy choices with re- Ex-antepoverty and social imtipact analysis. The de- spect to implementing the poverty reduction framework pro-- velopment ofstrategies and of lending operations, especially posed in the WDR 2000/2001. But analysis and action in the case of adjustment lending, should be informed by a needs to be complemented by improvements in systems and careful analysis of the potential impacts of the strategy or op- capacity to monitor poverty outcomes, which are crucial for eration on poverty and social indicators, including the op- the results-oriented approach needed to enhance aid effec- portunity, empowerment, and security dimensions of poverty tiveness, apply the principles of the Comprehensive De- described in WDR 2000/2001.13 In the future, increased and velopment Framework, and effectively implement the PRSI' systematic attention to the distributional impact of policy re- approach in poor countries. The CDF and the PRSP ap-- form and impacts on the broader dimensions of poverty proach put a premium on strengthening capacity in coun- highlighted in the lVDR2000/2001 will be critical. Carry- tries, rather than relying on donor-driven monitoring ing out analyses of the poverty and social impact of policies activities. Thus the challenge is not simply to improve data on different groups systematically poses numerous chal- availability, but to help countries to build their own national lenges, often compounded by capacity and data constraints. capacity for this purpose. More transparent and more eas- Nevertheless, such analyses are important, both to inform ily accessible data will also help empower poor people. choices among policy alternatives and to design appropriate The Bank is supporting the strengthening of poverty mitigation and/or risk management measures in cases where monitoring systems and capacity at the national level and reforms have potential adverse short-term consequences. developing and testing new poverty monitoring tools and Ideally, the analysis of poverty and social impacts should approaches. This is done partly through the regular lend- be part of the development of countrypoverty reduction strate- ing portfolio. As of March 2001, 198 projects were iden- gies, conducted and owned by countries and subject to open tified as having at least one statistical component, in some discuss on through participatory processes. However, signif- instances directly supporting data collection efforts; and sev- icant strengthening of country capacity and improvements eral adjustment operations, for example, in the Indian states in the analytical tools available are required for this to become of Karnataka and Uttar Pradesh, are helping to strengthen the norm. While capacity is being built, the policy changes poverty monitoring systems at the sub-national level. to be analyzed should be selected carefully, starting with those The Bank is also supporting capacity building throug h that, or. the basis of existing knowledge and consultation with partnerships. It is a member of the Partnership in Statistics relevant stakeholders, are expected to have significant impacts. Development in the 21 st Century (PARIS2 1) and adminis- The World Bank and the IMF are working together on the ters the Trust Fund for Statistical Capacity Building. Regional development of adequate methods and tools, and techniques initiatives to strengthen capacity for poverty monitoring are being piloted in several countries. and analysis include the Program for the Improvement of The shift to country-owned analyses of poverty and so- Surveys and the Measurement of Living Conditions cial impacts will be neither quick nor simple. In the short term, (ISLC/MECOVI) in Latin America and the Caribbean OPERATIONALIZING THE WDR 2000/2001 THROUGH BROADER UNDERSTANDING AND SHARPER FOCUS 29 TABLE 2.1 Availability and comparability over time of poverty monitoring data 1995 1998 1999 2000 Share of population covered by ... (%) (N) (%) (%) ... at least one survey with data on consumption and/or income 83 96 97 97 ... comparable data for at least two points in time 45 85 86 86 ... open access to data - 41 46 54 ... at least one Demographic and Health Survey (DHS) 9 26 49 58 Total number of countries 121 124 124 123 Source: World Bank; see Annex H.'s region, jointly sponsored by the Inter-American Develop- Assessing whether results were achieved: ment Bank, the World Bank, and the Economic Commis- evaluation capacity sion for Latin America and the Caribbean."4 The World Bank Institute works with training institutions around Beyond assessing the expected impact of interventions and the world to provide courses in poverty monitoring and monitoring outcomes during implementation, carefully analysis. evaluating the ex-post poverty impact of interventions Reflecting these and other initiatives, country poverty provides an invaluable check on whether the intended re- monitoring systems and capacity are stronger now than they sults were achieved. Various Bank initiatives aim to strengthen were five years ago. The availability and comparability of capacity for evaluation. data on household consumption, incomes, and health has Following a practice established in fiscal year 1998, the improved greatly since 1995. Open access to data remains Bank's Poverty Reduction Group reviews Bank investment relatively limited, but has expanded significantly over the operations each year to check whether they include plans past three years (table 2.1). to conduct impact evaluations. Investment operations need Timely monitoring of poverty reduction strategies poses to be assessed in the context of the overall package of Bank several challenges. First, quick feedback is needed. This re- assistance to a country, rather than in isolation. Neverthe- quires supplementing conventional household surveys, less, where projects test new approaches or where there are which yield in-depth data but with a lag, with monitoring lessons to be learned on what works and what does not, it is tools that gather less in-depth information from house- important to assess project-level impacts. The review of 1998 holds (for example on use of, access to, and satisfaction with and 1999 projects suggested that only a small proportion of serviccs but not on detailed consumption and income) but opcrations-5 pcrcent in fiscal 1998 and 8 percent in fiscal make it available more quickly. Examples of such quick mon- 1999-included all the components required to conduct itoring tools include the Core Welfare Indicators Ques- a thorough poverty impact evaluation (performance in- tionnaire; the user surveys piloted in Uganda to complement dicators, plans for baseline, and follow-up data collection expenditure tracking surveys; and the citizen scorecards from project beneficiaries, a control or comparison group). used in India, the Philippines, and other countries."6 Sim- The fiscal 2000 review, which covered 155 projects ran- ilarly, traditional household surveys need to be comple- domly selected among the 193 investment projects ap- mented by participatory poverty instruments, such as the proved in that fiscal year, showed that there is room for participatory poverty studies carried out in Uganda. improvement. Another challenge is to define appropriate measures The methodologies to be used for impact evaluation of and monitorable indicators for the additional dimensions investment operations are known, and are being dissemi- of poverty identified in WDR 20000/2001-powerlessness, nated through a recently prepared Hanidbook for Prac- voicelessness, and vulnerability. Poverty monitoring sys- titioniers on Evalutating the Impact of Development tems need to include tools that collect data on social cap- Projects on Poverty (Baker, 2000), internal courses for ital, risk and vulnerability, corruption, and accountability staff, and a course for staff and country clients at Carleton of institutions. For example, an extended and enriched University in Ottawa. The key issue now is to ensure that panel survey about to be undertaken in Pakistan will look the right incentives exist in countries and at the Bank to carry at income dynamics and factors governing long-term income out evaluations where needed-client commitment is es- mobility for the measurement of vulnerability. sential. A Monitoring and Evaluation Improvement Program 30 POVERY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000,/2001 was launched last year to tackle capacity and incentive con- to Roll Back Malaria. Finally, the Bank supports the work straints both in countries and within the Bank. The pro- of GAVI on developing vaccines against malaria, TB, and gram includes, first, a phased pilot approach in specific other diseases and delivering vaccines to poor countries.1 countries and sectors aimed at undertaking a diagnostic of monitoring and evaluation systems and, second, identify- Environmental coni7nionis. Environmental degrada- ing from the pilot cases ways in which incentives, ac- tion is another global problem that can have especially ad- countability, and capacity can be fostered across all countries verse effects on poor countries and poor people. Depletioni and sectors. Five countries in three regions were selected for of land and water resources limits opportunity in rural fiscal year 2001 and three more are to be added in fiscal year areas where the majority of the world's poorest people live; 2002. The Bank's Operations Evaluation Department has the urban poor tend to be disproportionately exposed to air also been working since 1 987 with client coLintries to pollution and contaminated water, and hence vulnerable to strengrhen evaluation capacity through the Evaluation environment-related diseases; and natural disasters pose a Capac:ty Development project, and support is currently special threat to the security of the poor. In addition to sup- being provided to seven countries in three regions. 17 porting environmental programs in individual countries, the Bank participates in a number of initiatives designed to ar- Support for global public goods rest the deterioration of the global commons, including ac- tion designed to mitigate long term climate change, ozon. The pr-ceding sections have focused mainly on country-level layer depletion, and degradation or loss of biodiversity, work designed to strengthen the poverty focus of Bank ac- forests, and water and land resources.20 tivitics. But, as briefly noted in the discussion of the new strategic framework and the implications of the approach ljfornzation anid knon ledge. Knowledge is a criti- advocated in the WDR 200012001, country-level action cal public good in an increasingly information-driven global alone cannot guarantee substantial and sustained reductions economy. Broadening poor countries' and people's access in world poverty. It needs to be complemented by global to knowledge is essential for enhancing their opportunity, collective action in priority areas critically linked to bettering promoting their security, and furthering their economic and the lives and prospects of poor people worldwide. A paper social empowerment. At the country level, the Bank is sup- prepared for the April 2001 meeting of the Development porting the development of legal and regulatory environ- Committee identified five such areas for Bank involve- ments that will help to bridge the "digital divide" by ment, based on the principles of selectivity and compara- promoting information technologies and global connectivity. tive advantage, together with relevance for the Bank's Its individual projects increasingly include information sys- povertv reduction mission." Actions underway in each tems components. The Bank is also increasing its support area are described below. for national and regional institutions that can generate in- formationi for informiied debate, including researLh and( Commnunicable diseases. Communicable diseases are training institutions, the media, and organizations of the increasingly becoming a global threat with particularly poor. The World Bank Institute offers a wide range of severe consequences for poor countries and people. Address- training programs for participants from developing coun- ing them through global public action is directly related to tries, including a new program (named "Attacking Poverty") the security and opportunity pillars of the PZDR 2000/2001. addressed in particular to poor countries and covering kev IDA is therefore working with others on efforts to combat aspects of poverty reduction strategies and programs. To fos- HIV/AIDS, for example through the Multi-Country AIDS ter global knowledge, the Bank supports initiatives and Program for Africa, jointly prepared with UNAIDS and the networks such as World Links for Development, the Global International Partnership against AIDS, and it is working Distance Learning Network, the Africa Virtual University; with partners to develop a similar approach with several the Global Development Network, and the Consultative Caribbean nations (see box 2.7 for examples of the impact of Group for International Agricultural Research. It also successful HIV/AIDS projects). The Bank is also supporting supports the Global Development Gateway, an initiative the AIDS-related work of the Global Initiative for Vaccines designed to foster the use of information and comm anica- and Immunization (GAVI) and the International AIDS tions technology in the fight against poverty. The Informa- Vaccine Initiative. It is working with partners on tubercu- tion Development Program (infoDev) supports the start-up losis control, through the WHO-recommended DOTS con- costs of Country Gateways, locally owned and operated trol strategy, and on malaria, through the Global Partnership partners of the Global Development Gateway. OPERATIONALIZING THE 11 DR 200012001 THROUGH BROADER UNDERSTANDING AND SHARPER FOCUS 31 BOX 2.7 Fighting HIlVAIDS effectively in Brazil, Chad, India In the early 1990s, Brazil ranked fourth in the world in Knowledge about modern contraception methods, the terms of reported AIDS cases. The $160 million AIDS and Sex- existence of AIDS, and how the HIV virus spreads is steadily ually Transmitted Diseases (STD) Control Project, approved growing, More than 300,000 condoms are now sold every in 1993, focused on prevention efforts, but also covered treat- month, about 15 percent more tharn epe,:ted at the outset. ment and testing. The project helped 175 nongovernmen- tal organizations carry out grassroots campaigns to reach With the highest number of iIV ZAiDS cases in the world, high-risk groups, such as injecting drug users and sex work- India faces a major epidemic. The country still has a small ers. The IGOs handed out more than 180 million condoms, window of opport i n ty to stem the epidemic and keep the raised AIDS awareness among more than 500,000 people, prevalence of HIV below 5 percent of the adult population. and trained 3,800 teachers and 32,500 students in AtDS and If it fails, the AIDS situation in India could become like that drug abuse prevention. A second project approved in 1998 in many of the worst affected African countries. India's fight has helped to set up a r,ti-o,nide network of 141 AIDS test- against HIV began in earnest in 1992, with support from ing and counseling centers and supports 145 specialized AIDS the IDA-financed National AIDS Project. The project set up care units as well as 66 hospital-based care units and 50 AIDS control offices, and helped establish an Information, home-care teams. In partnership with the National Business Education, and Communication program, exploiting media AIDS Council, the Bank's support has enabled 3,000 com- and traditional communications channels such as folk music, panies to provide AIDS awareness training to 3.5 million work- festivals, awareness campaigns, and elephant parades to ers. The program has contributed to a 38 percent drop in highlight the risks of HIV/AIDS. The project has contributed the number of AIDS-related deaths since 1993. to important achievements in the battle against HIV. Public knowledge of HIV has increased from 54 percent of the pop- Chad's women can be counted among the world's most ,iaic,r,n to 80 percent in cities, and from 13 percent to 64 vulnerable: about a third have no schooling, 80 percent percent in the coujr,rr1y:ide Use of condoms in some targeted rnarrywhile in theirteens, more than half have had theirfirst high-risk groups has increased from 10 percentto between child before turning 18. At 1 percent, the use of modern con- 50 and 90 percent. Nationwide, condom distribution through traception is virtually non-existent. Only 1 in 4 Chadian social marketing has grown by 50 percent. Considerable women enijoy trained assistance while giving birth. The result: progress has been made in cleaning up the blood supply. rmaternal mortality in Chad, estimated at 827 per 100,000 The states of Maharasthra, Thnmil Na,Ju, and WestBengal have live births, ranks among the highest in the world. The IDA recorded some special successes in their HIV programs, but Population and AIDS Control project, approved in 1995, has other states have not yet developed effecti',e HIV responses. trained more than 40 local NGOs to carry out population and A Second National AIDS Control Project, approved in June HIV/AIDS prevention 'nitiati,es at the community level. 