Cooperation between the World Bank and NGOs FY96 Progress Report

Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Cooperation between the World Bank and NGOs FY96 Progress Report NGO Group Social Development Department August 1997

TABLE OF CONTENTS EXECUTIVE SUMMARY I. INTRODUCTION i II. OPERATIONAL COLLABORATION 1 Quantitative Summary of Bank-NGO Operational Collaboration 2 Regional trends 3 Sectoral trends 3 Nature of NGO involvement 5 Type of NGO 6 Effectiveness of NGO Involvement 7 Promoting Enhanced Bank-NGO Collaboration 9 Strengthened capacity for NGO liaison at the field level 9 Sharing lessons learned 11 NGO capacity-building initiatives 12 Social funds 13 Funding for NGOs and NGO-related activities 13 III. RESEARCH AND ANALYSIS 16 Country Assistance Strategies 17 Participatory Poverty Assessments 18 Sectoral Studies and Research 18 Environmental and Social Assessments 19 Joint Review of Structural Adjustment Programs 19 Study on NGO Involvement in Bank-supported Projects 20 NGO-State Relations 21 NGO Law 21 IV. POLICY DIALOGUE 22 Mr. Wolfensohn's Interactions with NGOs 22 Gender 22 Social Development 23 Participation 23 Environmentally Sustainable Development 24 Consultative Group on International Agricultural Research 24 Conversion of World Bank Operational Directives 25 Debt 25 Information Disclosure 25 NGO-World Bank Committee 26

ANNEXES List of Figures Figure 1 - Projects with NGO Involvement as a Percentage of Total Projects (FY73- FY96) Figure 2 - Projects with NGO Involvement as a Percentage of Total Projects Approved per Region (FY93-FY96) Figure 3 - Distribution of NGO-associated Projects by Sector (FY96) Figure 4 - Projects with NGO Involvement as a Percentage of Total Projects by Sector (FY90, 95 and 96) Figure 5 - Nature of NGO Involvement in Bank-financed Projects (FY96) Figure 6 - Type of NGOs Involved in Bank-financed Projects (FY92-FY96) List of Annexes 1. Project Summaries: Selected FY96 World Bank-financed Projects Involving NGOs 2. Case Studies: Impact of NGO Involvement in World Bank Financed Project 3. List of FY96 World Bank-financed Projects Involving NGOs 4. List of NGO-World Bank Committee Members, 1996 5. List of Resident Mission NGO Liaison Officers 6. Glossary

EXECUTIVE SUMMARY 1. This is the fourteenth annual progress report on cooperation between the World Bank and non-governmental organizations (NGOs) in the areas of operational collaboration, research and analysis and policy dialogue. The report is prepared annually by the Bank's coordinating office for Bank-NGO relations, the NGO Unit. The major functions of the Unit, in cooperation with staff in the regions and resident missions, include: i) facilitating operational collaboration between the Bank and NGOs (including monitoring collaboration and disseminating lessons learned); ii) promoting constructive Bank-NGO policy dialogue; iii) providing information to Bank staff about NGOs and NGO-related issues; iv) responding to requests for information from NGOs, and; v) helping foster a more positive policy environment for NGOs in developing countries. 2. Fiscal year 1996 (FY96) has been a significant one in terms of Bank-NGO relations. Important trends and developments have included: i) unprecedented interaction between the World Bank s president and NGOs, due to Mr. Wolfensohn s deep interest and support for civil society; ii) increased emphasis on liaison and operational collaboration with NGOs in developing countries (in particular, through the appointment of NGO liaison officers in World Bank resident missions); iii) mechanisms for more systematic policy dialogue between NGOs and the Bank; iv) greater emphasis on helping governments improve the policy environment for and strengthen their links with civil society (in particular through efforts to liberalize and make less arbitrary laws governing NGOs). Operational Collaboration 3. Of the 256 projects approved by the Board of the World Bank in FY96, a total of 122 (approximately 48%) included some provision for NGO involvement. This figure must be treated with some caution since NGO involvement is sometimes only minor, or limited to one small component of the project. That said, this figure indicates one of the highest levels of NGO involvement in Bank-financed projects since the Bank began monitoring these figures in 1973. Other indicators reveal a deepening of NGO involvement as well as an increase in the overall number of projects which include NGOs. 4. The highest levels of NGO collaboration took place in South Asia and Sub- Saharan Africa where, respectively, 76% and 56% of all projects approved included provisions for NGO involvement. Sectorally, levels of NGO involvement were highest in agriculture (92%) and social sector (88%) projects. As in previous years, NGO involvement was most frequent during the implementation (65%) and operation and maintenance (73%) stages of the project cycle. In 43% of cases, however, NGOs were also involved in project design. Among FY96 projects with NGO involvement, 53%

