Evaluation of the Results of the Realignment

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Mar 2014
The Realignment defined four key goals to respond to a perceived loss of Bank relevance and presence in LAC: sharpening sector focus and expertise, sharpening country focus, strengthening risk- and results-based management, and enhancing institutional efficiency. To achieve these goals, it proposed adjustments to the Bank's structure, processes, and human resources and incentives which included, among other things, the introduction of a new matrix organization, the delegation of additional responsibilities to country offices and project team leaders, the updating of operational and corporate processes, and changes in staffing and HR policies. This evaluation concludes that the Realignment's underlying direction toward a matrix structure and greater decentralization were appropriate, but it has not yet achieved all of its objectives. There are several noteworthy trends on the positive side. The technical skills of Bank staff have improved, the capacity to generate and disseminate knowledge has increased, and more authority has been delegated to country representatives and team leaders, bringing IDB closer to the client. The collaboration between staff in the same sector in country offices and headquarters has increased, as has the continuity of project team membership over the project cycle. However, the matrix is not yet functioning well. VPC has limited authority and few mechanisms to coordinate Bank inputs at the country level to ensure delivery of a coherent and efficient program. VPS and VPP have limited opportunity or incentive to bring their knowledge and influence to bear in country strategy and programming. Sector silos are tall and the pressures to lend and disburse greater than ever. As a result, the Bank and its borrowing countries are not reaping the full potential gains from cross-matrix coordination and collaboration in country strategy and program formulation, project design and implementation, and knowledge sharing. Moreover, the evaluation did not find conclusive evidence of improved efficiency. Some processes (such as quality control at the project level) appear unnecessarily time-consuming and uncertain, and the lack of full cost accounting or binding budget constraints for task teams weakens incentives for the efficient use of resources. The report offers five broad recommendations: (i) to enhance country focus, further strengthen the country program management function in country offices; (ii) to enhance inter-VP coordination and country program coherence, strengthen the role of VPS and VPP in country strategy-setting and programming; (iii) To enhance development effectiveness, strengthen mechanisms for quality control of Bank operational products; (iv) to enhance efficiency, continue to strengthen budget processes and information systems to ensure full and accurate cost accounting; and, (v) to promote effectiveness and efficiency, fill a significantly higher share of management positions through transparent competitive processes. Under each recommendation the evaluation proposes specific measures Bank management should consider (among other options) to move in the directions recommended.