1999, is helping to address this challenge. T-cade and integrationi. As the WDR 2000/2001 fund for Integrated Framework activities has recently been points out, trade can be a powerful engine for growth and established with support from bilateral donors. poverty reduction, and poor countries that are more inte- grated with international markets have grown as fast or faster Internationalfinancial architectuire. A strong in- than rich countries. Over the past two decades, however, ternational architecture that can help prevent and manage the world's poorest countries have seen their share ofworld financial crises is a global public good that benefits all trade decline. The Bank is working at the multilateral, re- countries and peoples, including the poorest, who have fewer gional, and national levels to support trade integration as resources to fall back on when crises strike. In addition to a global public good that benefits all participants, includ- relevant aspects of its lending activities, the Bank is work- ing the poorest. It has launched an International Task Force ing to help promote financial stability through the Finan- on Commodity Risk Management in Developing Countries cial Sector Assessment Program, an initiative designed to to help commodity-dependent exporters mitigate and han- alert countries to potential vulnerabilities in their financial dle the risks of commodity price volatility. And specifically sectors, and to help with the design of appropriate assistance. with respect to the poorest countries, the Bank is partici- Assessments undertaken under the Program usually form pating, along with other multilateral agencies, in a revital- the basis for Bank and IMF work on financial sector stan- ized Integrated Framework for the Least Developed dards under the Reports on Standards and Codes initiative. Countries. This initiative is designed to help poor countries Dealing with problems associated with debt and debt man- to design trade reform packages that both promote growth agement is of special importance for avoiding financial and protect the poor during the reform transition. A trust crises, especially in the poorest countries. To this end, the 32 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000/2001 Bank wvill continue to support international debt relief Discussion of Country Assistance Strategies," May 22, 2000, provided under the enhanced Heavily Indebted Poor Coun- R99-228/2, Box 5. tries (HIPC) initiative. In addition, the Bank's Executive 10. These are poverty assessments or updates for Albania, Directors have recently approved guidelines on sovereign Argentina, Bolivia, Cambodia, Chile, China, Croatia, the Dominican debt management, designed to help countries consider re- Republic, Ethiopia, Georgia, Honduras, Hungary, Kyrgyz, India, forms to strengthen the quality of public debt management Indonesia, Jordan, Larvia, Mexico, Moldova, Morocco, Nicaragua, and reduce vulnerability to financial shocks. An option for Philippines, the Slovak Republic, Sri Lanka, Swaziland, Tajikistan, countercyclical and contingent lending, the deferred draw- Turkey, Uruguay, Venezuela, Vietnam, and the West Bank and Gaza. down facility to support middle-income countries that may 11. On Argentina, see World Bank, "Together We Stand, Di- temporarily lose access to private financial capital during vided We Fall: Levels and Determinants of Social Capital in a time of crisis, was approved by the Board in October 2001. Argentina." Latin America and Caribbean Region, April 2001 draft. 12. Both studies are joint efforts of the World Bank and the Strategic Partnership with Africa. Notes 13. See, for example, the Operational Memorandum "Clar-- ification of Current Bank Policy on Adjustment Lending." June 1. See World Bank (1998), Assessing Aid: lhat Works, 5, 2000. What Doesn 't, ancl Why, Policy Research Report, New York, 14. Countries covered by the project are currently Argentina, Oxford University Press, and World Bank (2001), A id atncd Re- Bolivia, El Salvador, Guatemala, Nicaragua, Paraguay, and Peru, form in Africa, Washington, D.C. Other countries that have expressed interest in participating in the 2. I'aul Collier and David Dollar (2000), "Aid Allocation project include Costa Rica, the Dominican Republic, Ecuador, and Po'rerty Reduction," World Bank, Development Research Guyana, Haiti, Honduras, Panama, and Venezuela. Group, Washington, D.C. 15. See also the Poverty Monitoring Database on the Poverty- 3. World Bank (2000), W\orldl Development Report Net web site at www.worldbank.org/poverty/data/povmon.htm; 2000/2001: Attackiing Povlerty, New York, N.Y, Oxford Uni- the LSMS web site at www.worldbank.org/lsms/; the Household versity Press (wwvw.worldbank.org/poverty/wdrpoverty/report/). Expenditure and Income Data for Transitional Economies site ar 4. Complementing shifts in the Bank Group's Strategic Frame- wwwv.worldbank.org/research/transition/house.htm; and the work Paper, the recent IFC Strategic Directions Paper emphasizes Demographic and Health Surveys site at www.macro.org. a shift toward low-income countries and activities which have a 16. For more information on the CWIQ, see www4. potentially large poverty impact (such as small and medium en- worldbank.org/afr/stats/cwviq.cfm. For more information on user terprises), and increased emphasis on sustainability issues. In ad- surveys and expenditure tracking surveys, see http:/,www. dressing the challenge of improving the investment climate, the worldbank.org/research/projects/publicspending/tools/tools.htm. Bank Group, including IFC and MIGA, is increasingly coordi- 17. See in,.- .,.,rldbank.orglhtnl/oecl/evalu(ationv nating its actions and approaches. Recent organizational changes html/monitoring-and_er aluation.capa.htnl. (such as the formation of a joint Small and Medium Enterprises 18. Poverty Redcuction7 andl Global Puiblic Goocds: A department in March 2000) also enhance this coordination. Progress Report, DC2001-0007, April 13, 2001. 5. _Supporting Cotunltry Development: World Balik? Role 19. The first such delivery of vaccines against diphtheria. anzd Instnrments in Low- and Middle-Incomne Countries, tetanus, whooping cough, and hepatitis B was made to Mozam- DC2000-19, September 8, 2000. bique in April 2001. 6. Fighting Poverty antc Strengtheniing Growth in Low- 20. The Bank is the implementing agency for two global Income Couintries, DC2001-001, April 18, 2001. financing mechanisms for addressing environmental issues-the 7. Sucpportinig CountryDevelopinent: Strengthenineg the Global Environment Facility and the Multilateral Fund for the WVorlcl Ban1k Grouip's Support for .M1iddle-Income Cowl- Montreal Protocol. Other Bank-supported global environmental tries, DC2001-0005, April 10, 2001. initiatives include the Prototype Carbon Fund, a public-private 8. Special attention or support may be required for the poor- trust fund designed to purchase greenhouse gas emission reduc- est states or provinces in large federal middle-income countries. tions in developing and transition economies; the global con- 9. For details on the 1998/99 ratings see World Bank (2000), vention on Plersistent Organic Plollutants; the Nile Basin Initiative, Poverty Reducttioni ancd the World Bank: Progress in Fiscal which promotes trans-boundary cooperation among riparian Year 1999, Washington, D.C. (www.worldbank.org/poverty/ countries; the International Commission on Dams, and the Crit- libraryl progr/1999/); Country Assistance Strategies: Retro- ical Ecosystems Partnership Fund, which focuses on biodiversity spectiv'e and Implications; and the Note on "Enhancing Board "hot spots" in highly threatened regions. CEAPER 3 Orienting Bank Operations to Support Opportunity, Empowerment, and Security Chapter 2 described how the Bank's strategic framework, centrality of measures to enhance growth in national poverty business models, operational instruments, analytical work, reduction efforts. But, as also noted in the WDR and in and support for global public goods are increasingly fo- chapter 1, the impact of growth on poverty reduction is cused on achieving greater results in terms of the ex- reduced if income inequality is high. Therefore, increased panded approach to poverty reduction described in the attention is being placed on how the benefits of growth are WDR 2000/2001. The Bank's strategic framework and distributed and on identifying and supporting actions that country business model outlined above-founded on generate pro-poor growth. Institutional and governance country-owned vision, sound, context-specific diagnosis characteristics specific to each country affect both the pace of the policies proposed, a Bank program in support of the of growth and the distribution of its benefits, and need to vision and informed by the diagnosis, and a focus on be taken into account. results-are the cornerstones of the Bank's operationaliza- tion of the WDR 2000/2001 agenda. This chapter dis- Growth, institutions, and distributtion cusses how Bank operations are helping countries to address the three substantive elements of poverty reduc- Promnotinig growtb. Supporting broad-based growth tion outlined by the WDR 2000/2001-increasing op- that benefits the poor and that increases returns to the assets portunity; enhancing empowerment; and strengthening of the poor is a major focus of the Bank's engagement with security-within the context of the strategic framework its client countries. In fact, one of the two key priorities for and business model. fighting poverty outlined in the Bank's Strategic Framework As discussed earlier in this report and in the WDR, there Paper is building the climate for investments, jobs, and sus- are significant complementarities in the actions needed to tainable growth (see chapter 2). Several other strategic doc- support opportunity, empowerment, and security. Hence, uments lay out directions for Bank action. while the chapter is organized in sections on these three The Bank Group's Private Sector Development Strat- dimensions/areas of action, it should be recognized that egy, scheduled for completion in fiscal year 2002, lays out actions in one area often address more than one dimension a framework to improve the investment climate. This in- of poverty and are closely linked to actions in other areas. cludes support for deregulation and competition; for well- functioning legal, judicial, and regulatory institutions; and Opportunity for privatization, concessioning, and contracting out under appropriate circumstances. Also important are clarifying and The WDR 2000/2001 and the analysis of poverty trends strengthening property rights and corporate governance presented in chapter 1 make it clear that an effective attack regimes; building institutions for private sector development; on poverty depends critically on the rate of economic for example, investment promotion agencies or public- growth in poor countries. Without growth, the additional private consultative mechanisms and adequate provision of jobs and better availability of services needed to lift poor key infrastructure (transport, water, energy), which is essential people out of poverty-from health and education to water for private sector development. Well functioning financial supply and rural roads-will not materialize. The view markets are also critical for promoting growth and oppor- that growth is critical for the success of poverty reduction tunity. In addition to the strengthening of legal and judi- strategies is widely shared: all the I-PRSPs and PRSPs cial systems mentioned above, creating and maintaining an that have been completed to date have emphasized the effective financial sector involves putting in place appropriate 33 34 POV'ERTY REDUCT'ION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THI WDR 2000 200 accounting practices, regulation and supervision; strength- undertaken for 36 countries in fiscal years 2000-2001; ening banking systems; increasing the diversity of financial 25 more are scheduled for fiscal 2002. Finally, the Irstitu- systems: and developing capital markets. Finally, as the tional and Governance Reviews mentioned in chapter 2 WODR 2000,/2001 points out, capitalizing on the benefits are also being used to diagnose the investment climate in of trade is a potent driver of growth, jobs and incomes for countries. poor cc untries and people. Bank support for increasing ac- cess to rnternational markets needs to be complemented by 11(ayigm ,floealt to,itio,i to thbe H /'.', ',,,' ClS/90Ct5 "behind the border," country-level actions that enhance the ofp,rowh. Growth can improve the distribution of incomes. linkage between the poor and overseas markets-for ex- but it can also be distribution-neutral or actually increasc ample, in the context of the Bank-assisted Integrated Frame- inequality, and thus retard poverty reduction efforts. Sup- work for the Least Developed Countries (chapter 2) porting growth paths that do not increase inequality also Experience has shown that a healthy rural economy is matters from a purely growth-oriented perspective, becausc critically important for overall growth in the poorest coun- increasing inequality can adversely affect the growth process tries, and that growth in rural areas disproportionately ben- itself and its sustainability. Hence the distributional impli- efits the poor in these countries, as the majority of them lives cations of alternative options for accelerating growth and in rura areas. The Bank is currently preparing a rural de- the policy reforms associated with them need to be taken velopment strategy that focuses particularly on increasing into account. In addition to avoiding possible inequities as- agriculrural growth and competitiveness and on enhancing sociatecl with growth, the Bank is putting new emphasis on rural non-agricultural, off-farm, and private sector eco- policies for pro-poor growth that can specifically increasc nomic ictivity in rural areas. economic opportunities for poor people. Work is underway on clarifying the conceptual issues related to the meaninu U7 '1Cen1ta)116li)g comItIrl' alnd illstitiltionllCl Con- of pro-p)oor growth. Understanding these issues, and going textS. During the past decade and based on both success- beyond income distribution as the only measure of distri- ful and unsuccessful experience, the development bution, is critical for choosing between alternative policy community, including the Bank, has placed increasing options, improving their social sustainabilitv, and design- weight on the importance of country-specific governance ing compensatory mechanisms as required. and institutional factors as determinants of effective poli- The Bank is actively conducting and supporting work cies, including policies for enhancing economic growth. In to assess the poverty and social impact of policies through particu ar, actions to improve the investment climate require both analytical work and project preparation, as discussed an understanding of country and institutional constraints in chapter 2. The need to conduct analyses of poverw and to inves-ment. The Bank continues to work with countries social impacts is being reflected in revised guidelines. Mean- to overcome these constraints. while, work is ongoing on developing a guidance manual The WDR 2002, entitled I,istifllti7los /Cl1kets, fo- covering conceptual issues and a toolkit of best practice for cuses on this issue (see box 3. 1). The Bank Group's Foreign assessing the poverty and socials impact of public action that Investmeint Advisory Service (FIAS) has advised some 120 will integrate quantitative and qualitative approaches. The governments on how to improve the investment climate for toolkit will include analytical tools that link macroeco- foreign and domestic firms. The Bank is also helping to de- nonic modeling approaches with mnicroeconomic house- velop a standard methodology to evaluate the investment hold survey information; incidence analysis to look at the climate, that includes a standardized survey instrument impact of public expenditure and revenue policies; new tech- which will allow for benchmarking and cross-country com- niques and methods that focus on1 the efficacy and respon- parisons. This instrument is also capable of assessing the in- siveness of public service delivery to the poor; and qualitative vestment climate for micro-enterprises and rural enterprises. tools. Some of these techniques are already being imple- Relatecly, the Bank is undertaking country mapping exer- mented, in collaboration with local counterparts, in several cises to assess the policy and institutional environment for countries. small and medium enterprises in individual countries. As Additionally, research is underway at the Bank to en- noted in chapter 2, the Financial Sector Assessment Program, hance the understanding of the socio-economic, institutional. operated jointly with the IMF, provides countries with an and community-level factors that explain why the poor analysis of strengths, potential weaknesses, and key devel- benefit more or less from growth in different instances and opmental issues in their financial sectors; assessments were on the relationship between poverty and inequality. ORIENTING BANK OPERATIONS TO SUPPORT OPPORTUNITY, EMPOWERMENT, AND SECURITY 35 Box 3.1 The WDR 2002: Institutions for Markets The WDR 2002 starts from the proposition in the WDR for poor people (who, for example often suffer differ- 20012001 that income from participation in markets is the entially from lack of effective property rights, and who key to boosting economic growth for nations and reducing are particularly hard hit by corruption); poverty for individuals, It provides a rich and nuanced dis- * Regulatory systems need to be simple and not burden- cussion of the role of institutions-defined as rules, en- some, but paradoxically, poor countries tend to have forcement mechanisms, and organizations-in supporting more complex (and often corruption-creating) regula- the development of markets. It provides a framework for tions (even those governing, e.g., an activity as basic as understanding what institutions do that applies across debt collection) than rich ones-and poor people may the range of market supporting institutions. Institutions have special difficulty in negotiating these complexities; channel information about market conditions, goods and * Informal institutions tend to be more important than participation; they define and enforce property rights, deter- formal ones in poor countries, and for poor people, who mining who gets what and when; and they increase (or de- are often not well served by the limited formal institutions crease) competition in markets. The report codifies experience available. While there are also limitations on the effec- from around the world into four rnain lessons about how to tiveness of informal institutions, they can do much to re- ensure effective institutions for markets: (1) design institu- solve information and enforcement problems at the tions that complementwhat already exists, recognizing that community and country level. country context is critical, and existing features of this con- Issues relevant to poverty reduction are raised throughout text will determine the impact of a given institution; (2) in- the WDR in contexts ranging from financial systems through novateand experimenttoseewhatworks, again recognizing the judicial system to the role of the media. The report also that 'one size fits all" approaches are inappropriate-even addresses in depth particular topics of special relevance to in countries with similar income levels and capacities-but poverty reduction. The chapter on "Farmers" is a case in at the same time recognize the costs of experimentation and point, since the majority of the world's poorest stilt live and be ready to drop failing experiments; (3) connect commu- work in rural areas. The chapter considers institutions for mar- nities of market players -hrough open information flows and kets in this context under three main areas of focus: build- trade, which in turn creates