involved existing community-based organizations (CBOs), 16% involved newly created CBOs, 74% involved national in-country NGOs and 15% involved international NGOs. 5. To promote collaboration with NGOs, the Bank has strengthened NGO liaison at the field level. Thirty-four resident missions have now appointed a staff member whose principal responsibility is NGO liaison/collaboration and related social development, and most other resident missions have assigned part-time responsibilities for NGO liaison to an existing staff member. To improve operational cooperation, the Bank has also organized opportunities to share lessons learned, disseminated best practice on Bank- NGO collaboration, supported NGO capacity-building and continued to fund a number of mechanisms for making grants to NGOs. Research and Analysis 6. An important trend in recent years has been increased NGO involvement in Banksupported research and analytical work. The Bank's various forms of Economic and Sector Work (ESW) have allowed the institution both to broaden its knowledge of NGOs and to collaborate with NGOs in undertaking research on a broad range of development issues. In particular, NGOs have played an increasingly important role in the preparation of Country Assistance Strategies, national poverty assessments and project-level environmental and social assessments. These initiatives often offer new opportunities for government-civil society dialogue on important questions of development policy. During FY96, preparations began for carrying out a joint Bank-civil society review of structural adjustment programs. The Bank also began preparations for an evaluation of the operational impact of NGO involvement in Bank-financed projects and conducted a number of studies on issues related to NGO legislation and NGO-State relations. Policy Dialogue 7. In addition to collaborating with the Bank in operations and research, NGOs play an important role as advocates for policy change and institutional reform. The Bank increasingly exchanges information, ideas and experiences with NGOs and consults with NGOs on key issues of mutual concern. Important recent trends in policy dialogue have been i) increased emphasis on consultations with NGOs in developing countries and ii) the creation of structures for more systematic policy consultations with NGOs. Of particular note in FY96 was the creation of an External Gender Consultative Group and the formation of an NGO Focus Group to assist the work of the Bank's Social Development Task Force. In his first year as World Bank president, Mr. Wolfensohn engaged in an unprecedented level of interaction with NGOs, meeting on numerous occasions with both international and developing country NGOs to discuss, among others, issues related to gender, poverty, the environment and structural adjustment. Other key themes of Bank-NGO policy dialogue in FY96 included social development, popular participation, debt, and information disclosure. ii

I. INTRODUCTION 1. This is the fourteenth annual progress report on cooperation between the World Bank and nongovernmental organizations (NGOs). The report is prepared annually by the Bank's central coordinating office for Bank-NGO relations, the NGO Unit. 1 The major functions of the Unit, in cooperation with staff in the regions and resident missions, include: i) facilitating operational collaboration between the Bank and NGOs (including monitoring collaboration and disseminating lessons learned); ii) promoting constructive Bank-NGO policy dialogue; iii) providing information to Bank staff about NGOs and NGO-related issues; iv) responding to requests for information from NGOs, and; v) helping foster a more positive policy environment for NGOs in developing countries. 2 2. This report is intended to keep Bank management and staff, NGO representatives, government officials and other interested parties informed of trends, highlights and key developments in Bank-NGO relations. This report covers the period from July 1995 to July 1996 (the Bank's fiscal year 1996). 3 Three key aspects of Bank-NGO relations are reviewed: operational collaboration, NGO involvement in research and analysis, and policy dialogue. 3. Fiscal year 1996 has been a significant one in terms of Bank-NGO relations. Among others, the four following trends stand out as important and path-breaking: i) unprecedented interaction between the World Bank s president and NGOs, due to Mr. Wolfensohn s deep interest and support for civil society; ii) increased emphasis on liaison and operational collaboration with NGOs in developing countries (in particular, through the appointment by key regions of NGO liaison officers in World Bank resident missions); iii) mechanisms for more systematic policy dialogue between NGOs and the Bank; iv) greater emphasis on helping governments improve the policy environment for and strengthen their links with civil society (in particular through efforts to liberalize and make less arbitrary laws governing NGOs). 1 The NGO Unit is currently within the Participation and NGO Group, located in the Poverty and Social Policy (PSP) Department of the Human Capital Development Vice Presidency (HCDVP). 2 For more information concerning the ongoing activities of the NGO Unit and Bank-NGO relations more generally, see The World Bank's Partnership with Nongovernmental Organizations, published by the NGO Unit in May 1996. 3 Last year's Progress Report (for FY95) was published in conjunction with a paper which examined NGO- Bank relations more generally and provided recommendations to strengthen and facilitate the evolving relationship between NGOs and the Bank. This paper was submitted to the board of the World Bank in June 1996.

