Project effectiveness and its determinants

Programme delivery

In contrast with the smooth development of the programme, project implementation has remained a source of concern throughout the period under review, as reflected by delays in project closure and under-disbursement of the original loan commitments.³

The first generation of IFAD projects (PIRDP to SSFCDIP) suffered from the same weaknesses as similar projects supported by other IFIs or bilateral donors (with the exception of the SFACP), notably difficulties in project start-up, lack of forward planning, slow release of funds, procurement problems, and cumbersome land acquisition. Recently, the Government has undertaken some procedural reforms.

The second generation of IFAD projects - Grameen Bank (GB) to Special Assistance for Cyclone Affected Rural Households (SACARH) - with the exception of the GB (Loan Nos. 161-BA and 239-BA), have suffered from start-up delays arising from protracted negotiations concerning bilateral agreements between NGOs and government institutions and banks. However, more recent efforts, together with the cooperating institution, have been instrumental in sorting out the negotiations.

Over the period 1984 - 1992 there has been a continuous decline of the average annual disbursement by project. This ratio decreased from SDR 1.8 million in 1984 to SDR 0.7 million in 1992, that is, 39% of the 1984 level. This is due to the combined effect of decreasing average loan size, change in the composition of the portfolio (higher incidence of multipurpose, poverty alleviation projects) and weak institutional capacities.

Rigidity in project design has reportedly been a constraint to smooth project implementation. Modifications to initial design may indeed be justified in order to respond adequately to changes in economic conditions and policies, target group priorities, or to correct errors in the original design. In fact, the problem is not the lack of flexibility but the late identification of the need for such modifications compounded by the generally slow response to requests for design modifications. The first problem is related among other factors to the infrequency of proper Mid-Term Evaluations (MTEs) that look critically at the relevance of project design in the light of implementation experience; while the second issue, i.e., the slow response, is due to the rigidity in budget allocation, particularly (but not exclusively) on the Government side.

Project management has been inadequate in most IFAD projects. Managers with authority, continuity, clarity in the line of command and motivation would have been more useful than layered committees. However, Bangladesh structures have nurtured more administrators than managers; while IFAD has helped projects with buildings, equipment, vehicles, overhead, as well as technical assistance and training, these benefits have been diluted through too frequent staff turnover.

Project Monitoring. Although systematically introduced into IFAD projects, the Monitoring and Evaluation (M&E) concept was not defined clearly enough by IFAD at the design stage; monitoring was often executed by implementing agencies at the headquarters level and used for their own information needs, but rarely used as a tool to help management in decision-making. Monitoring at the bebeneficiaries level has been found to be the most common weakness of the monitoring systems of government implementing agencies. Similarly, project evaluations were infrequently undertaken, which has made it difficult to assess project impact, but more importantly has deprived subsequent identification missions of the necessary feedback.

Project Organisational Models

Project institutional arrangements were generally found to be complex. In retrospect, the organisational structures which have been used to implement the projects can be grouped into three main models:

Model 1 consists of providing support to a single purpose agency, specialised in the major (or single) component of the project: these have involved support to the Bangladesh Krishi Bank (BKB) and the GB for credit projects; Bangladesh Agricultural Development Corporation (BADC) for a Fertilizer Secr Programme (FSP); and Bangladesh Water Development Board (BWDB) for FCDI projects. The strength of this model is that it provides, in principle, clear leadership, delivery efficiency and sustainability. Another feature of this model is that it is consistent with a centralised type of management; this is a constraint for area-based projects, but could be an advantage for nationwide programmes.

Its main weakness, mostly with regard to multi-component, area-based projects, is that the lead agency tends to overlook the components which are not under its direct authority, or to develop in itself the competence needed for those components; in this latter case the lead agency tends to evolve (financial resources permitting) towards a multi-purpose institution, instead of sub-contracting other agencies. This is also potentially the case for NGOs. For this model, contractual arrangements between participating agencies must therefore be part of project design if the projects are not to increase the risk of duplication of bureaucratic structures.