demand for effective market- ing more secure and transferable rural land institutions; supporting institutions and supplies ideas for beneficial in- building effective and accessible rural financial r,si L.,iori, stitutional change from outside a given community; and and building effective institutions for agricultural technol- (4) promote competition among jurisdictions, firms, and in- ogy and innovation. It concludes that institutional change dividuals, which helps modify existing institutions, changes in these areas can reduce poverty by encouraging farmers incentives and behavior, and promotes demand for new to undertake high return activities and investments, in turn institutions by highlighting successful ones. leading to a more productive agriculture that can also boost While the WDR 2002 necessarily paints on a very broad overall growth. The chapter on "Regulation of Infrastruc- canvas, it has important things to say with respect to insti- ture" contains a special section on "Designing regulation tutions for markets in the context of attacking poverty. to deliver services to poor people," which outlines five ways Some examples: to promote distributional objectives-setting relevant in- * Well designed market-supporting institutions help the poor vestment targets in the context of privatization or conces- not only by influencing overai growth but also by en- sioning; maintaining flexibility with respect to tradeoffs hancing poor people's market access, and enabling them between tariffs and service parameters; liberalizing entry for to make the best use of their assets; small-scale or innovative providers serving communities not * The rule of law, broadly defined (including establishment reached by conventional organizations; expanded dialogue/ and enforcement of property rights, effective legal in- exchange of information with a more diverse range of stitutions, and a low incidence of corruption) matters stakeholders (including poor communities); and enhancing critically-again, not only for overall gro:.ih and the the affordability of services through appropriately designed qua itJy of the investment climate, and but also specifically subsidies. Making markets work to stimiulate pro-poor growth the micro level, specifically among poor people and micro- enterprises, in addition to market-wide reforms. This is a Beyond the need for overall economic growth, the WDR rich and challenging agenda on which the Bank will con- 200012001 emphasizes the need to make markets work bet- tinue to engage. ter for poor people, by addressing the specific constraints that keep poor people from accessing opportunities and as- Regulatory anld legal reforin. EffEors Lo illcrease sets through markets. The challenge is to focus on an agenda competition in most markets-by permitting easier entry of "liberalization from below" that addresses constraints at and exit-can lower transactions costs and purchase prices 36 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000/2001 in markets where the poor are consumers (e.g., food, water, and transport) and provide opportunities for poor people BOX 3.2 in markets where they are sellers (e.g., of labor or services), Creating opportunities through micro-finance either through employment or micro-enterprises. Improv- in Bosnia and Herzegovina ing the functioning of domestic markets will also help the In December 1996 the government of Bosnia and p be fmb their Herzegovina and IDA established the Local Initiatives poor beeirmitentoa akeso o(Micro-finance) Project to develop micro-finance institu- products and their purchases. Furthermore, clarification tions to lend money and offer other business-related ser- of property rights, particularly with regard to assets the vices to low-income entrepreneurs. The results have been poor use-such as land and other natural resources-is remarkable: as of February 2001, nearly 74,000 loans had crucial to enable them to benefit from the returns to these been disbursed to micro-entrepreneurs across Bosnia and assets as well as to enhance access to complementary re- Herzegovina, creating or sustaining about 100,000 jobs. Women make up nearly half of all borrowers, and a sources, such as credit. The forthcoming private sector and quarter of the loans have been made to displaced persons rural development strategies will address these issues. Legal or returning refugees. An impressive repayment rate of and jud,cial reforms that strengthen systems for enforcement about 98.5 percent has been maintained from the pro- of property rights and contracts, together with arbitration ject's beginning in April 1997. Establishing branch networks systems accessible to the poor, are essential parts of this that build linkages across ethnic boundaries in Bosnia agenda.. whichtheBanksupportsand Herzegovina, NGO Microcredit organizations have proven that they can develop into viable micro-finance in- stitutions. Based on this success, IDA is planning a follow- Improving poorpeoples access tofinancial mar- up project. kets and business services. The Bank Group is focusing on improving the investment climate for micro, small, and medium enterprises and on developing markets for associ- Improving infrastructure for the poor. Infrastruc- ated business development services. There is scope for ture services-notably transport and energy-can enhance building markets for such services by stimulating demaind opportunities for poor people by promoting their access to (by provision of information or direct incentives such as markets, in addition to helping to generate national and re- matching grants and vouchers), strengthening the capacity gional growth. The Bank is working both to improve tar- of service providers, and introducing new products and geting of infrastructure to the poor and to develop service delivery mechanisms. For example, in a number of mechanisms for low-cost and sustainable delivery of services. countries the Bank is supporting matching grant schemes In Buenos Aires, a water project uses geographic targeting that cover part of the cost of advisory services. of tariffs to explicitly subsidize poor users. Poverty mapping Micro-finance is of special importance to poor people is now being used to improve targeting of infrastructure in- and enterprises. The Bank approved more than 70 projects vestment to the poor, for example in Panama. Participatory with micro-finance components in the 1990s (see for ex- and community-driven approaches have also been useful in ample, box 3.2), initiated a worldwide analytical effort, targeting infrastructure investment to rural areas. The Bank Sustainable Banking for the Poor, and provided the secre- is also examining how privatization of infrastructure could tariat for the Consultative Group to Assist the Poorest be made to work for the poor, as exemplified in the Latin (CGAP), a consortium of donor agencies that supports America and Caribbean regional study on Infrastructure and micro-finance through technical assistance. The focus is in- the Poor, mentioned in chapter 2. creasingly on building the financial and institutional sus- tainability of micro-finance institutions and supporting Butilding the human capital of the poor policy change rather than directly subsidizing them.2 There is also scope for supporting innovations, such as credit Human capital is one of the most important assets of the scoring. computerization, ATMs, and smart cards, that can poor. Inadequate human capital investment perpetuates reduce transaction costs and information asymmetries in con- income poverty and degrades human well-being. The Bank's necting smaller entrepreneurs and the poor to financial approach to investing in human capital for the poor is markets.3 For very poor communities and remote areas be- placing increasing emphasis on complementing public fi-- yond the reach of existing micro-finance institutions, an in- nancing with policies and delivery systems that promote syn- creasingly common approach is to support income ergies between the public and private sectors and increase generating activities in a way that builds the ability of com- the accountability and responsiveness of service delivery to munities to recover and manage their funds. the poor with tangible results. ORIENTING BANK OPERATIONS TO SUPPORT OPPORTUNITY, EMPOWERMENT, AND SECURITY 37 Investing in health, education, water, and saniita- In other cases, this means supporting better service deliv- tion. The Bank is committed to improving education, health, ery through decentralization and Community-Driven De- and access to water in line with the international development velopment (CDD), tracking of expenditures, citizen goals. In the area of health, support for reductions in infant, monitoring, and measures to enhance accountability. Di- child and maternal mortality will continue, along with efforts agnostic work is being stepped up to determine the extent to help countries to enhance the performance of health care to which health and education services fail to reach the poor systems and to secure sustainable health care financing. In in specific country contexts. addition, as discussed at the end of chapter 2, the Bank is stepping up its support for the development of vaccines and treatment for AIDS, malaria, and tuberculosis. Empowerment In education, the Bank will continue to focus on sup- porting expanded access to basic education, notably for girls Empowerment is the substantive area of the WDR and the poorest; early child development and school health; 2000/2001 agenda that poses the biggest challenge for innovative delivery and systemic reforms in areas such as stan- the Bank. As this section shows, this is not a new area for dards, curriculum, and achievement assessment; and gov- the Bank Group, but pursuing it more consistently means ernance and decentralization, with an increasing focus on changing how it operates in many sectors. In order to frame school quality. In addition to supporting supply improve- the Bank's engagement in this area and to provide practi- ments, the Bank has increasingly recognized the importance cal direction to staff, a sourcebook for World Bank staff on of tackling demand constraints. In Bangladesh, for exam- empowerment is under preparation. The sourcebook will ple, the Bank and government have set up the Female Sec- clarify concepts, identify which aspects of empowerment fall ondary School Assistance Project, designed to increase the within the Bank's mandate and comparative advantage, number of girls enrolled in secondary school and help them outline key areas for support, and point to good practice. to pass their certificate examination in order to get a job. As currently envisaged, support will focus on (i) increasing Key interventions to improve human development out- participation and inclusion; (ii) strengthening local orga- comes can lie outside the social sectors. In targeting poverty nizational capacity; (iii) enhancing accountability and en- objectives, the Bank is therefore also supporting improve- forcement; and (iv) increasing access to information. ments in environmental conditions and safe water and san- itation, particularly as they affect poor people. The Armenia Increasing incluzsion and participation Environment Project referred to in box 2.3 (chapter 2) is one example of how sectoral interventions are being designed Inclusion and participation in Bank operations. to address pressing poverty issues. Research is underway to The Bank is increasingly using participatory processes in its better understand the synergies and complementarities of operations, both at the project and program levels. A recent interventions in different sectors in the effort to reach the review by the Operations Evaluation Department (OED) international development goals. concluded that substantial progress has been made in in- Support to the social sectors has also taken the form of corporating participatory processes in Bank-financed pro- sectoral programs and budgetary support for increased al- jects and in CAS preparation. When done well, participatory locations to priority spending areas. Reforms in the social approaches have led to improvements in project design, own- sectors and increased spending on social services have gen- ership, community contributions, accountability and trans- erally been among the top priorities set out by national au- parency in contracting and procurement, gender relations, thorities in their I-PRSPs and PRSPs, and this is being collaboration between government and communities, and reflected in the design of Bank CASs. sustainability, as well as in reduction of conflict and social exclusion. Participatory CAS preparation has improved Improving the delivery and responsiveness ofser- local ownership and relevance. vices to the poor. As already noted, and in line with the But there are also areas for improvement. The costs of WDR 2000/01, the Bank is paying increasing attention to participation for all stakeholders-including communities, improving the actual delivery of services to the poor. In some the government, and the Bank Group-are significant. cases, this involves exploring ways in which public-private More generally, there are significant risks associated with partnerships can be eftectively used to deliver services in a the empowerment agenda, including the potential for cap- cheaper and more responsive way-an issue addressed in ture by national elites; the complexities of bridging cultural detail in the forthcoming private sector development strategy. and ethnic divides in heterogeneous societies; and all too often 38 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OI'ERATIONALIZING THE 1DR 2000/2001 the realities of conflict. The evolving PRSP experience programs build on the lessons of earlier successful projects with broad-based participatory processes for strategy for- (see box 3.5). mulation and monitoring and evaluation of results should As the Bank proceeds with the CDD approach. it wilI provide valuable insights on participation at the macro level. be important to closely monitor and evaluate progress andi The Social Development Strategy Paper planned for fis- results. For example, the monitoring and evaluation coM- cal yea,- 2003 is expected to update the participation strat- ponents of the District Povertv Initiative Project in India egy (including any resource implications). are geared towards evaluating how effective different mod- els of community devolution are in delivering community Stre) igiben intf local orgaiiizationial capacity infrastructure, improving the quality of social services through enhanced accountability, and increasing income gen- ComunhflllDitl-DPiL DlOevlopmeoVt (CDD) and decen7- erating opportunities for poor people. More generally, it wiJl traliz"raion. CDD is an important instrument for opera- be important carefully to monitor and evaluate the ncw ap- tionaliz7lng the empowerment pillar of the WDR 200012001. proaches involved in CDD including the potential risLs. For It builds on social capital by harnessing community par- example, CDD needs to be truly inclusive and avoid insti- ticipatiDn; it also improves social capital by strengthening tutional capture by traditional elites, and the extra time an(d incentives for participatory development (see box 3.3). costs that may be needed for good CDI) should be clearl y In iddition, CDD can play a crucial role in building ca- identified and taken into account when valuing outcomes. pacitv ;tr the local and community level (see box 3.4). New Other aspects to be considered include coordination between commitments of approximately 51.5 billion in fiscal year CDD and sector reform efforts. country ownership at the 2001 and an anticipated $2.0 billion in fiscal year 2002 will national level of CDD approaches; adequate safeguard and finance programs driven bv communitv groups, in a variety fiduciary arrangements, and leverage of local and private fi- of sectors in both urban and rural settings. Todav's CDD nancing to ensure sustainabilitv. BOX 3.3 Operationalizing empowerment through Community-Driven Development Poor people are often viewed as the target of poverty re- them in decentralized decision-making, with a reduced role duction efforts. Community-driven development, in con- for public agencies. Funds are channeled directly to commu- trast, treats poor people and their institutions as assets and nity groups, which manage and are accountable for invest- partners with whom to work. CDD empowers poor people ments. It is estimated that 93 percent of program resources to create opportunities for themselves. It gives control over now reach communities, compared with 40 percent under the decisions and resources to community groups. The CDD previous rural development programs and 20 percent under approach brings together and addresses the four key areas the first integrated rural development programs. Under the of interventions to further empowerment discussed in the Zambia Social Recovery Program, IDA financing supports the text. f implemented well, CDD can enhance inclusion and provision of matching grants directly to urban and rural com- participation; strengthen accountable and inclusive com- munity groups. Communities choose from a menu of eligible muni-y groups; facilitate community access to information, social and economic infrastructure interventions. Impact eval- increasingly through information technoiogy; and strengthen uations of early interventions found that grant-financed local organizational capacity by forging functional links be- schools and health centers performed better than similar in- tween community groups and formal institutions-especially strtutions whose financing did not involve communities. Teach- local governments-and by creating an enabling environment ers and health workers attended more regularly; the physical through appropriate policy and institutional reform, often in- infrastructure was better; more members of the community cluding decentralization reform. used the facilities, and they were more likely to pay school fees The CDD approach is used to provide local social and in- and organize health center maintenance committees. frastructure services such as basic education and water sup- Studies have confirmed the potential of CDD to make ply, to organize cooperative economic enterprises and natural poverty reduction efforts more demand responsive, more in- resource management, to organize citizens to enhance ac- clusive, more sustainable, and more cost effective than tra- countability of governance mechanisms, to strengthen social ditional centrally led programs. CDD can fill a critical gap in networks, and to enhance security among the poorest.4 For