II. OPERATIONAL COLLABORATION 4. Operational collaboration represents the foundation of NGO-Bank relations. While the Bank's primary partners continue to be borrowing governments, NGOs are increasingly involved in the identification, design, implementation and evaluation of Bank-financed activities. The Bank s experience indicates the benefits of government-ngo-bank collaboration, in particular, when initiated upstream in the project process. Over recent years, as the incidence of operational partnership has risen steeply, it has become increasingly evident that such partnerships can improve beneficiary participation and project sustainability and help to ensure that project objectives respond to beneficiary needs. Quantitative Summary of Bank-NGO Operational Collaboration in FY96 4 5. Of the 256 projects approved by the Board of the World Bank in FY96, a total of 122 (approximately 48%) included some provision for NGO involvement. 5 This figure must be treated with some caution since the projected NGO involvement is sometimes only minor or limited to one small component of the project. That said, this figure does represent one of the highest levels of NGO involvement in Bank-financed projects ever recorded. From FY73-FY88, NGOs were involved, on average, in only 6% of Bankfinanced projects. Since FY89 there has been a steady rise in levels of NGO involvement. This increase can be attributed to the Bank's growing emphasis on promoting participatory development, its continued efforts to promote outreach and collaboration with NGOs, and the relatively high number of projects approved in those sectors in which NGOs are most active (e.g. agriculture, education, health and social development). 4 The statistics used in this section are derived from Staff Appraisal Reports (SARs), which indicate the intended involvement of NGOs, but from which the actual scope, depth and quality of involvement on the ground are difficult to discern. The statistics provide a useful picture of overall trends overall trends and progress over time, but include projects where NGO involvement is very slight as well as those based on a more profound partnership. 5 These projects are listed in Annex 2. 2

Figure 1. Projects with NGO Involvement as a Percentage of Total Projects, FY73-96 60 50 Percentage 40 30 20 10 0 1973-88 1989 1990 1991 1992 1993 1994 1995 1996 Fiscal Year a) Regional trends 6. Figure 2 shows the percentage of projects with NGO involvement by region. As in previous years, the highest levels of NGO collaboration in FY96 were in South Asia, Africa and Latin America and the Caribbean (LAC) where, respectively, 76%, 55% and 48% of all projects approved included provisions for NGO involvement. Also of note, is the substantial increase in the percentage of NGO-associated projects in Europe and Central Asia (ECA) and Middle East and North Africa (MENA), regions which have been characterized by relatively low levels of NGO involvement in the past. b) Sectoral trends 7. The sectoral distribution of projects with NGO involvement in FY96 has remained consistent over the past several years, with the majority of NGO-associated projects being in the agriculture, education, health and social sectors. In FY96, these four sectors accounted for over 60% of all NGO-associated projects. A full sectoral breakdown of FY96 NGO-associated projects is illustrated in Figure 3. 3

Figure 2. Projects with NGO Involvement as a Percentage of Total Projects Approved per Region, FY93-96 Percentage 80 70 60 50 40 30 20 10 FY93 FY94 FY95 FY96 0 AFR EAP SAS ECA LAC MENA Region Figure 3. Distribution of NGO-associated Projects by Sector, FY96 Agriculture 28% Education 12% Elec. Power 3% Water Supply 5% Environment 3% Finance 2% Industry 1% Urban Development 6% Mining 4% Multisector 6% Transportation 4% Social 11% PSM 3% PHN 11% Oil & Gas 1% 8. Another important measure is the number of projects with NGO involvement as a percentage of total projects approved by sector. Figure 4 shows that 90% of all agriculture projects and 82% of all social sector projects approved in FY96 had provisions for NGO involvement. 4