Model 2 consists of supporting one multi-purpose institution for multi-component projects. This was the case for the Bangladesh Rural Development Board (BRDB) in the execution of the two integrated rural development projects (SRDP and NRDP). This model allows for a wide coverage of areas, activities and target groups. Its weaknesses include an inadequate implementation effectiveness, difficulties in targeting, centralisation and competition/duplication with other specialised agencies in their respective fields of competence. Moreover, it is difficult for an emergent multi-purpose institution (e.g., BRDB in the early 1980s) to actually establish the required leadership. Layered coordination committees set up by the projects could not effectively compensate for the many weaknesses of this model.

Model 3 involves the coordination, at district level, of independent institutions (including NGOs); this decentralised model was developed for the second generation of IFAD projects. It gives - in principle - the possibility of increasing information concerning target group needs and priorities while ensuring target group participation. Its limitation lies in the lack of clear leadership, problems in coordination and a diluted institution-building effort. In addition, bilateral agreements between institutions often prove slow and difficult to establish.

Lessons and Recommendations

The evaluation found a significant relationship between the actual performance of individual projects and the type of organisational structures adopted for its implementation:

• the three credit projects, as well as the FSP, rank high, not only because they were fully disbursed in time, but also because they were generally targeted ^4/ and the technical, social and financial models were basically sound; these projects were organized along the lines of institutional Model 1;
• the new generation of on-going "innovative" projects (Loan Nos. 194, 237, 280 and 287) are well targeted and generally well designed technically, socially and financially; but they appear too ambitious (i.e., they experiment with too many innovations). At the same time, the design of organisation Model 3 was not precise enough and did not allow enough time for smooth implementation;
• the two rural development projects (Loan Nos. 073 and 110) which were prepared in the enthusiasm for the Integrated Rural Development Project (IRDP) development model in the early 1980s, suffered from the inefficiency of Model 2; and
• the two FCDI projects (Loan Nos. 009-BA and 137-BA) suffered from conceptual, design, and implementation problems, not primarily related to their organisational arrangements.

Project organisation arrangements should be based on the most effective-cum-participatory models. In the light of past experience this practically implies that GOB and IFAD should:

• select organisational model 1 (direct support to a specialised agency), when a project has a single purpose which is identical to the mandate/priorities of a given agency; and
• improve model 3 (coordination of existing independent agencies at district level) when a project is multi-purpose, covers the mandate of several institutions and/or involves NGOs; in all these cases, coordination should be ensured by an independent project manager and not by the lead agency.

It is an absolute requisite that the manager has control over the release of resources and the supervision of the progress of individual agencies' programmes; this means delegation of authority and a posteriori control; efficient monitoring is even more essential in this case.

Project managers are the key to success but generally lack adequate authority and managerial skills; in addition they are subject to a high turnover which greatly impinges on project performance. Their appointment should be transparent and based on merit. The function of project manager should be better recognised and given more authority. Government should also decide to reduce turnover of project managers and staff.

If GOB agrees on the necessity for an improved model 3 for efficient implementation of multipurpose projects that are oriented towards poverty alleviation, it might be led to recognise that identification and selection of new style project managers implies a major reform in administrative regulations on civil servants' careers. The principles of this reform are developed in the concluding chapter of this report and it is recommended that IFAD should assure GOB that it is ready to experiment with them in the framework of one of the new projects to be identified. This may help GOB, later on, in implementing administrative reforms on a larger scale.

NGO involvement was quite positive in ensuring access of the target group to project inputs and services. This approach should be conserved and further developed in future projects. Workable institutional arrangements for NGO participation as well as target group specifications should be clearly defined at the design stage.

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3/ The overall rate of disbursement on closed projects averaged 81%.

4/ This applies mainly to Grameen Bank activities.