poverty reduction efforts, achieving immediate and lasting example, the North-East Brazil Rural Poverty Alleviation Pro- results at the grassroots level and complementing market gram was reformulated from a centrally administered, inte- economy and state-run programs. However, CDD interven- grated rural development program into a community-driven tions need to be designed carefully to avoid capture of ben- program that targets the poorest communities and involves efits by elites. ORIENTING BANK OPERATIONS TO SUPPORT OPPORTUNITY, EMPOWERMENT, AND SECURITY 39 BOX 3A BOX 3.5 Building local capacity through empowerment Examples of results achieved through community Empowerment, for example through community-driven participation in the 1990s development, can stimulate and build on existing capac- Strengthening service provision through community ity at the local or community level. People who have sur- participation in Mali. The IDA Second Health, Population, vived by trying to solve problems in difficult economic and and Rural Water Project for Mali, approved in 1991, political conditions have considerable capacity to put their aimed to improve the delivery of health services in the experience and skills to work, once they are empowered. countryside in pa.rlershlp *o vth local communities and with What is perceived as a lack of local capacity is often a re- UNICEF. By 1998, nearly 300 new ccininiuriirv health flection of the fact that what local people want is differ- centers had been built. The percentage of the population ent from what central planners want. When local people living within 1 5 kilometers of a health facility more than have the power to solve problems, they will have the in- doubled from 17 percent in 1995 to 39 percent in 1998. centive to organize, assess current ills, and work out so- Community management committees were established lutions. The very act of wrestling with problems develops for some government clinics, although staff continue to new skills. Capacity creation in this context is most ef- be employed by the government. Generic prescription fectively iearning by doing, learning by use of power, drugs are now widely available, and prices are low enough learning by solving problems, and learning by making for c-.rTnrr unir.,' health centers to cover recurrent costs from mistakes. This does not mean that skill development is drug sales. not required. It means that skill development should be demand-driven. Once local governments are in place, Decentralized community development in indonesia. they will soon identify which skills are most needed and In 1998, the World Bank approved a loan to support de- in what sequence. The best solution is to empower local centralization through direct transfer of government funds governments and local communities, and then offer col- to the kecamatans, Indonesia's subdistricts. The Jl Ijrct lets laborative support as ; ,Iis are upgraded. people choose whether to use funds for "social goods" (Excerpt from Community-Driven Development, A Vision such as an infrastructure projects (roads, bridges, irriga- of Poverty Reduction through Empowerment, Africa Re- tion schemes, market places), that are funded through gion, 2001, drawn in turn from conclusions of a techni- grants, or for individual "revolving funds" spurring smail cal consultation organized jointly by the World Bank, scale income-generating activities, that have to be paid back FAO, IFAD, and others.) with interest. Transparency lies at the heart of the project. All financial transactions take place in public places, and virtually all information is made public. The project is monitored by independent regional NGOs and by In- The Bank is also paying attention to the linkages between donesian journalists, all of whom share their findings CDD and public sector decentralization efforts. Decen- openly with no prior review. Cases of corruption, which tralizing functions and resources for cost-sharing to com- exist, are tracked and recorded, and many are solved. Villagers like the project; participation in meetings is very munity governing structures can sustainably empower high, especially since separate meetings for women were comrrmuniities while crcating the accountability and leadcr- set up. Though it is too soon to gauge the project's long- ship required for good governance at the local level. There term impact on poverty, its outputs are significant. By will be increased efforts, therefore, to foster a mutuallv re- early 2001, 10,000 vilages were receiving funds, build- inforcing process between community development and local ing 10,000 km of roads and supplying communities with government development, an approach alreadv being clean water. In the midst of Indonesia's economic crisis, the project also provided over 30 million man-days of adopted by the Africa region (see box 3 paid labor in poor rural areas. Supportingpoorpeople's organizations. Poor peo- Decentralized community projects in Malawi. The ple's networks and organizations enable them to negotiate Malawi Social Action Fund, launched in 1996 with IDA with the state and private suppliers and buyers to work out f0Ind;ng finances self-help community projects. Project se- lection and ronii torlgrq is done by local advisory commit- more equitable relationships and access for their members. tees made up of NGO representatives, Social Fund staff, The Bank can assist in providing technical knowledge to government officials, and beneficiaries. One example of these organizations. Likewise, support to small and micro- a community program is that of the orphanages run by enterprises can help foster networks and associations of the NGO Friends of Orphans Community Care Center, the poor through such mechanisms as business clusters, fran- which now support more than a thousand children and chising, leasing and subcontracting; and business incuba- train caregivers to raise orphans, so they can remain in the tors. These are areas in which the Bank Group is exploring community. opportunities and innovative approaches-for example by 40 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000/2001 supporting small farmer producer organizations in West report cards, beneficiary assessments, and participatory Africa. Supporting poor people's organizations is an area in poverty assessments, as well as new quantitative surveys.5 which the Bank is innovating and experimenting with Moreover, the Bank is stepping up its efforts to integrate demonstration projects, while proceeding cautiously and con- public expenditure management and related institutional sistently evaluating progress. concerns into its public expenditure analysis and lending programs. Poverty Reduction Support Credits (PRSCs), such Enhancing acconntability and enforcenment as the recent operations for Uganda and Vietnam, are also expected to be used increasingly as an instrument for Inm,proving sjstens for public sector planniiing, medium-term institutional capacity building. budgeting, moniitorinig, oversight, atnd enforcement. Public spending programs are one of the most important Increasing access to inJbormation levers of public action for poverty reduction. The Bank's fiscal year 2001 Public Sector Strategyemphasizes the impor- Enihanicinig access to iniformlationi in colintries. The tance of sound, transparent, and participatory systems for PRSP approach fosters increased national dialogue and dis- the planning and budgeting of programs-and, at the ag- semination of and exchange of information in countries. gregate level, of the national budget-for enhancing re- Better access to information is also being embedded in Bank sponsi veness of public authorities to the needs and demands projects-for example, the economic governance component of citizens including the poor. Making government and pub- of a pipeline project for Ghana will support reforms in in- lic sector institutions more accountable for their fiduciary formation and public disclosure policy. Bank engagement in responsibilities is important for improving governance and country dialogue on budget management is promoting dis- reducing corruption which bears especially heavily on poor closure and publication of budget allocation and execution people. Hence, developing accountability procedures information. The Bank has also begun to support media de- whereby civil society has access to information to monitor velopment and training. In its knowledge management work, performance effectively is also critical. the Bank has increasingly used its cxternal web site, its pub- Bank-supported analytical work, including fiduciary lications, and, most recently, the Global Development Gate- assessments (see box 2. 1, chapter 2), Public Expenditure Re- way as a means of increasing the availability of information. views TPERs), and Institutional and Governance Reviews, is helping countries to assess and strengthen public expen- Bank disclosure policy. The Bank is taking signifi- diture management, procurement, and financial manage- cant steps to improve the disclosure of its own documents. ment systems. New guidelines for PERs emphasize the The new disclosure policy aims not only to increase thenum- need for increased attention to institutional and systemic ber and types of documents made public but also to proac- enhancement of public expenditure management, includ- tively disseminate information, especially to those affected ing budget accounting and auditing. To build capacity and by Bank operations. promote institutional change, the Bank has been increas- ingly undertaking collaborative PERs, for example in Security Tanzania and Mozambique. Institutional and Governance Reviews are being used to assess institutions, pinpoint per- The WDR 2000/2001 stresses the importance of efforts to formance failures, and analyze the feasibility of reform in reduce the vulnerability of poor people to economic shocks, the context of political realities and other constraints. natural disasters, ill health, disability, and personal vio- Recenr joint Bank-Fund work on expenditure tracking in lence, and the risks that these pose. Risk and vulnerability HIPC countries is leading to the adoption of country ac- are particularly important drivers of poverty in many coun- tion plans for improving performance. tries, including middle-income ones. The Bank is also paying greater attention to supporting the functioning of other institutions that strengthen public The social r isk nanagementftramework sector accountability, such as Ombudsman offices and pub- and its implementation lic audit institutions. Support is growing for improved mon- itoring and evaluation systems15 and iiistitutiuii that collect, The Banik is workilig to incorporatc risk managec1iCilL at tlle evaluate, and publicize data on public sector performance, macroeconomic, financial, sectoral, and household levels in and for the use of participatory instruments such as citizen its overall support for poverty reduction. The Social Risk ORIENTING BANK OPERATIONS TO SUPPORT OPPORTUNITY, EMPOWERMENT, AND SECURITY 41 Management Framework, laid out in the Bank's new social the behavior of households during crisis and of the effec- protection strategy, represents a key step in operationaliz- tiveness and efficiency of alternative safety net options (for ing the security dimension of the WDR. Managing risks re- example in Mexico and Argentina). quires actions to reduce poor people's insecurity (e.g., While the risk management framework is being ap- through skills building and making labor markets more in- plied within the social protection portfolio, it is still in the clusive), offset the risks they face (e.g., by improving old age process of becoming an integral part of Bank country strat- income security, providing appropriate unemployment egy. Further analytical work on vulnerability is required at benefits, and fostering the development of self-insurance the country and sector level, to refine the approach and schemes), and promote mechanisms for coping with risk and broaden the diagnosis and design of interventions beyond vulnerability (e.g., through appropriately designed safety net the social protection dimension. Some recent sector strate- programs, including social funds). The Social Risk Man- gies have begun to address issues of risk and vulnerability. agement Framework also supports the incorporation of risk For example, the forthcoming Private Sector Development management components into market-based reforms, for Strategy highlights the role of private sector development example, rethinking micro-finance in the context of social in protecting individuals from arbitrary treatment and ex- protection programs, building financial literacy, and so on. propriation. The Environment Sector Strategy outlines ap- Regional social risk management strategies are being pre- proaches to be adopted to reduce vulnerability to pared. In East Asia and Latin America, the strategies stress environmental risk, for example through community-based labor market issues (including insurance mechanisms for in- ecosystem service initiatives and vulnerability reduction formal sector workers and severance pay arrangements for investments. The Urban Sector Strategy focuses on measures formal sector workers), the financial sustainability of social to enhance safety and security in urban areas. Given the par- security systems (particularly of pension systems), and so- ticular exposure of poor rural households and small-scale cial safety nets (including enhancing design to make pro- entrepreneurs to insecurity and its consequences, risk man- grams more counter-cyclical). In Africa, attention will focus agement issues will be important elements of the Rural on enhancing the coverage, readiness, and targeting of Development and Private Sector Development Strategies cur- safety nets; developing operations in the areas of conflict pre- rently being formulated. vention and post-conflict intervention; direct support for Bank operations also support measures to reduce risk community-based care of orphans and other especially vul- and vulnerability. In the financial sector, Special Financial nerable children (see the Malawi example in box 3.5); in- Operations help countries cope with financial crises, and novative forms of insurance and multi-risk social protection may be widened to cover other vulnerabilities. As noted in budgetary funds; structuring demand- and supply-side chapter 2, a new draw-down facility to help middle-income measures to maintain consumption of social services after countries offset volatility in the case of a serious economic a shock; establishment of micro-finance mechanisms; civil shock is also being considered. In the environment sector, code reform to enhance the property rights of women and Bank operations have successfully supported over the years children; and better drought and disaster preparedness. environmental and resource management measures de- In Eastern Europe, the strategy will emphasize en- signed to enhance poor people's security (see box 3.6). hancing the flexibility of labor markets, pension and un- To operationalize the security dimension of the WDR employment insurance reforms, and means-tested social the Bank is also working with others to address several assistance systems that foster work incentives. In Central Asia, open issues through research and debate. Defining indica- risk management will focus on efforts to attain macroeco- tors and measures of risk and vulnerability is a starting nomic stability and restructuring, and on social protection point for this work and is currently underway. More work efforts targeted towards poverty relief. In South Asia, the is also being done to understand the importance of insecurity regional strategy emphasizes the importance of informal in- as a dimension and cause of poverty. For example, insights stitutions for credit and insurance as critical mechanisms into the long-term impact on household poverty of a series for coping with risk. of short-term shocks can have important implications for In addition to the development of regional strategies, the design of effective safety net strategies. Household sur- several country vulnerability assessments are underway, in- veys need to be modified to capture risk issues. Moreover, cluding five in the Latin America and Caribbean region, systematic evaluation will be required of the wide range of which has also completed a regional study on risk and in- alternative interventions for reducing risk and providing in- security.6 These efforts are yielding better understanding of surance for the poor. 42 POVERTY REDUCTION AND THE WXORLD BANK: PROGRESS IN OPERATIONALIZING THE wDR 2000o2001 Bank is including disaster mitigation and management in BOX 3 6 upstream national strategy design-in dialogue and assistance Reducing vulnerability through better resource on national program design in Mexico; in the context of PRSP management in Colombia and Turkey preparation in Vietnam; and in CASs for Bangladesh and 'frc.-Col,n-ibian,-, make Lir, 91 pe~r,:tl 3?1h , inc,liln n n 90 l:ernt,ci thep irwirjIn Mozambique. As a consequence, the Bank is undertak-ing more in the Choco' region alo-q C,-,I.,n,rrL,,s Pa:ifi ci It arid: theJ are ,n,ciriq the country's poorest. In 19.4 r ihJ lt-,e e r investment with a focus on prevention and mitigation (for aprjcied a Natural Pesc:ur:e; i.lari,aiemert Frcgrrni example, in Honduras, Mexico, and Vietnam). whvich hl riedFe thle;e q ri:ll-. ,L-IoI ,ri Tire: (: lr*l her ,: I rid hi preserving their cultural ard, ethnr: idelritie:, i. 1a... Conflict mitigation anCdpost-cn/flict ei.,tijriie;sAfro-Colombiar-,-,:n- : rilnitie. a; ethnic groiij, reconstru7ctio)l with collective territorial rights. By 2001, the proira has helped 58community:.-or,,t:,l: ain title: to 2 ?c rmil- lion hectares of land, bene-inigr cJi:r 22,003-i l all-lille; aln The Bank is also striving to help countries to improve se- 100,000 people. The projec ; l:,irTiciri.ac.r, rpprc.a: las curity in the context of conflict and violence, focusing encouraged environmental ccr:,er .ai,rl arid b,.lrere specifically on areas within its mandate and competencies, the bonds between local rEsident arid ;iime insririjiqDri'S- such as economic, social, and judicial policy. A Post Con- in the face of increasing v b:ler,:e c,, guerrilla .and para flict Lnit is working to ensure that country strategies ard military groups. When the Ear,; a,pr,o.ed Wele E a iter r, Ar,M t,la V.3 programs include a broader understanding of security and tershed rel-,el:,lIat,r c iri 1993 ii locred Ir- conflict, including underlying institutional and social ten- novative way t. m:,lake ;..ter:.r,e:; reriarlit.In ,. h1, sions. Guidance to staff on Development Cooperation- Project desicri, 'tritre, r ':1 ll3gr par(icipatroi Ict aI cl izd Conlf7ict calls for analytical work in this area to un- farmers, * n..i orig .'