Figure 4. NGO-involved Operations as a Percentage of Operations Approved per Sector, FY90-96 Water supply & sanitation Urban development Transportation Social sector Public sector management Electric power & other energy Population, health, & nutrition Multisector FY96 FY95 FY90 Mining & other extractive Industry Finance Environment Education Agriculture 0 10 20 30 40 50 60 70 80 90 Percentage c) Nature of NGO involvement 9. Figure 5 illustrates a breakdown of different forms of NGO involvement, which correspond roughly to the various stages of the project cycle. Traditionally, NGO involvement has been most significant during project implementation and maintenance stages. This remains true in FY96. In recent years, increasing emphasis has been placed on the importance of involving NGOs early on in the project cycle, thus giving them greater opportunity to influence project objectives and design, and allowing them to participate in defining the terms of NGO involvement later on in the project cycle. Figure 5 shows that a significant number of NGO-associated projects (42%) involved NGOs during design phases. 5

Figure 5. Nature of NGO Involvement in Bank-financed Projects (FY96) 90 80 70 60 Percentage 50 40 30 20 10 0 Identification Design,planning Research Implementation Operation and maintenance Evaluation Training Co-financing Function d) Type of NGO 10. Since the late 1980s, the Bank has placed emphasis on engaging local-level NGOs in the activities it finances. These organizations often have an in-depth understanding of local conditions, as well as local language skills and first-hand knowledge about the needs and interests of poor communities. Cooperation with developing country NGOs, both at the national and grassroots level has increased steadily in recent years. As shown in Figure 6, among FY96 projects with NGO involvement, 53% involved existing community-based organizations (CBOs), 16% involved newly created CBOs, 74% involved national incountry NGOs and 15% involved international NGOs. 6

Figure 6. Type of NGOs Involved in Bank-financed Operations, FY91-96 Number of Operations 90 80 70 60 50 40 30 20 10 CBOs National International Unclassified 0 1991 1992 1993 1994 1995 1996 Fiscal Year Impact of NGO Involvement on Bank-financed Projects 11. The increasing involvement of NGOs in Bank projects, illustrated in the preceding sections, reflects a growing desire for partnership with organizations which work at the community level. While the Bank has long tabulated statistics regarding the extent of NGO involvement, only recently has it been possible to analyze evidence as to whether such involvement can be associated with better (or worse) project performance. This new evidence reveals a strong correlation between project performance and NGO involvement in sectors where NGO involvement has been historically more prevalent. 12. Each year the Bank s Annual Report on Portfolio Performance (ARPP) provides performance ratings based on Implementation progress (IP), Development Objectives (DO) and projects at risk categories. 6 These statistics for the end of FY96 were correlated with NGO involvement in projects. Out of a total of 1,752 projects under implementation, 606 projects involved NGOs in some capacity, while 1,146 did not. For the portfolio as a whole, the analysis showed that projects involving NGOs were somewhat less likely to have unsatisfactory ratings in meeting development objectives, or to be found at risk (see Table 1. a). 6 The ARPP s performance ratings are designed to track the development effectiveness of Bank projects by flagging those projects with existing or potential problems in implementation. Projects are regularly rated on performance in implementation progress (IP), meeting development objectives (DO), and as potential problem projects. The at risk rating, is the aggregate of the IP, DO and potential problem projects, listed as a percentage. 7