.it pr,r:,oECT :r.itf ii the liEld carrie l'p derpin Bank support strategies, CASs, and PRSPs. Recent with the go;L. nit rlihe .,Mritr,l g .1orr,ri,Urt[ tj.-. ciii wroh; ar,,d ne.w g r,er,tiue; are bc:Kstin prciucron ra- work in Sri Lanka offers an example of how to gain a bet- rrniaTi3l l and r.,ral Inon,e- tere at lea:t dciuble ,at*l t understanding of the ways in which war affects people's lite ;riage, re.al that retc,re--tatici, ics t ak ii- pla:e. by lives, and is helping the government to improve its policy Decetber I1999 tree: had been plartted or 60 000 framework while also informing the development of the r,peare;, of lacid. Poverty Assessment and CAS.- The Bank is building a database of good practices to complement guidancc to staff. In addition, the Conflict Prevention and Reconstructicin Disaster mitigation ancd mclflagemenit Unit is administering the Post-Conflict Fund, which is providing support to 24 of 37 countries currentlv consid- Progress has been made in enhancing poor people's secu- ered to be conflict-affected. rity in the area of natural disaster management and miti- gation. A Disaster Management Facility has been established to promote a strategic response to disaster emergencies and Notes to integrate disaster prevention and preparedness into de- velopment efforts. The Facility has adopted a comprehen- 1. One example is a project in Ecuador which has irnproved sive risk management strategy-identifying hazard and risk access to such services among women and children. The Bank is cxposure in client countries to inform program designs; re- also engaged in research on diagnosing country-specific judicial ducing risks by including measures to avoid hazards (for ex- and legal issues with a view to developing solutions. ample. through land use planning) and to withstand disasters 2. Many micro-finance institutions hold promise, but better (building codes); transferring or sharing risks that cannot discipline is required, especially to make subsidies through such be reduced (e.g., advance disaster risk awareness, tradi- institutions explicit and part of the strategy for reducing poverty. tional or informal insurance mechanisms, calamity funds); Debate continues on the extent to which subsidies are warranted. and staring information, raising awareness, and training. The World Bank has criteria for subsidies with respect to finan- Recent Bank-supported reconstruction projects-such as cial intermediation. Likewise there are draft guidelines on sup- those following the Turkey earthquake, floods in Cambodia, porting market development of business development services, Mozambique, and Vietnam, cyclones in Madagascar, Hur- including a section on subsidies. ricane Mitch in Central America, and the earthquake in 3. For example, a World Bank project in Andhra Pradesh, India, Gujarat-have moved beyond rebuilding to focus on strength- is supporting a performance scoring system to assign a credit rat- ening resilience against future disasters. Importantly, the ing for self-help groups. In the Dominican Republic, India, and ORIENTING BANK OPERATIONS TO SUPPORT OPPORTUNITY, EMPOWERMENT, AND SECURITY 43 Swaziland some financial institutions are beginning to use smart budget transfers contributed to a dramatic increase in non-wage cards with an embedded microchip containing information on a financing. client's credit history to reduce transactions costs and establish credit 6. Seczzring oir Ftutfre in a Global Economv, 2000. history. 7. The Sri Lanka Framework for Relief; ]. I1, /'iti.'O.i,. 4. Not all goods and services are best managed through collective and Reconciliation was launched initially under the leadership action at the community level. Public goods that span many com- of the World Bank and was more recently taken over by the gov- munities or that requirc largc and complex systems are often bet- crnmcnt of Sri Lanka. Jointly with othcr dcvclopment partncrs, ter provided by local or central government. And many private goods the Bank helped the government develop a consultative mecha- are often better provided using a market-based approach, relying nism to bring civil society, communities, and donors together to more on individual enterprise than on collective action. identify constraints to the delivery of relief and rehabilitation to 5. A country where data collection and publication have war-affected areas and improve reconciliation efforts. Consulta- yielded tangible results is Uganda. When expenditure tracking tions involving 2,500 people all over the country, including com- surveys revealed that budgeted non-wage expenditures were munities in the war-affected Northeast, led to a better understanding not reaching district schools, subsequent publication of these of how the war affects people's lives. CHAPEx 4 Challenges Ahead Chapters 2 and 3 outlined the steps the Bank is taking to of strategy preparation is being emphasized over speed. orient its activities, analytical work, and the design and im- The broad-based participatory processes that are crucial for plementation of operations towards achieving the interna- widely shared ownership are being encouraged in ways that tional development goals and implementing the WDR maximize participation (including that of poor people) 2000/2001. This chapter summarizes some of the main while respecting governments' and parliaments' sovereignty. challenges we face in 2002 and beyond. Since not all low- (or middle-) income countries have well- established traditions of participation, building participa- Country orientation tory processes under these circumstances will require care, time, and effort. Continuing to align Bank activities with country-owned strategies, as set forth in the Bank's country business model, Partnerships is crucial to increase the impact of aid. This implies mov- ing ahead with the implementation of the PRSP approach Another challenge embodied in the CDF principles, the in low-income countries and emphasizing country owner- PRSP approach, and the WDR 2000/2001 is that of ship in middle-income countries. In particular, Bank CASs, strengthening the concept and practice of partnership-not as the Bank's program linked to the country's vision, are in- only with client countries but also with other donor orga- creasingly responsive to countries' priorities-following nizations. Real progress is being made in this area. Collab- the good practice established in fiscal year 2001. Lending oration between the Bank and the IMF in the PRSP context instruments are also more closely linked to PRSPs-sup- has become increasingly close through joint work on Joint porting priorities established through national processes, Staff Assessments of I-PRSPs and full PRSPs, mechanisms using established monitorinig indicators, focusing condi- such as the Bank-Fund Joint Implementation Committee tionality to key areas, and practicing transparency. (which coordinates the two institutions' efforts), and joint Practicing the principles of country orientation pre- work on, e.g., poverty and social impact assessment and sents challenges. The need of donors to be assured that the streamlining conditionalities in line with the primary areas funds they provide are used effectively and efficiently for of focus of each institution (macroeconomic policy for the poverty reduction poses constraints to the scope of policies IMF, structural and sectoral policies for the Bank). that can be supported. While careful consideration of in- Progress is also evident in collaboration with other mul- dividual countries' conditions and needs, along with open tilateral and bilateral donor agencies. A joint memorandum discussion of policy alternatives and better understanding on good practice in working together has been prepared by of their poverty and social impacts, can be expected over the Asian Development Bank and the Bank and the IMF, time to enhance the convergence between the priorities of and work is ongoing to harmonize the procedures of the countries and external partners including the Bank, this will Multilateral Development Banks, the Bank and the IMF. not always be a quick or easy process. The European Union has decided to use PRSPs as the basis Additionally, the early stages of implementation of the for its assistance to the poorest developing countries in the PRSP approach have been marked by rapid preparation of Africa, Caribbean, and Pacific regions. In April 2001, the I-PRSPs, reflecting countries' and development partners' con- High-Level Meeting of the Development Assistance Com- cerns about securing early access to debt relief. As countries mittee (DAC) of the OECD approved guidelines on poverty move towards developing their first full PRSPs, the quality reduction for its members. Multi-donor working groups have 45 46 POVERTY REDUCTION AND THE WORLD BANK: PROGRESS IN OPERATIONALIZING THE WDR 2000/2001 been formed at the country level to support the PRSP ap- and cross-cutting elements of sector strategies with Coun- proach. Successive Bank-IMF PRSP Progress Reports have try Assistance Strategies will require attention in the next documented progress with partnerships, including closer in- year. teraction with United Nations agencies-notably the UNDP, Enhancing staff skills is another challenge. Be need the ILO and the WHO-and with nongovernmental or- strong behavioral and integrative skills at all levels to work ganizat:ions. Finally, as noted in previous chapters, the Bank effectively in the new CDF/PRSP framework; better cross- is working with other partners at the regional and global sectoral and integrative professional skills to address corporate levels on issues relevant to poverty reduction goals. advocacy priorities and global public goods priorities; more That having been said, we are further intensifying these effective managerial skills for leaders; and learning tools bet- efforts, Better donor collaboration is essential to maximize ter suited to organizational needs. The Bank is responding aid effectiveness, and to reduce the burden on countries of to these challenges by reformulating its Staff Learning Pro- duplicative or even conflicting donor relations. And we are gram along three lines. First, learning is being scaled up for encouraging other donors to expand their financial and operational teams, including a new pilot program for cross- technical support for both low-income and middle-income sectoral teams working on PRSPs, offering PRSP pre-mission countries as appropriate within a coordinated, country- clinics and PRSP seminars. A new operational core cur- centered overall assistance framework. riculum is also being rolled out covering analytical, safeguard, fiduciary, and other basic skills and knowledge. Skills related Further changes in the way to the dynamics and determinants of pro-poor growth and we do business the impact of policies on poverty reduction are being em- phasized. Second, management learning is being revamped Making a reality of country orientation and an enhanced to strengthen management performance. Third, learning partnership approach entails changes that go beyond poli- tools and methods are being improved for higher impact cies and processes, important though such changes are. In learning, including through greater reliance on "action" a fundamental sense, changes in our institutional culture- learning, tcam-based learninlg, and c-learninlg. In addition not only what we do but the ways in which we do it-will to formal learning, practical learning-by-doing is taking influence success. place. Applying the multifaceted approach to poverty reduc- A significant amount of learning and exchanging of tion described in the W7DR 2000/2001 calls for integrative experiences associated with implementing PRSPs is already and interdisciplinary teamwork among and within country underway among country teams. The PRSP Sourcebook, teams. At the country level, sectoral staff are becoming more developed to assist countries with PRSP preparation, also involved in the design of the country vision through PRSP offers Bank staff substantive and focused intellectual guid- and other strategic work. Within the Bank, inter-network ance on macroeconomic, sectoral, and cross-cutting issues cooperation has made a good start, as has country team- critical for effective poverty reduction. The Sourcebook network cooperation. Better internal procedures, for ex- forms the basis for many of the PRSP learning events tak- ample, to involve sectoral staff in the preparation of Joint ing place throughout the Bank, for example, in the health StaffAssessments of I-PRSPs and PRSPs, are helping in this and education areas. respect. Finally, over time, our incentive structure is increasingly More work is also required to integrate cross-sectoral ap- emphasizing country ownership, results and accountabil- proaclies in important areas such as governance and gen- ity, and this should play a major role in changing behavior der concerns. Progress has been made on governance, both and culture among managers and staff. Many examples al- through the completion of the Bank's public sector strat- ready exist of better alignment of our work with national egy and in terms of integrating governance concerns in priorities, and of clients commenting on positive changes country and project work-including, for example, initia- in attitudes and behavior among front-line staff. But there tives to help strengthen public expenditure management at is always room for improvement. the national level and financial management standards for operations at the project level. With respect to gender, the Mainstreaming the WDR 2000/2001 Gender Strategy proposes concrete actions such as capac- ity building and country-level analytical work to assist not Ensuring that Bank activities support actions in the three only countries but also Bank staff in better integrating areas identified by the IVDR 2000/2001 poses specific gender issues. More generally, better integration of sectoral challenges. In the area of creating opportunities, the key CHALLENGES AHEAD 47 challenges are to better understand what pro-poor growth with risks in the context of economic shocks, natural dis- means and how it can be supported. What policies not only asters, and conflict is being strengthened. raise average incomes and living standards, but also those of the poor, hopefully more than proportionately? Ana- Analytical work lytical questions with respect to pro-poor growth are being addressed at both the macro and micro levels. At the Effective implementation of the WDR2000/2001 frame- macro level, this means asking what are the consequences work will require Bank assistance to be informed by good for different social groups, and specifically those comprising analyses of the poverty situation and of the linkages between the poor (rural, urban, regional, minorities, disadvan- public actions and poverty outcomes. The Bank is com- taged groups) of market-oriented policies, and which poli- mitting additional resources to strengthen analytical work cies can deliver the best growth and poverty reduction on poverty issues. This analytical work will improve on past outcomes under specific country circumstances. From a practice in a number of respects: micro point of view, we are asking what are the impedi- * in most cases, it will be done jointly with country coun- ments to fuller participation of the poor in economic ac- terparts to build capacity, and with other partners; tivities; how is access to productive factors, such as land * it will support in-country participatory processes aimed and capital, constrained; what are the physical and infor- at reaching broad consensus on methodologies, results, mational barriers to accessing markets, and so on. Sub- and possible strategies; stantial amounts of data and analytical work will be carried * it will take a multidimensional view of poverty, con- out to move from abstract principles to concrete, country- sidering empowerment and security dimensions in ad- specific actions. dition to economic and human capital development In the area of empowerment, one key challenge is to clar- considerations, and will integrate institutional, social, ify the areas in which the Bank has the mandate, expertise, gender, and environmental concerns; and comparative advantage. A second challenge, as noted * whenever possible, it will employ both quantitative and in chapter 3, is determining how we can reorient Bank qualitative methodologies; work so that it is both better informed by the views of poor * it will describe the building blocks for pro-poor growth, people and draws more on their contributions. Finally, a third with particular emphasis on the poverty and social im- key challenge is to support the strengthening of public in- pacts of market-oriented reforms. stitutions, especially at the local level, to improve governance These new directions will be reflected in revised guidelines and provide efficient and effective services to poor people. for analytical work on poverty. The Bank is stepping up its support for innovative ap- proaches in this area, including CDD-type interventions, Monitoring and evaluation but is doing so with caution, putting into place appropri- ate fiduciary and monitoring and evaluation systems. We Finally, a stronger focus on monitoring and evaluating re- are currently undertaking wide-ranging discussions of these sults, both at the Bank and in countries, is essential for and other issues in the preparation of a sourcebook for staff supporting progress towards meeting the Millennium on empowerment. Development Goals and reducing poverty along the dimen- In the area of enhancing security, we are mainstream- sions identified by the WDR 2000/2001. This means ing systematic risk and vulnerability analysis and use the risk developing and refining indicators for the empowerment and management framework more consistently in the prepara- security dimensions of poverty, expanding the use of indi- tion of country strategies and individual operations. Detailed cators of performance based on results on the ground, regional and country social protection action plans are incorporating them in policy formulation and in our coun- being developed and lending and non-lending work designed try assistance strategies, and applying them rigorously in to help the poor and vulnerable reduce, mitigate, and cope assessing our activities and operations. Annexes 50 ANNEXA ANNEXA. SUMMARIES OF COMPLETED POVERTYASSESSMENTS, FISCAL YEARS 2000 AND 2001 Note: Summaries of completed poverty assessments are available on the Poverty Net web site, at http://wbInOOl 8. worldbank.org/dg/povertys.nsf/Poverty+assessment?openview&count=1 999, so they are no longer included in this report See Annex B for the number of poverty assessments completed by region and Annex C for full report titles and document numbers. ANNEX B 51 ANNEX R POVERTYASSESSMENTS COMPLETED, FIscAL YEARS 1989-2001 Completed FY89-99 FYOO FYO1 Total East Asia and the Pacific 12 4 1 17 Europe and Central Asia 18 6 4 28 Latin America and the Caribbean 28 6 3 37 Middle East and North Africa 6 1 2 9 South Asia 10 1 2 13 Sub-Saharan Africa 39 1 0 40 Total 113a 190 12' 144d a Includes 93 first-round poverty assessments and 20 updates. b Includes 7 first-round poverty assessments and 12 updates. ' Includes 2 first-round poverty assessments and 10 updates. I Includes 102 first-round poverty assessments and 42 updates. Note: Some country teams prepared a poverty note instead of a full poverty assessment for reasons that include political constraints and data or resource limitations. While poverty notes do not contain the same level of comprehensive analysis as a full poverty assessment, they serve as a springboard for action and further analysis. Poverty notes, which are not inc uded in the table above, have been completed for the following countries: Burkina Faso (fiscal 1997), Central African Republic (fiscal 1998), Papua New Guinea (fiscal 2000), and Turkmenistan (fiscal 2001). 52 ANNEX C ANNEX C LIST OF COMPLETED POVERTYASSESSMENTS, FISCAL YEARS 1989-2001 Country Report Title Report No. EAST ASIA AND THE PACIFIC Cambocia Poverty Assessment 19858-KH China Strategies for Reducing Poverty in the 1990s 10409-CHA China (update) Overcoming Rural Poverty 21105-CHA Fiji Restoring Growth in a Changing Global Environment 13862-FIJ Indonesia Poverty Assessment and Strategy Report 8034-IND Indonesia (update) Public Expenditures, Prices and the Poor 1 1293-IND Indonesia (update) Poverty Reduction in Indonesia: Constructing a New Strategy 23028-IND Lao PDR Social Development Assessment and Strategy 13992-LA Malaysia Growth, Poverty Alleviation and Improved Income Distribution in Malaysia 8667-MA Mongolia Poverty in a Transition Economy 15723-MOG Philippines The Philippines: The Challenge of Poverty 7144-PH Philippines (update) An Opening for Sustained Growth 11061-PH Philippines (update) A Strategy to Fight Poverty 14933-PH Philippines (update) Poverty Assessment 20498-PH Thailano Growth, Poverty, and Income Distribution: An Economic Report 15689-TH Vietnam Poverty Assessment and Strategy 13442-VN Vietnam (update) Development Report 2000: Attacking Poverty: Country Economic Memorandum 19914-VN EUROPE AND CENTRAL ASIA Albania Growing Out of Poverty 15698-ALB Albania update) A Qualitative Assessment of Poverty in Ten Areas of Albania Armenia Confronting Poverty Issues 15693-AM Armenia (update) Assistance in Armenia 19385-AM Azerbaijan Poverty Assessment 15601-AZ Belarus An Assessment of Poverty and Prospects for Improved Living Standards 15380-BY Bulgaria Poverty During the Transition 1841 1-BUL Croatia Economic Vulnerability and Welfare Study 22079-HR Estonia L.ving Standards During the Transition 1 5647-EE Georgia Poverty and Income Distribution (2 volumes) 19348-GE Georgia (update) Poverty Update 22350-GE Hungary Poverty and Social Transfers 14658-HL, Hungary (update) Long-Term Poverty, Social Protection, and the Labor Market (2 volumes) 20645-HU Kazakhs.an Living Standards During the Transition 17520-KZ Kyrgyz Republic Poverty Assessment and Strategy 14380-KG Kyrgyz Republic (update) Update on Poverty in the Kyrgyz Republic 19425-KG Kyrgyz Republic (update) Poverty in the 1990s in the Kyrgyz Republic 21721-KG Latvia Poverty Assessment (2 volumes) 20707-LV Macedonia, FYR Focusing on the Poor (2 volumes) 1941 1-MK Moldova Poverty Assessment 19926-MD Poland Poverty in Poland 13051-PO. Romania Poverty and Social Policy 16462-RO Russia Poverty in Russia: An Assessment 14110-RU Russia (update) Targeting and the Longer-Term Poor (2 volumes) 19377-RU Slovak Republic Living Standards, Employment and Labor Market Study 22351-SK Tajikistar Poverty Assessment 20285-TJ Turkey Economic Reforms, Living Standards, and Social Welfare Study 20029-TR Ukraine Poverty in Ukraine 15602-UA LATIN AMERICA AND THE CARIBBEAN Argentina Argentina's Poor: A Profile 13318-AR Argentina (update) Poor People in a Rich Country (2 volumes) 19992-AR Bolivia Poverty Report 8643-BO Bolivia (update) Poverty Equity & Income: Selected Policies for Expanding Earning 15272-BO Opportunities for the Poor (2 volumes) Brazil Brazil: A Poverty Assessment (2 volumes) 14323-BR Chile Social Development Progress in Chile: Achievement and Challenges 8550-CH Chile (update) Poverty and Income Distribution in a High-Growth Economy: 22037-CH The Case of Chile 1987-98 Colombia Poverty Assessment Report (2 volumes) 12673-CO Costa Rica Public Sector Social Spending 8519-CR Costa Rica (update) Identifying the Social Needs of the Poor: An Update 15449-CR Dominican Republic Grovvth with Equity: An Agenda for Reform 13619-DO Dominican Republic (update) Poverty Assessment: Poverty in a High-Growth Economy (1 986-2000) 21306-DO ANNEX C 53 Country Report Title Report No. Ecuador A Social Sector Strategy for the Nineties 8935-EC Ecuador (update) Poverty Report 14533-EC El Salvador The Challenge of Poverty Alleviation 12315-ES Guatemala An Assessment of Poverty 12313-GU Guyana Strategies for Reducing Poverty 12861-GUA Haiti The Challenges of Poverty Reduction (2 volumes) 17242-HA Honduras Country Economic Memorandum/Poverty Assessment 13317-HO Honduras (update) Poverty Diagnostic 2000 20531-HO Jamaica A Strategy for Growth and Poverty Reduction 12702-JM Mexico Mexico in Transition: Towards a New Role for the Public Sector 8770-ME Nicaragua Poverty Assessment 14038-NI Nicaragua (update) Poverty Assessment: Challenges and Opportunities for Poverty Reduction 20488-NI (2 volumes) Panama Poverty Assessment: Priorities and Strategies for Poverty Reduction (2 volumes) 18801-PAN Paraguay Public Expenditure Review-the Social Sectors 10193-PA Paraguay (update) Poverty and the Social Sectors in Paraguay: A Poverty Assessment 12293-PA Peru Poverty Assessment & Social Sector Policies & Programs for the Poor 11191 -PE Peru (update) Poverty and Social Developments in Peru, 1994-1997 ISSN: 0253-2123 Trinidad and Tobago Poverty and Unemployment in an Oil Based Economy 14382-TR Uruguay Poverty Assessment: Public Social Expenditures and Their Impact on 9663-UR the Income Distribution Uruguay (update) Maintaining Social Equity in a Changing Economy 21262-UR Venezuela From Generalized Subsidies to Targeted Programs 9114-VE Venezuela (update) Investing in Human Capital for Growth, Prosperity, and Poverty Reduction 21833-VE MIDDLE EAST AND NORTH AFRICA Algeria Growth, Employment, and Poverty Reduction (2 volumes) 18564-AL Egypt, Arab Republic of Alleviating Poverty During Structural Adjustment 9838-EGT Jordan Poverty Assessment 12675-JO Morocco Poverty, Adjustment, and Growth 11918-MOR Morocco (update) Poverty Update 21506-MOR Tunisia Poverty Alleviation: Preserving Progress while Preparing for the Future (2 volumes) 13993-TUN West Bank and Gaza Poverty in the West Bank and Gaza 22312-GZ Yemen, Republic of Poverty Assessment 15158-YEM SOUTH ASIA Bangladesh Bangladesh Poverty and Public Expenditures: An Evaluation of the Impact 7946-BD of Selected Government Progs. Bangladesh (update) From Counting the Poor to Making the Poor Count 17534-BD India Poverty, Employment and Social Services 7617-IN India (update) Achievements and Challenges in Reducing Poverty 16483-IN India (update) Reducing Poverty in India 17881-IN India (update) Policies to Reduce Poverty and Accelerate Sustainable Development 19471-IN Nepal Relieving Poverty in a Resource-Scarce Economy 8635-NEP Nepal (update) Poverty in Nepal at the Turn of the Twenty-First Century 18639-NEP Pakistan A Profile of Poverty 8848-PAK Pakistan (update) Poverty Assessment 14397-PAK Sri Lanka Poverty Assessment 13431-CE Sri Lanka (update) Poverty Assessment 22535-CE SUB-SAHARAN AFRICA Benin Toward a Poverty Alleviation Strategy for Benin 12706-BEN Burundi Poverty Note: Prospects for Social Protection in a Crisis Economy 17909-BU Cameroon Diversity, Growth, and Poverty Reduction 13167-CM Cape Verde Poverty in Cape Verde: A Summary Assessment and a Strategy for its Alleviation 13126-CV Chad Poverty Assessment: Constraints to Rural Development 16567-CD Comoros Poverty and Growth in a Traditional Small Island Economy 13401-COM Congo Poverty Assessment 16043-COB Cote d'lvoire Poverty in Cote d'lvoire: A Framework for Action 15640-IVC Djibouti Crossroads of the Horn of Africa Poverty Assessment 16543-DJI Eritrea Poverty Assessment 15595-ER Ethiopia Toward Poverty Alleviation and a Social Action Program 11306-ET Gabon Poverty in a Rent-Based Economy 16333-GA The Gambia An Assessment of Poverty 11941-GM Ghana 2000 and Beyond: Setting the Stage for Accelerated Growth 11486-GH and Poverty Reduction Ghana (update) Ghana: Poverty Past, Present, and Future 14504-GH Guinea A Socioeconomic Assessment of Well-Being and Poverty 16465-GUI Guinea-Bissau Poverty Assessment and Social Sector Strategy Review 13155-GUB 54 ANNEX C Country Report Title Report No. Kenya Poverty Assessment 13152-KE Lesotho Poverty Assessment 13171-LSO Madagascar Poverty Assessment 14044-MAG Malawi Growth Through Poverty Reduction 8140-MA. Malawi update) Human Resources and Poverty: Profile and Priorities for Action 15437-MAI Mali Assessment of Living Conditions 11842-ML Mauritana Poverty Assessment 12182-MAU MauritiLs CEM: Sharpening the Competitive Edge 13215-MAS Mozambique Poverty Reduction Framework Paper' None Namibia Poverty Alleviation with Sustainable Growth 9510-NAMvl Niger A Resilient People in a Harsh Environment: Niger Poverty Assessment 15344-NIR Nigeria Poverty in the Midst of Plenty: The Challenge of Growth with Inclusion 14733-UN Rwanda Poverty Reduction and Sustainable Growth 12465-RVW Rwanda (update) Poverty Note: Rebuilding an Equitable Society-Poverty and Poverty 17792-RW Reduction After the Genocide Senegal An Assessment of Living Conditions (2 volumes) 12517-SE Seychelles Poverty in Paradise 12423-SEv Sierra Leone Policies for Sustained Economic Growth and Poverty Alleviation 11371 -SL Swazilard Reducing Poverty Through Shared Growth 19658-SZ Tanzania The Challenge of Reforms: Growth, Incomes, and Welfare 14982-TA Togo Overcoming the Crisis, Overcoming Poverty: A World Bank Poverty Assessment 15526-TO Uganda Growing Out of Poverty 11380-UG Zambia Poverty Assessment 12985-ZA Zimbabwe Achieving Shared Growth: Country Economic Memorandum (2 volumes) 13540-ZIM DocumEnt was prepared for ccnsultative group meeting. ANNEX D 55 ANNEX D. PROGRAM OF TARGETED INTERVENTIONS, FISCAL YEARS 1992-2001 TABLE D-1 Program of Targeted Interventions (PTI), fiscal 1992-2001 Lending FY92a FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 World Bank (IBRD & IDA) PTI lending Millions of dollars 3,836.4 4,673.8 4,440.5 5,436.7 5,408.1 4,090.0 6,733.3 6,165.2 3,050.2 3,593.8 Percentage of investment lendingb 25 27 25 32 32 29 40 49 34 34 Total no. of projects in the PTI 57 72 63 75 79 77 101 111 63 62 Total no. of projects 187 214 197 208 223 203 240 216 193 190 IDA PTI Millions of dollars 1,812.3 2,136.7 1,853.0 2,423.2 3,246.0 1,873.5 3,266.8 3,032.6 1,828.0 1,892.1 Percentage of IDA investment lending' 44 41 43 54 63 53 54 62 51 41 Total no. of IDA-funded projects 34 44 35 46 50 36 55 69 40 38 in the PTI' Note: A project is included in the PTI if it has a specific mechanism for targeting the poor and/or if the proportion of poor people among its beneficiaries is significantly larger than the proportion of the poor in the total population. a Fiscal 1992 figures differ from those in Implementing the World Bank's Strategy to Reduce Poverty (World Bank, 1 993a) because they include seven projects that were added to the PTI after the earlier report went to press. hInvestment lending includes all lending except for adjustment, debt and debt-service reduction operations, and emergency recovery loans, which are distinct from regilar investment operations (see Annex F). 'The number of IDA-funded projects in the PTI excludes joint IBRD/IDA projects, which are counted only once, as IBRD projects. There was one such PTI project in fiscal 1992, two in fiscal 1995, one in fiscal 1996, one in fiscal 1997, four in fiscal 1998, eight in fiscal 1999, two in fiscal 2000, and one in fiscal 2001. TABLE D-2 Program of Targeted Interventions (PTI) by sector, fiscal 1992-2001 Sector FY92-94 FY93-95 FY94-96 FY95-97 FY96-98 FY97-99 FY98-00 FY99-01 PTI lending as percentage of total investment lendinga (IDA and IBRD) Agriculture 28 32 42 49 47 50 54 65 Education 72 67 63 56 62 60 62 56 Health, Nutrition, & Population 75 80 75 78 78 81 77 70 Social Protection 84 97 96 93 92 93 95 82 Urban development 38 36 28 29 41 65 62 37 Water supply & sanitation 46 39 29 22 32 34 46 36 Other sectors 6 6 8 10 12 17 18 1 5 IDA PTI lending as percentage of IDA investment lendinga Agriculture 46 44 54 61 61 58 62 76 Education 76 84 93 90 89 78 79 57 Health, Nutrition, & Population 87 88 93 93 95 95 91 77 Social Protection 72 92 93 94 94 92 89 87 Urban development 29 25 37 49 65 82 79 51 Water supply & sanitation 57 48 59 45 29 28 26 25 Other sectors 12 11 12 18 21 29 26 27 Note: Figures differ from those in earlier reports because of recent sector reclassification of operations. Investment lending includes all lending except for adjustment, debt and debt-service reduction operations, and emergency recovery loans, which are distinct from regular investment operations in objective and format. Source: World Bank. 56 ANNEX D TABLE D-3A Program of Targeted Interventions (PTI) lending by region, fiscal 2000 East Asia Latin Middle East Sub-Saharan and the Europe and America and and North South Africa Pacific Central Asia the Caribbean Africa Asia Total Total PTI lending Millions of dollars 550.2 477.4 185.4 579.1 392.5 865.6 3,050.2 Investment lending 1,599.5 2,427.1 1,319.0 978.7 836.6 1,861.1 9,022,C Percentage of investment lending 34 20 14 59 47 47 34 Total number of PTI projects 21 8 4 15 5 10 63 IDA PTI lending Millions of dollars 550.2 218.1 25.4 64.8 103.9 865.6 1,828.0 IDA investment lending 1,501.8 421.8 293.5 165.3 159.8 1,053.1 3,595.3 Percentage of IDA investment lending 37 52 9 39 65 82 51 Total no. of IDA-funded projects 21 3 2 2 2 10 40 in the PTIa aThe numoer of IDA-funded projects in the PTI excludes joint IBRD/IDA projects, which are counted only once, as IBRD prolects. There was one such PTI project in fiscal 1992, two in fiscal 1995, one in fiscal 1996, one in fiscal 1997, four in fiscal 1998, eight in fiscal 1999, two n fiscal 2000, and one in fiscal 2001. Source: World Bank. TABLE D-3B Program of Targeted Interventions (PTI) lending by region, fiscal 2001 East Asia Latin Middle East Sub-Saharan and the Europe and America and and North South Africa Pacific Central Asia the Caribbean Africa Asia Total Total PTI lending Millions of dollars 707.8 439.7 182.5 1,527.2 138.9 597.7 3,593.8 Investment lending 2,128.5 1,838.8 1,561.5 2,108.4 322.5 2,746.5 10,706.2 Percentage of investment lending 33 24 12 72 43 22 34 Total number of PTI projects 13 3 8 24 5 9 62 IDA PTI lending Millions of dollars 707.8 230.8 60.0 209.5 86.3 597.7 1,892.1 IDA investment lending 2,128.5 702.7 364.0 426.2 152.3 786.5 4,560.2 Percentage of IDA investment lending 33 33 16 49 57 76 41 Total no. of IDA-funded projects 13 2 5 6 3 9 38 in the PTIh 'The numrDer of IDA-funded projects in the PTI excludes joint IBRD/IDA projects, which are counted only once, as IBRD projects. There was one such PTi project in fiscal 1992, two in fiscal 1995, one in fiscal 1996, one in fiscal 1997, four in fiscal 1998, eight in fiscal 1999, two in fiscal 2000, and one in fiscal 2001. Source: tVorld Bank. ANNEX D 57 TABLE D-4 List of operations in the Program of Targeted Interventions (PTI). fiscal 2000-2001 IDA IBRD Country Project Name FY (US$ mul.) (US$ rn/h) East Asia and the Pacific China SMALLHLDR CATTLE DEV 2000 0 93.5 Indonesia ID-WSSLIC II 2000 77.4 0 Indonesia DECENT AGRJFOR EXT 2000 5 13 Indonesia SECOND KECAMATAN DEVELOPMENT PROJECT 2001 111.3 208.9 Lao PDR Agricultural Development Project 2001 16.7 0 Papua New Guinea PNG-GAZELLE RESTORATION II 2000 0 25.3 Philippines MINDANAO RURAL DEV 2000 0 27.5 Philippines PH-SOCIAL EXPENDITURE MANAGEMENT PROJECT 2000 0 100 Vietnamn COASTAL WetI/Prot 0ev 2000 31.8 0 Vietnam RURAL TRANSPORT II PROJECT 2000 103.9 0 Vietnam COMMUNITY BASED RURAL INFRASTRUCTURE 2001 102.8 0 Europe and Central Asia Albania SOC SERV DEVT 2001 1 0 0 Armenia SIF 11 2000 20 0 Azerbaijan HEALTH REF LIL 2001 5 0 Bosnia-Herzegovina LOC INIT 2 2001 20 0 Bosnia-Herzegovina COMM DEVT 2001 15 0 Bulgaria CHILD WELFARE REF 2001 0 8 Kazakhstan SYR DARYA CONTROLUNO. ARAL SEA 2001 0 64.5 Moldova HEALTH INVST FUND 2001 10 0 Poland RURAL DEVELOPMENT 2000 0 120 Romania HEALTH SECTOR REFORM 2000 0 40 Romania SOC SECT DEV (SSD) 2001 0 50 Tajikistan PRIM HEALTH CARE 2000 5.40 Latin America and the Caribbean Argentina AR-HEALTH INSURANCE FOR THE UNINSURED 2000 0 4.9 Argentina AR-PUB. HLTH. SURV. & DISEASE CONTROL 2000 0 52.5 Argentina AR INDIGENOUS COMMUNITY DEVELOPMENT LIL 2001 0 5 Argentina AR-Second Secondary Education Project 2001 0 57 Barbados CARIBBEAN HIV/AIDS I-BARBADOS 2001 0 15.1 Bolivia BO-Health Sector Reform APL 11 2001 35 0 Bolivia INDIGENOUS PEOPLES DEVELOPMENT PROJECT 2001 5 0 Brazil NE Microfinance Development 2000 0 50 Brazil PROSANEAR 2 2000 0 30.3 Brazil BR-BA BASIC EDU PROJECT (PHASE I) 2001 0 69.6 Brazil Rural Poverty Reduction Project - CE 2001 0 37.5 Brazil Rural Poverty Reduction Project - PE 2001 0 30.1 Brazil RURAL POVERTY REDUCTION PROJECT - PI 2001 0 22.5 Brazil Rural Poverty Reduction Project - BA 2001 0 54.3 Brazil BR-C EARA BASIC EDUCATION 2001 0 90 Brazil LAND-BASED POVERTY ALLEVIATION I 2001 0 202.1 Caribbean Caribbean Reg. Initiative HIV/AIDS-Do 2001 0 25 Colombia CO RURAL EDUCATION 2000 0 20 Colombia CARTAGENA WATER SUPPLY & SEWERAGE ENVIRO 2000 0 85 Colombia CO COMMUNITY WORKS AND EMPLOYMENT PROJ. 2000 0 100 Colombia CO-Human Capital Prot. - Cash Transfers 2001 0 150 Ecuador Rural Water Supply & Sanitation 2001 0 32 Guatemala GT-UNIVERSALIZATION OF BASIC EDUCATION 2001 0 62.2 Honduras EMERG DISASTER MGMT 2000 10.8 0 Honduras HN-COMMUNITY-BASED EDUCATION PROJECT 2001 41.5 0 Honduras HN-FIFTH SOCIAL INVESTMENT FUND PROJECT 2001 60 0 Honduras Access to Land Pilot (PACTA) 2001 8 0 Mexico RURAL DEV.MARG.ARII 2000 0 55 Mexico MX GENDER (LIL) 2000 0 3.1 Mexico MX: IIl BASIC HEALTH CARE PROJECT 2001 0 350 Nicaragua NI/SECOND BASIC EDUCATION PROJECT 2000 52.5 0 Nicaragua NI-Poverty Red. & Local Dev. FISE 2001 60 0 Panama PA-BASIC EDUCATION 11 2001 0 35 Peru HEALTH REFORM PROGRAM 2000 0 80 Peru Indigenous Peoples Development 2000 0 5 Peru SECOND RURAL ROADS PROJECT 2001 0 50 St. Lucia POVERTY REDUCTION FUND 2000 1.5 1.5 Uruguay APL OSE MOD & REHAB. 