Table 1. a Performance Ratings for Problem Projects with and without NGO Involvement Performance Rating with NGO involvement with no NGO involvement Implementation Progress 16% 16% Development Objectives 9% 12% projects at risk 30% 36% 13. Traditionally, NGOs are involved in Bank activities in two ways: i) to provide services or to implement project components for which they have a comparative advantage in technical skills or local knowledge, or ii) to mitigate negative aspects of the project associated with risks, or play an advocacy role. In the first case, the involvement of NGOs would be expected to contribute to project effectiveness, where as in the second, the involvement of NGOs is more likely to occur with riskier projects. 14. In sectors where NGO involvement is traditionally high - Agriculture, Population- Health and Nutrition (PHN) and Social - for the most sensitive at risk rating, NGOinvolved projects consistently out-perform projects without involvement of NGOs. (see Table 1. b) Taken together, projects without NGO involvement in these sectors are significantly more likely to be at risk as those with NGO involvement (46% to 27%). Table 1. b Projects at Risk By Sector Project Type with NGO involvement no NGO involvement AGR PHN SOC Total 27% 30% 23% 27% 48% 40% 38% 46% 15. Further this pattern holds for Agriculture and PHN in virtually in each region, with the exception of PHN in South Asia (SA) and LAC. That is, within each region, projects with NGO involvement in the agriculture and PHN sectors appear to fare as well or better than projects without any NGO involvement (see Table 1. c). For projects in the social sector, the pattern appears to be misled - but this is because of the small sample, due to the small number of projects with performance problems in this sector. 16. In the sectors of Industry, Oil and Gas, Mining, Pollution Control, Urban Development and Privatization, NGO involvement appears to be associated with higher project risk. However, it is postulated that NGOs are involved in such projects precisely because of the risk associated with implementation. 8

Table 1. c Percentages of Projects at Risk by Sector and Region Project AFR ECA EAP Type AGR PHN SOC AGR PHN SOC AGR PHN SOC with NGO 28% 43% 33% 22% 0% 14% 12% 8% 0% involvement no NGO involvement 59% 67% 67% 67% 43% 33% 15% 11% 0% Project LAC MNA SAS Type AGR PHN SOC AGR PHN SOC AGR PHN SOC with NGO 36% 40% 23% 36% 0% 0% 28% 25% 100% involvement no NGO involvement 62% 38% 0% 48% 56% 0% 37% 0% 0% 17. In sectors that utilize NGO expertise in public awareness, training, technical assistance, and management at the local level - there appears to be a positive correlation between NGO involvement and project performance. The ratings show that projects involving NGOs in Forestry, Urban and Rural Water Supply and Sanitation, Housing, Transportation, Irrigation and Drainage, and Solid Waste Management, out perform projects that do not utilize NGO expertise. 18. Clearly a multitude of factors influence the ARPP ratings, but the consistent positive trends noted above, support the basic assumptions concerning the value of involving NGOs in Bank activities, and indicate the need for further research. Promoting Enhanced Bank-NGO Collaboration 19. To promote enhanced collaboration with NGOs, the Bank has strengthened NGO liaison at the field level, organized opportunities for the Bank and NGOs to share lessons learned, disseminated best practice on Bank-NGO collaboration and supported NGO capacity-building. The Bank also continues to fund a number of mechanisms for making grants to NGOs. a) Strengthened capacity for NGO liaison at the field level 20. An important development in FY96 was the appointment of NGO liaison officers/participation specialists in a large number of World Bank resident missions (RMs). In the two Asia regions, some RMs already had social development staff dealing with issues including NGOs. During FY96, new full-time NGO/participation posts were created in each Latin American RM and most African RMs appointed full or part-time NGO liaison officers. A number of RMs in Europe and Central Asia have very recently assigned part-time NGO liaison tasks to existing staff. Thirty-four RMs now have a staff whose 9

primary responsibility is NGO liaison and approximately 15 other RMs have assigned NGO responsibilities to existing staff. 21. While the specific terms of reference of these new staff members varies from country to country, key NGO liaison functions include: serving as a point of contact for NGOs and other civil society organizations; gathering and maintaining information about the NGO sector; disseminating information on Bank activities; facilitating policy dialogue between NGOs, the Bank and government; promoting and supporting NGO involvement in the Bank's research, analysis and lending programs; promoting participatory techniques, and; working with government to ensure an enabling environment for NGOs. 22. Creation of these posts has served to improve information flows between the Bank and NGOs and to ensure more systematic in-country consultation and dialogue. Many resident missions now hold regular meetings with NGOs on a variety of sectoral issues and a growing number of RMs have established Public Information Centers (PICs) or improved mechanisms for information dissemination. 7 Regular reports submitted by NGO liaison officers help to keep Bank staff in headquarters informed of issues, initiatives and activities at the field level. During FY96, a number of in-country operational workshops on NGO involvement in the project cycle were held, for example, in Bangladesh, India and Indonesia. In a number of countries, NGO liaison officers have also carried out NGO sector assessments, facilitated NGO participation in the preparation of Country Assistance Strategies, and contributed advice and assistance in the drafting of NGO legislation. 7 23. Another trend in recent years has been the growing number of in-country, projectspecific consultations with NGOs (normally organized by project staff in conjunction with the RM). For example, during FY96 a series of meetings at the local level regarding resettlement compensation and the future of resettled groups were held in the context of the India Coal Sector Social Mitigation Project. In Bangladesh, a number of meetings were organized with NGOs and other stakeholders to discuss the Flood Action Program. In Brazil, in June 1996, a Mid-Term Review Evaluation workshop, involving government, donor and NGO representatives was held to discuss the future of the complex and problematic PLANAFLORO project in the state of Rondonia. The workshop led to a successful negotiating process between the state government and local NGOs which will allow for a complete re-structuring of the project, making it more decentralized and demand-driven and increasing NGO participation in decision-making. 7 Refer to paragraph 62 for more information on Information Disclosure. 10