2000 0 27 Venezuela VE-CARACAS METROPOLITAN HEALTH 2001 0 30.3 58 ANNEX D IDA O'RD Country Project Name FY (US$ mil.) (US$ mul.) Middle East and North Africa Iran TEHRAN SEWERAGE 2000 0 145 Iran IR-2nd Primary Health Care & Nutrition 2000 0 87 Lebanor LB-GENERAL EDUCATION 2000 0 56.6 Lebanor Community Development Project 2001 0 20 Moroccco IRRIGATION BASED COMMUNITY DEVELOPMENT 2001 0 32.6 Yemen RY-CHILD DEVELOPMENT 2000 28.9 0 Yemen RY-Second Social Fund for Development 2000 75 0 Yemen RY-IRRIGATION IMPROVEMENT 2001 21.3 0 Yemen RURAL ACCESS IMPROVEMENT PROGRAM 2001 45 0 Yemen RY-RURAL WATER SUPPLY & SANITATION 2001 20 0 South Asia Banglade~sh Fourth Fisheries 2000 28 0 Bangladesh National Nutrition Program 2000 92 0 Bangladesh Microfinance II 2001 151 0 Bangladesh HIV/AIDS Prevention 2001 40 0 India RAJASTHAN DPIP 2000 100.5 0 India AP DPIP 2000 'll 0 India UP DPEP Ill 2000 182.4 0 India IMMUNIZATION STRENGTHENING PROJECT 2000 142.6 0 India UP Health Systems Development Project 2000 110 0 India KERALA RWSS 2001 65.5 0 India RAJ DPEP I 2001 74.4 0 India MP DPIP 2001 110.1 0 India KAR WSHD DEVELOPMENT 2001 100.4 0 India LEPROSY II 2001 30 0 Maldives' Ill EDUC &TRAIN. 2000 17 6 0 Nepal ROAD MAINTENANCE AND DEVELOPMENT 2000 54.5 0 Pakistan NWFP ON-FARM WATER MANAGEMENT PROJECT 2001 21.3 0 Sri Lanka North-East Irrigated Agriculture Project 2000 27 0 Sri Lanka LAND TIT. & REL.SERV (LIL) 2001 5 0 Sub-Saharan Africa Angola SECOND SOCIAL ACTION PROJECT (FAS II) 2000 33 0 Benin Labor Force Development Project 2000 5 0 Burkina Faso COMMUNITY-BASED RURAL DEVELOPMENT 2001 66.7 0 Burundi Bi-Bursap I1 2000 12 0 Cote d'Iioire ADULT LITERACY 2000 5 0 Eritrea HIV/AIDS, MALARIA, STDs & TB CONTROL 2001 40 0 Eritrea INTEGRATED EARLY CHILDHOOD PROJECT 2001 40 0 Ethiopia CONSERVATION OF MEDICINAL PLANTS 2001 2.6 0 Ghana COMMUNITY WATER II 2000 25 0 Ghana URBAN 5 2000 10.8 0 Ghana AGRIC SERVICES 2001 67 0 Guinea CAPACITY BUILDING SD 2000 19 0 Kenya Decentralized Repr. Health and H1V/AIDS 2001 50 0 Lesotho Community Development Support Project 2000 4.7 0 Madagascar Second Health Sector Support Project 2000 40 0 Madagascar MG-Rural Development Support Project 2001 89 0 Madagascar COMMUNITY DEVELOPMENT PROJECT 2001 110 0 Mali RURAL INFRASTRUCTURE 2000 115.1 0 Mali IMPROVING LEARNING IN PRIMARY SCHOOLS 2000 3.8 0 Mali EDUCATION SECTOR EXPENDITURE PROGRAM 2001 45 0 Mauritan a INTEG DEV PROG FOR I 2000 38.1 0 Nigeria SMALL TOWNS WATER 2000 5 0 Nigeria Community Based Poverty Reduction 2001 60 0 Rwanda AGRICULTURAL AND RURAL MARKET DEVELOPMENT 2000 5 0 Senegal Quality Education For All Program 2000 50 0 Senegal NATINFRAPROGRAM 2000 28.5 0 Senegal SOCIAL DEVELOPMENT FUND PROGRAM 2001 30 0 Sierra Leone COMMUNITY REINTEGRATION & REHAB PROJ (CRRP) 2000 25 0 Tanzania FIDP II 2000 27 5 0 Tanzania SOCIAL ACTION FUND PROJECT 2001 60 0 Uganda HIV/AIDS Control Project 2001 47.5 0 Zambia PUB SVC CAP (PSCAP) 2000 28 0 Zambia Social Investment Fund (ZAMSIF) 2000 64.7 0 Zimbabwe LAND REFORM 2000 5 0 ANNEX E 59 ANNEX E. POVERTY-FOCUSED ADJUSTMENT OPERATIONS, FISCAL YEARS 1992-2001 TABLE E-1 Poverty-focused adjustment lending, fiscal 1992-2001 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FYOO FYO 1 Poverty-focused adjustment lending 2,838.1 1,165.0 1,665.0 1,648.0 2,227.0 2,649.0 7,235.0 10,689.3 2,177.9 2,381.4 (US$ mil.) Total adjustment lending 5,847.3 5,252.6 2,867.5 5,324.3 4,509.4 5,085.7 11,289.2 15,327.7 5,107.7 5,762.8 Percentage of adjustment lending 49 22 58 31 49 52 64 70 43 41 Total no. of poverty-focused 18 6 20 14 17 18 16 36 12 18 adjustment operations Total no. of adjustment operations 32 23 28 30 30 30 37 48 23 30 Percentage of poverty-focused 56 26 71 47 57 60 43 75 52 60 adjustment operations IDA poverty-focused adjustment lending 1,168.1 645.0 875.0 598.0 1,027.0 689.0 630.0 1,238.7 595.0 1,262.6 (US$ mil.) IDA adjustment lending (US$ mil.) 2,152.3 1,422.6 1,997.5 1,069.3 1,679.4 947.7 1,354.2 1,390.5 681.6 1,825.7 Percentage of IDA adjustment lending 54 45 44 56 61 73 47 89 87 69 Total no. of IDA poverty-focused 10 3 11 9 13 9 9 20 7 12 adjustment operations Total no. of IDA adjustment operations 16 8 18 15 19 11 17 22 9 15 Percentage of IDA poverty-focused 63 38 61 60 68 82 53 91 78 80 adjustment operations Note: Adjustment operations include SALs, SECALs, PRCs, PSLs, RILs, and DRLs. For joint IBRD/IDA operations, the amount of lending is split between IBRD and IDA as stipulated in the loan/credit document, but it is counted only once, as an IBRD operation Source: World Bank. TABLE E-2A Poverty-focused adjustment operations lending by type, fiscal 2000 Total IDA IBRD SAUSAC lending ($ mil.) 1,632.4 595.0 1,037.4 Number of SALs/SACs 10 7 3 SECAUC lending ($ mil.) 505.1 0 505.1 Number of SECAUCs 1 0 1 PSUC lending ($ mil.) 40.4 0 40.4 Number of PSUCs 1 0 1 Total: Lending ($ mil.) 2,177.9 595.0 1,582.9 Number of loans/credits 12 7 5 60 ANNEX E TABLE E-2B Poverty-focused adjustment operations lending by type, fiscal 2001 Total IDA IBRD SAL/SAC lending ($ mil.) 1,665.7 782.6 883 1 Number Df SALs/SACs 11 8 3 SECAUC lending ($ mil.) 155.7 20.0 135 7 Number :f SECALUCs 3 1 2 PRSC lencing ($ mil.) 400.0 400.0 Number Df PRSCs 2 2 PSUC lerding ($ mil.) 160.0 60.0 100 0 Number Df PSUCs 2 1 1 Total: Lendirg ($ mil.) 2,381.4 1,262.6 1,118 8 Number of loans/credits 18 12 6 Note: SAL'SAC are Structural Adjustment Loans/Credits; SECAUC are Sectoral Adjustment Loans/Credits, PRSCs are Poverty Reduction Support Credits, PSUC are Programrratic Sector Loans/Credits. Source: Vorld Bank. ANNEX E 61 TABLE E-3 Poverty-focused components of adjustment operations, fiscal 2000-2001 Objectives Safety nets/ Tranche Reforming public Addressing Targeted release expendituresa distortionsb programsc conditionsd Fiscal 2000 Structural Adjustment Loans Burkina Faso: Third Structural Adjustment Credit' 4 Cambodia: Structural Adjustment Credit* Ecuador: Structural Adjustment Program 4 4 4 Guinea Bissau: Economic Rehabilitation and Recovery Credit' 4 4 s India: Uttar Pradesh Fiscal Reform and Public Sector Restructuring' 4 Mauritania: Fiscal Reform Support Operation' * Sierra Leone: Economic Rehabilitation and Recovery Credit' Tanzania: Programmatic Structural Adjustment Credit' 4 Turkey: Economic Reform Loan i i Zambia: Fiscal Sustainability Credit* 4 4 Sectoral Adjustment Loans Brazil: Second Social Security Special Sector Adjustment Loan 4 Programmatic Structural Adjustment Loans Latvia: Programmatic Structural Adjustment Loan 4 Total 9 0 6 6 Fiscal 2001 Structural Adjustment Loans Argentina: Provincial Reform Loan - Cordoba 4 4 4 Armenia: Fourth Structural Adjustment Credit 4 4 Benin: Public Expenditure Reform Adjustment Credit ' India: Karnataka Economic Restructuring* 4 Kenya: Economic and Public Sector Reform Credit' 4 4 Kyrgyz Republic: Consolidation Structural Adjustment Credit' 4 4 Malawi: Third Fiscal Restructuring and Deregulation Program' l 4 Mexico: Estado de Mexico Structural Adjustment Loan 4 Pakistan: Structural Adjustment Credit' 4 4 Sao Tome and Principe: Public Resource Management Credit 4 4 4 Tajikistan: Second Structural Adjustment Credit' 4 4 4 Sectoral Adjustment Loans Argentina: Provincial Reform Adjustment Loan - Catamarca 4 4 4 Bosnia-Herzegovina: Social Sector Adjustment Credit 4 4 Morocco: Information Infrastructure Sector Development Loan 4 4 4 Poverty Reduction Support Credits Uganda: Poverty Reduction Support Credit' , 4 Vietnam: Poverty Reduction Support Credit' 4 4 4 4 Programmatic Structural Adjustment Credits Bolivia: Programmatic Structural Adjustment Credit for Decentralization' 4 Peru: Programmatic Social Reform Loan 4 4 Total 14 10 8 8 'IDA credit a Supports the reallocation of public expenditures towards physical infrastructure and basic social services for the poor. Focuses specifically on reducing distortions that especially disadvantage the poor. 'Supports programs that provide safety nets or that target specific groups. Contains tranche release conditions related to poverty-focused measures. Source: World Bank. 62 ANNEX E TABLE E-4 List of poverty-focused adjustment operations, fiscal 2000-2001 IDA IBRD Country Project Name FY (US$ mil.) (US$ mii.) East Asia and the Pacific Cambcdia SAC - CAMBODIA 2000 30 0 Vietnam VIETI\AM - POVERTY REDUC.SUPPORT CREDIT 2001 250 0 Europe and Central Asia Armen a SAC 4 2001 50 0 Bosnia-Herzegovina SOSAC I 2001 20 0 Kyrgyz Republic CONSD SAC 2001 35 0 Latvia PSAL I 2000 0 40.4 Tajikistan SAC 2 2001 50 0 Turkey ERL 2000 0 759.6 Latin America and the Caribbean Argentina AR Catamarca Provncial Reform 2001 0 70.7 Argentina AR Cordoba PRL5 2001 0 303 Bolivia ANDCecentralization PSAC 2001 60 0 Brazil 2ND SOC SECURITY 2000 0 505.1 Ecuador EC-SAL 2000 0 151.5 Mexico MX Edo.de Mexico Structural Adjustm Loan 2001 0 505.7 Peru PE-Programmatic Social Reform Loan I 2001 0 '00 Middle East and North Africa Morocco MA-INFORMATION INFRASTRUCTURE SECTOR 2001 0 65 South Asia India UP FISCAL REFORM & PUBLIC SECTOR RESTRCT 2000 125 126.3 India KARN SAL I 2001 75 75 Pakistan Structural Adjustment Credit 2001 350 0 Sub-Saharan Africa Benin PERAC (Public Expend. Adjust. Credit) 2001 10 0 Burkina Faso SAC III 2000 25 0 Guinea-Eissau ECONOMIC REHABILITATION & RECOVERY CRDIT 2000 25 0 Kenya Economic & Public Sector Reform 2001 150 0 Malawi ADJUSTMENT (FRDP III) 2001 55.1 0 Mauritania FISCAL REFORM SUPPORT OPERATION 2000 30 0 Sao Tome and Principe ST-Public Resource Management 2001 7.5 0 Sierra Leone ECONOMIC REHAB, & RECOVERY (ERRC) 2000 30 0 Tanzania PSAC I 2000 190 0 Uganda UG PRSC 2001 150 0 Zambia FISCAL SUST ADJ CREDIT 2000 140 0 ANNEX F 63 ANNEX F. POVERTY-FOCUSED EMERGENCY RECOVERY OPERATIONS, FISCAL YEARS 1992-2001 TABLE F-1 Poverty-focused ERL lending, fiscal 1992-2001 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FYOO FYO1 Poverty-focused ERL lending (US$ mil.) 16.0 285.0 13.1 - 100.0 97.5 316.0 125.1 982.5 260.6 Total ERL lending 316.0 840.2 387.1 240.0 110.0 170.6 516.0 1,099.1 1,146.6 781.6 Percentage of ERL lending 5 34 3 - 91 57 61 11 86 33 Total number of poverty-focused ERLs 1 1 1 0 1 5 8 3 3 2 Total number of ERLs 3 8 3 4 3 8 9 11 7 5 Percentage of poverty-focused ERLs 33 13 33 - 33 63 89 27 43 40 IDA poverty-focused ERL lending (US$ mil.) 16.0 - 13.1 - - 97.5 101.0 14.0 - 260.6 IDA ERL lending (US$ mil.) 316.0 142.1 259.1 90.0 10.0 170.6 101.0 564.0 80.6 377.6 Percentage of IDA ERL lending 5 - 5 - - 57 100 2 - 69 Total number of IDA poverty-focused ERLs 1 - 1 - - 5 5 2 - 2 Total number of IDA ERLs 3 3 2 2 2 8 5 7 3 4 Percentage of IDA poverty-focused ERLs 33 - 50 - - 63 100 29 - 50 Source: World Bank. TABLE F-2 List of poverty-focused emergency recovery operations, fiscal 2000-2001 IDA IBRD Country Project Name FY (US$ mR.) (S$ mil.) Europe and Central Asia Turkey MARMARA EARTHQUAKE EMERGENCY RECONSTRUC. 2000 0 505 Turkey EMG. EARTHQUAKE RECOV. - EERL 2000 0 252.5 Latin America and the Caribbean Colombia EARTHQUAKE RECOVERY 2000 0 225 Sub-Saharan Africa Eritrea EMERGENCY RECONSTRUCTION 2001 90 0 Ethiopia Demobilization and Reintegration Project 2001 170.6 0 64 ANNEX G ANNEX G. ANNUM LENDiNG To SELECTED SECTORS, FIsCAL YEARs 1984-2001 TABLE G-1 Average lending to selected sectors, fiscal 1984-2001 FY84-86 FY87-89 FY90-92 FY93-95 FY96-98 FY99-01 World Bank (IBRD & IDA) lending (USS mil.) Human capital development 1,110.6 1,085.2 2,935.8 3,818.1 5,106.4 3 733.7 Education 826.1 765.2 1,688.6 2,005.9 1,997.2 937.4 Health, nutrition, & population 284.5 303.0 1,024.3 1,128.9 1,754.9 1,047.2 Social protection' - 17.0 222.9 683.3 1,354.2 1,749.0 Agriculture 3,942.0 3,649.6 3,210.9 2,888.8 2,746.9 1 852.1 Water supply & sanitation 686.1 758.6 965.3 1,056.2 621.4 791.4 Total Bank lending 15,435.1 19,420.5 21,697.6 22,351.2 23,017.6 20,507.5 As share of total Bank lending (percent) Human capital development 7 6 14 17 22 18 Agriculture 26 19 15 13 12 9 Water supply & sanitation 4 4 4 5 3 4 IDA lending (US$ mil.) Human capital development 450.6 471.9 1,464.1 1,737.6 1,877.8 1,554.5 Educaticn 298.1 308.2 748.3 787.0 734.6 472.0 Health, nutrition, & population 152.5 146.7 545.2 577.6 870.7 578.7 Social prDtectiona - 17.0 170.6 373.0 272.5 503.8 Agricultire 1,281.8 1,362.3 1,435.8 1,320.8 1,021.6 775.4 Water supply & sanitation 110.5 175.1 321.3 269.3 171.4 294.3 Total IDA lending (US$ mil.) 3,247.7 4,292.7 6,121.7 6,337.6 6,331.2 5,978.1 As share of total IDA lending (percent) Human capital development 14 11 24 27 30 26 Agriculture 39 32 23 21 16 13 Water supply & sanitation 3 4 5 4 3 5 Note: The data are for average annual lending during the three-year period indicated. The World Bank's fiscal year runs from July 1 of the previous year to June 30 of the year indicated. Three-year moving averages have been reported since the first Progress Report on Poverty in fiscal 1992 to smooth out year-to-year fluctuations. Because o0 a recent sector reclassification of projects, some numbers may differ from those reported in earlier tables. Note that these sectors do not account for all poverty-foiused lending; projects in such sectors as urban development and transport also have components designed to help reduce poverty. I Social prctection lending includes employment, social assistance, social insurance, and social investment funds. ANNEX G 65 TABLE G-2 Annual lending to selected sectors, fiscal 1992-2001 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FYOO FY01 World Bank (IBRD & IDA) lending (US$ mil.) Human capital development 2,715.4 4,034.3 3,241.0 4,179.1 5,028.6 3,473.5 6,817.0 5,125.6 2,561.0 3,514.4 Education 1,666.5 1,871.2 2,119.2 2,027.2 1,868.0 994.4 3,129.3 1,334.2 684.0 794.1 Health, nutrition, & population 922.1 1,378.6 885.7 1,122.5 2,353.4 920.4 1,990.9 1,106.8 987.0 1,047.8 Social protectiona 126.8 784.5 236.1 1,029.4 807.2 1,558.7 1,696.8 2,684.6 890.0 1,672.5 Agriculture 3,209.9 2,902.8 3,555.1 2,208.5 2,063.2 3,540.5 2,636.9 2,762.8 1,336.7 1,456.8 Water supply & sanitation 786.4 1,153.9 975.2 1,039.5 569.8 682.8 611.6 544.7 903.6 925.8 Total Banklending 21,705.7 23,695.9 20,836.0 22,521.8 21,312.2 19,146.7 28,594.0 28,995.7 15,276.3 17,250.6 As share of total Bank lending (percent) Human capital development 13 17 16 19 24 18 24 18 17 20 Agriculture 15 12 17 10 10 18 9 10 9 8 Water supply & sanitation 4 5 5 5 3 4 2 2 6 5 IDA lending (USS mil.) Human capital development 1,297.8 2,139.5 1,245.1 1,828.2 2,172.6 1,015.7 2,445.1 1,566.0 1,321.5 1,775.9 Education 561.3 970.2 619.3 771.6 747.2 255.1 1,201.5 534.8 468.7 412.5 Health, nutrition, & population 615.1 541.8 519.7 671.2 858.2 674.6 1,079.4 592.5 579.4 564.2 Social protectiona 121.4 627.5 106.1 385.4 567.2 86.0 164.2 438.7 273.4 799.2 Agriculture 1,219.2 1,084.0 1,523.3 1,355.2 1,108.5 719.4 1,236.9 975.1 568.1 782.9 Water supply & sanitation 297.4 395.4 103.2 309.2 80.7 302.4 131.0 253.9 109.7 519.3 Total IDA lending 6,549.7 6,751.4 6,592.1 5,669.2 6,864.1 4,621.8 7,507.8 6,813.3 4,357.5 6,763.5 As share of total IDA lending (percent) Human capital development 20 32 19 32 32 22 33 23 30 26 Agriculture 19 16 23 24 16 16 16 14 13 12 Water supply & sanitation 5 6 2 5 1 7 2 4 3 8 Note: The World Bank's fiscal year runs from July 1 of the previous year to June 30 of the year indicated. These sectors do not account for all poverty-focused lending; projects in such sectors as urban development and transport also have components designed to help reduce poverty. See World Bank Annual Report 1999 for further details on sector lending. Because of a recent sector reclassification of projects, some numbers may differ from those reported in earlier tables. a Social protection lending includes employment, social assistance, social insurance, and social investment funds. 66 ANNEXG FIGURE G-1 Trends in lending for human capital development, fiscal 1983-2001 6,000 + Human capital development D Education -4-- Health, nutrition, & population 5 106 5,000 Social protection 4,000 - : / 3 , 8 1 8 \ 3,734 23,000 - 2,000 /- .1 997 / 2,0 6 \ 1,749 1,111 1 085///5 1,047 1,000 /1 / >937 82676 / 8 , o 1 , 7 22 FY84-86 FY87-89 FY90-92 FY93-95 FY96-98 FY99-01 Fiscal Year ANNEX H 67 ANNEX H. HOUSEHOLD SURVEYAVAILABILITY BY REGION SUB-SAHARAN AFRICA No. of Year of most openly recent No. of Any accessible Fiscal Year of Demographic Population budget comparable surveys Year of most last Poverty and Health Country (millions)1 surveys23 surveys?3 data sets3 recent survey3 Assessment4 Surveys Angola 12 2 No 1 1995 - - Benin 6 3 - 1 1996 1994 1996 Botswana 2 1 - - 1985-86 - 1988 Burkina Faso 11 3 No 2 1998 - 1999 Burundi 7 3 No 2 1998 1999 1987 Cameroon 14 1 - 1 1996 1995 1998 Central African R. 3 2 No 1 1995-96 - 1994 Chad 7 2 No 1 1995-96 1998 1997 Congo, Dem. Rep. 48 2 - - 1990-91 - - Congo, Rep. 3 1 - - 1989 1997 - Cote D' Ivoire 14 7 Yes 4 1996 1997 1994 Eritrea 4 - - - - 1996 1995 Ethiopia 61 8 Yes 3 1998 1993 2000 Gabon 1 1 - - 1994 1997 2000 Gambia, The 1 4 Yes 4 1993-94 1993 - Ghana 18 5 Yes 5 1998 1995 1998 Guinea 7 2 - 2 1994-95 1997 1999 Guinea-Bissau 1 2 - 2 1993-94 1994 - Kenya 29 3 Yes 1 1997 1995 1998 Lesotho 2 3 Yes 1 1995 1996 - Liberia 3 - - - - - 1986 Madagascar 15 3 No 2 1999 1996 1997 Malawi 11 2 No 0 1992-93 1996 2000 Mali 11 3 No 3 1996 1993 2000 Mauritania 3 5 - 5 1995-96 1995 2000 Mauritius 1 2 - - 1991-92 1995 - Mozambique 17 2 - - 1997 1991 1997 Namibia 2 1 - - 1993-94 1993 2000 Niger 10 5 - 3 1996 1996 1998 Nigeria 121 7 Yes - 1996-97 1996 1999 Rwanda 8 4 - - 1998 1998 2000 Senegal 9 4 No 3 1996 1995 1999 Sierra Leone 5 2 - - 1994 1993 - Somalia 9 - - - - South Africa 41 3 Yes 3 1998 - 1998 Sudan 28 - - - - 1990 Tanzania 32 3 - 2 1993-94 1996 1996 Togo 4 2 - 1 1996 1996 1998 Uganda 21 7 Yes 3 1996 1993 2000 Zambia 10 6 Yes 5 1998 1995 2000 Zimbabwe 12 1 - 0 1990-91 1995 1999 ' Source of information: World Development Indicators 2000, World Bank. 2 Includes income and expenditure surveys, integrated household surveys and any other survey collecting income/consumption data. Source of information: 1998 Census of Household Surveys, World Bank and Africa Household Surveys Databank, World Bank, and Poverty Monitoring Database, World Bank. 4Source of information: Annex C. Source of information: Demographic and Health Surveys web site (http://vwvvvmeasuredhs.coml). Comments on the Africa table: 1. This listing of household surveys is not exhaustive, as many surveys are implemented without intervention from the Bank. Moreover, the 1998 Census of Household Surveys was not able to collect any information on Eritrea, Liberia, Somalia, and Sudan. 2. For another six countries (Congo, Democratic Republic of Congo, Gabon, Mauritius, Mozambique, and Namibia), we have no information on whether the household surveys that were conducted collected any information on income and consumption. 3. For thirteen countries, the last survey recorded in the Poverty Monitoring database was conducted more than five years ago, before 1994. 4. Comparable surveys over time appear to be available for only ten countries. 68 ANNEX H EAST ASIA AND PACIFIC No. of Year of most openly recent No. of Any accessible Fiscal Year of Demographic Population budget comparable surveys Year of most last Poverty and .Health Country (millions) surveys23 surveys?3 data sets3 recent survey3 Assessment4 Surveys Cambodia 1 1 3 Yes 3 1999 2000 2000 China 1,239 Series Yes 0 1999 1992 - Indonesia 204 Series Yes 23 1999 1994 1997 Korea CR 23 - - - - Korea Rep 46 Series Yes All 2000 - - Laos 5 2 Yes 0 1997-98 1996 - Malaysia 22 Series Yes 2 1999 1991 - Mongol a 3 Series Yes 0 1999 1996 - Myanmar 44 1 No 0 1997 - - Papua New Guinea 5 2 No 1 1996-97 - - Philippires 75 Series Yes 6 1998 2000 1998 Thailand 61 Senes Yes All 1999 1997 1987 Vietnam 77 Series Yes 2 1998 2000 1997 Source of information: World Development Indicators 2000, World Bank 2 Includes income and expenditure surveys, integrated household surveys and any other survey collecting income/consumption data. I Source of information: 1 998 Census of Household Surveys, World Bank and Poverty Monitoring Database, World Bank. 4Source cf information: Annex C. I Source of information: Demographic and Health Surveys web site (http://wvvw.measuredhs com/). Comments: 1. Except for the Democratic Republic of Korea (North Korea) some survey data with information on income and/or consumption exist for all other countries in the region, covering 990/o of the population. 2. Comparable surveys exist for at least 10 of the 13 countries (Including China), covering 96% of the regions population. Excluding China from the count, comparable surveys exist for 88% of the population. 3. Open access to survey data is keeps being problematic. There appears to be open access to survey data for 8 countries-Cambodia, Indonesia, Malaysia ionly for the 1976 and the 1988 Malaysian Family Life Survey conducted by RAND), Papua New Guinea, the Philippines, South Korea, Thailand, and Vietnam, accounting for only 27% of the region's population. ANNEX H 69 EUROPE AND CENTRAL ASIA No. of Year of most openly recent No. of Any accessible Fiscal Year of Demographic Population budget comparable surveys Year of most last Poverty and Health Country (millions)' surveys2W3 surveys?3 data sets3 recent survey3 Assessment4 Survey' Albania 3 4 No 1 1997 1997 - Armenia 4 Series Yes 3 1998-99 1999 2000 Azerbaijan 8 2 No 1 1999 1997 - Belarus 10 6 Yes - 1998 1996 Bosnia and Herzegovina 4 1 Yes 1 1997 - Bulgaria 8 Series Yes 1 1999 1999 Croatia 5 Series - All 1999 - Czech Republic 10 3 Yes - 1996 - - Estonia 1 3 Yes 1 1998 1996 - Georgia 5 2 - 1 1999 1999 - Hungary 10 Series Yes 0 1997 1996 - Kazakhstan 16 1 No 0 1996 1998 1999 Kyrgyz Republic 5 5 Yes 1 1998 1999 1997 Latvia 2 2 - 1 1997-98 2000 - Lithuania 4 3 Yes 1 2000 - - Macedonia, FYR 2 8 Yes 7 1997 1999 - Moldova 4 3 - 1 1999 2000 - Poland 39 Series Yes 1 1998 1995 - Romania 23 2 Yes 0 1998 1997 - Russian Federation 147 2 Yes 2 1994-98 1999 - Slovak Republic 5 2 Yes 1 1997 - - Tajikistan 6 1 No 1 1999 2000 - Turkey 63 3 Yes 0 1998 2000 1998 Turkmenistan 5 2 Yes 0 1998 - 2000 Ukraine 50 3 Yes 2 1999 1996 - Uzbekistan 24 1 No - 2000 - 1996 Yugoslavia, FR 11 - - - ' Source of information: World Development Indicators 2000, World Bank. 2 Includes income and expenditure surveys, integrated household surveys and any other survey collecting income/consumption data. 3Source of information: 1998 Census of Household Surveys, World Bank, Poverty Monitoring Database, World Bank, and World Bank (2000) Making Transition Work for Everyone: Poverty and Inequality in Europe and Central Asia, Appendix B: Data Sources. 4 Source of information: Annex C. I Source of information: Demographic and Health Surveys web site (http://www.measuredhs.coml). Comments: 1. The 1998 Census of Household Surveys was not able to collect any information on surveys in Yugoslavia. 2. Comparability between surveys is a matter of concern. 3. As in other regions, open access to survey data is rather problematic. Some data is openly accessible for about two-thirds of the countries in the region (18 out of 27). 70 ANNEXH LATIN AMERICA AND CARIBBEAN No. of Year cof most openly recent No. of Any accessible Fiscal Year of Demographic Population budget comparable surveys Year of most last Poverty and Health Country (millions)' surveys2 3 surveys?3 data sets3 recentsurvey3 AssessmenP Survey' Argentina 36 Series Yes 30 1999 2000 - Bolivia 8 Series Yes 6 1999 1996 1997 Brazil 166 Series Yes All 1999 1995 1996 Chile 15 Series Yes - 1998 1998 - Colomb a 41 Series Yes - 1998 1995 200 Costa Rica 4 Series Yes 1 1999 1997 - Cuba 11 - - - - - - Dominican Rep. 8 Series Yes - 2000 1995 1996 Ecuador 12 Series Yes 2 1998-99 1996 1987 El Salvaclor 6 Series Yes - 1998 1994 1985 Guatemala 11 3 Yes - 1998-99 1995 1937 Haiti 8 1 No 0 1995 1999 2000 Honduras 6 Series Yes - 1999 1995 - Jamaica 3 Series Yes All 1999 1994 - Mexico 96 Series Yes - 2000 1991 1987 Nicaragua 5 3 Yes 2 1999 1995 1998 Panama 3 6 Yes 1 1997 1999 - Paraguay 5 Series Yes All 1999 1994 1990 Peru 25 Series Yes 8 2000 1999 2000 Trinidad and Tobago 1 2 Yes 0 1998 1996 1987 Uruguay 3 Series Yes - 2000 1993 - Venezue a, RB 23 Series Yes 0 1998 1991 I Source of information: World Development Indicators 2000, World Bank. 2 Includes income and expenditure surveys, integrated household surveys and any other survey collecting income/consumption data. I Source of information: 1998 Census of Household Surveys, World Bank and Latin America and the Caribbean Inventory of Household Surveys, World Bank. 4 Source of information: Annex C. I Source of information: Demographic and Health Surveys web site (http//vwvvwmeasuredhs.coml). Comments: 1. For only one country in the region (Cuba), the Census has no information. 2. Open access to survey data is very infrequent. Data is openly accessible for about one-third of the countries in the region (8 out of 22). ANNEX H 71 MIDDLE EAST AND NORTH AFRICA No. of Year of most openly recent No. of Any accessible Fiscal Year of Demographic Population budget comparable surveys Year of most last Poverty and Health Country (millions)' surveys2,3 surveys?3 data sets3 recent survey3 Assessment' SurveyV Algeria 30 2 No 0 1995 1999 - Egypt, Arab Rep. 61 6 Yes 1 1997 1992 2000 Iran, Islamic Rep. 62 1 - 0 1994-95 - - Iraq 22 - - - - - - Jordan 5 7 Yes 0 1997 1995 1997 Lebanon 4 3 Yes 0 1997 - - Libya 5 1 No 0 1992-93 - - Morocco 28 3 Yes 1 1998-99 1994 1995 Oman 2 1 No 0 1999-2000 - - Saudi Arabia 21 - - - Syrian Arab Rep. 15 - - - - - Tunisia 9 4 Yes 0 1995-96 1996 1988 West Bank and Gaza 3 4 Yes 3 1998 - - Yemen, Rep. 17 3 Yes 1 1998 1996 1991 1 Source of information: World Development Indicators 2000, World Bank. 2 Includes income and expenditure surveys, integrated household surveys and any other survey collecting income/consumption data. 3 Source of information: 1998 Census of Household Surveys, World Bank and Poverty Monitoring Database, World Bank. I Source of information: Annex C. S Source of information: Demographic and Health Surveys web site (http://wwwmeasuredhs.com/). Comments: 1. The 1998 Census of Household Surveys was not able to collect any information on three countries (Iraq, Saudi Arabia, Syria). 2. Only West Bank and Gaza has openly accessible data; in Yemen only the 1998 Household Budget Survey is publicly accessible. 3. While none of the Egyptian data from the official statistical agency (CAPMAS) are available to the public, there is one data set from an IFPRI survey in Egypt that is openly accessible. SOUTH ASIA No. of Year of most openly recent No. of Any accessible Fiscal Year of Demographic Population budget comparable surveys Year of most last Poverty and Health Country (millions)' surveys23 surveys?3 data sets3 recent survey' Assessment4 Survey5 Afghanistan 25 - - - - - - Bangladesh 126 5 Yes 0 1995-96 1998 2000 India 980 Series Yes All 1998 2000 1999 Nepal 23 4 No 1 1995-96 1999 1996 Pakistan 132 8 Yes 4 1996-97 1996 1991 Sri Lanka 19 5 Yes 3 1996-97 1995 1987 Source of information: World Development Indicators 2000, World Bank. 2 Includes income and expenditure surveys, integrated household surveys and any other survey collecting income/consumption data. 3 Source of information: Census of Household Surveys, World Bank and Poverty Monitoring Database, World Bank. Source of information: Annex C. Source of information: Demographic and Health Surveys web site (http://wwwmeasuredhs.com/). Comments: 1. Five countries have at least one household survey with information on income and/or consumption. 2. Four of the six countries have surveys that are comparable, and in Nepal comparisons were carried out as well. 3. The 1998 Census of Household Surveys was not able to collect any information on surveys in Afghanistan. ANNEX I. ALIGNING SECTOR STRATEGIES TO THE WDR 2000/2001 AREAS OF ACTION z Pillars _ Opportunity Empowerment Security Sector Strategy Objectives Actions Objectives Actions Objectives Actions Reforming public More efficient * Careful attention to quality, More accountable, * Integration of institutions anc use of public timeliness, and relevance of efficient and effective governance concerns at strengthening resources PERs government through the national and sub- governance through * Greater integration of public decentralization of national level into improved public expenditure management decision-making and analysis of government expenditure into PE analys s and lending service delivery structure and functions analysis and management Improved service * Continued focus on reaching Growth, security, and * Greater attention to delivery and an appropriate role for the accountability through and upstream analysis more efficient public sector and on better access to timely, of institutional resource use privatization of public affordable and just environments, incentive through enterprise or contracting out dispute resolution and anti-corruption privatization and of public service delivery services strategies restructuring of where feasible * Deepening our public enterprises * Continued focus on knowledge base and and sectoral enhancing the accountability our partnership with institutions and efficiency of sector foundations and other building service delivery and donors working on regulatory institutions legal/judicial reform through internal reforms, the expansion of competitive service delivery where appropriate Improved * Greater support for accountability through organizations that other institutions collect, evaluate, and publicize data on poverty Strategy for the Improve the * Use of Financial Sector Providing quick support * Implementation of Special financial sector functioning of Assessment Program (FSAP) to governments dealing Financial Operations (SFO) financial sector aims at recognizing with financial distress in countries experiencing to enhance strengths, detect potential and crises financial crisis. The scope of financial stability weaknesses, and highlight SFO might be widened to and stimulate key developmental issues in cover potential private sector the financial sector vulnerabilities led-growth, one of the most important drivers of poverty reduction Improve access * Promotion of greater reliance Continuing to help to * Establishment of the World to financial on markets through removal develop new insurance Bank's Disaster markets for the of restrictions (e.g. interest instruments to mitigate Management Facility to poor rate ceilings) that hinders the natural disasters encourage disaster development of non-bank prevention and mitigation financial intermediaries that practices serve small depositors and * Development of insurance borrowers schemes providing the right * Strengthen the links with IFC financial incentives for ex- in providing delivery of ante disaster loss financial services to mitigation, such as institutions and creditworthy insurance to manage low-income individual and catastrophic risk small businesses (e.g. * Exploring new mechanisms through micro-finance to provide new types of institutions) market-based insurance products that are affordable to small farmers Integrating Improve women's * Review and modify legal and Assist member * Identify barriers that Reduce the vu nerability * Address the different life gender into the access to assets regulatory frameworks to countries in designing prevent women from of women in old age cycle experiences and needs World Bank's and services improve women's access to gender sensitive participating in and that arise out of their of men and women in work: a strategy assets and services policies and programs benefiting from public longer life expectancy pension reforms, workfare for action * Take institutional measures and fostering greater policies and programs and shorter history with programs and other forms to ensure that legal changes gender equity * Ensure effective formal labor markets of social protection are implemented in actual program delivery practice, with due regards to * Establish monitoring cultural sensitivity and evaluation mechanisms to measure progress Making Enhancethe * Undertake relevant studies Improve poor people's * Support community- Protect people's health * Promote markets-based sustainable livelihoods of the (e.g. access and use of access to natural based ecosystem and from environmental solutions to environmental commitments: an poor through natural resources, resource resources natural resource risks and pollution to health problems relevant environment improved natural degradation and management projects, reduce the disease for poverty reduction and strategy for the resource productivity, and their support participatory burden growth World Bank management linkages to poverty tenure and property * Support water supply and (NRM) to * Reflect economic, social, and right reform projects, sanitation, energy, and increase incomes ecological benefit in project promote institutional irrigation projects that have and enhance design reform focused on user specific environmental long-term * Integrate sustainable organizations health outcomes based on productivity ecosystem management integrated water resource objectives into infrastructures management and rural development projects z Pillars Opportunity Empowerment Security Sector Strategy Objectives Actions Objectives Actions Objectives Actions Reduce people's * Support community-based vulnerability to ecosystem service initiatives environmental risk, to reduce the impact of including moderate and flooding extrcme natural event * Build and strengthen early warning systems, including community-based systems for effective dissemination of information - Support vulnerability reduction investments, including adaptation in investment to climate change Social Protection Reduce systemic and * Systematic risk analysis at Sector Strategy: idiosyncratic risk the country level to better from safety net take account of and to springboard understand household risk management behavior * Analysis of the scale of public resources spent on formal safety nets and the number and socioeconomic profile of beneficiaries to allow reorientation of programs toward the poor - Planning of new operations in the area of AIDS prevention and mitigaton and adjusting existing projects to include actions in this field Increase market-based * Establishment of micro- social risk management savings mechanisms mechanisms * Testing new forms of insurance, e.g. saving accounts with withdrawal regulation associated with catastrophic or major expenditure needs Reduce gender biased * Assisting in the reform of violence and improve civil codes and their protection for women enforcement in order to and children improve protection for women and children * Exploration of methods to prevent harmful child labor, such as the combat of child trafficking, establishment a child labor fund, and adjustment of school calendar with agricultural cycle. Cities in Growth and * Legal and regulatory Accountability, * Clear frameworks for Safety and security, * Efficient national programs transition: World increased frameworks that support transparency, and intra- and including low levels of for targeted subsidies Bank urban and productivity of appropriate business integrity of local intergovernmental crime, violence, and (housing, food, transport), local government city output, incentives and impose government assignment and natural disasters unemployment insurance strategy broad-based minimal transaction costs delegation of functions, and welfare programs employment, * Public-private partnerships to responsibilities, investment, and identify market opportunities revenues, and trade in response and remove bottlenecks in expenditures to market developing land, infrastructure opportunities and cultural heritage assets * Land, real estate, and transport planning that supports spatially efficient land use and adequate supply of developed land for business and residential users * Rule of law and property right protected Local government * Mechanisms for Preservation of cultural * Environmentally and socially institutions sensitive to objective, independent heritage of urban areas balanced development of the needs of the poor review of local govern- and minimization of public transport and disadvantaged ment performance adverse effects on * Public and private residents and to * Good collaboration environment of commitment to respecting gender differences in among local transport and housing and preserving public areas, service requirements government agencies right-of-way, and cultural and informal institutions heritage, such as through such as community- participatory and market- based organization friendly land use planning * Homeless shelters and programs for street children Cost effective * Development and appli- fulfillment of local cation of management government service tools and best practices obligations * Regular public consul- tation and oversight in budget and local government decision- making processes * Incentive structures for public representatives and employees that encourage integrity and minimize corruption Edward A. Strudwicke 00803 IS'N THE WORLD BANK MC C3-301 WASHINGTON DC 1818 H Street, N.W. 1097 Washington, D.C. 20433 U.S.A. I Telephone: 202-477-1234I Internet: www.worldbank.org 9 7 35097 E-mail: feedback@worldbank.org ISBN 0-8213-5097-8