b) Sharing lessons learned 24. Bank-NGO operational collaboration continues to present many challenges. In order to learn from past experience and to enhance future collaborations, the Bank continually seeks to gather and disseminate lessons learned and to create opportunities for exchanges with NGOs on operational issues. 25. For example, during FY96, the World Bank-NGO Alliance on Children was established to explore opportunities for Bank-NGO operational collaboration in sectors concerning children's well-being. The Alliance, made up of representatives from four major international NGOs concentrating on children's issues and relevant Bank staff, met for the first time in December 1995 and will continue to meet on a periodic basis to explore ways in which NGOs and the Bank can work together to address issues such as early childhood development, HIV/AIDS and girls' education. 26. The majority of Global Environment Facility (GEF) projects implemented by the Bank involve NGOs and a number include grant components for NGOs. 8 During FY96, a series of meetings were held with NGO representatives to discuss guidelines of GEF Bankimplemented projects and to seek ways of promoting NGO collaboration. An in-depth study of the use of social assessment in three Bank-GEF biodiversity projects was completed in FY96 9 and a review of stakeholder identification and participation in the GEF portfolio was conducted. The findings of this review, which reported an increase in upstream NGO involvement and increased use of local-level small grants facilities, have contributed to dialogue with NGOs and to the development of good practice pointers. 27. In April 1996, a two-day workshop was organized jointly by the World Bank office in Paris and Coordination Sud (a coalition of French development NGOs) bringing together Bank staff and NGOs to share information regarding operational collaboration and, in particular, to critically examine a number of examples of previous and on-going Bank-NGO partnerships in order to identify challenges, benefits and lessons learned. A number of background papers and case-studies were prepared by Bank staff and NGO participants for this purpose. 28. In June 1996, a paper entitled NGOs and the Bank was published by the NGO Unit and distributed to the Board. It examines the evolution of the NGO phenomenon with regards to the Bank, and explores how the current relationship could be strengthened regarding both operational collaboration and dialogue on policy issues. The paper also incorporated the FY95 progress report. Also in June 1996, the NGO Unit published a 8 Examples of FY96 GEF projects with NGO involvement include: the West Africa Community-Based Natural Resource and Wildlife Management Project; the Mauritius Biodiversity Restoration Project, and; the (global) Small and Medium Scale Enterprise Fund. 9 This study, entitled Social Assessment in World Bank and GEF-Funded Biodiversity Conservation Projects: Case Studies from India, Ecuador and Ghana, is available from the Social Policy and Resettlement Division of the Environment Department 11

working paper entitled NGO-World Bank Partnerships: A Tale of Two Projects. This report examines the experience of NGO involvement in two Bank-financed projects, the Program for the Alleviation of Poverty and the Social Costs of Adjustment (PAPSCA) in Uganda and the Fourth Population and Health Project in Bangladesh, and seeks to draw lessons which can be applied to future operational partnerships. The report makes a number of recommendations underlining, for example, the importance of: clearly defining the purpose of NGO involvement; evaluating the capacity of NGO partners, paying special attention to appropriate procurement and disbursement procedures, and ensuring flexible mechanisms to facilitate community participation. 29. Another effort to enhance exchanges between NGOs and Bank staff on operational issues has been a series of country-specific focus group discussions launched by the NGO Unit in FY96. These discussions aim to bring together visiting NGO resource people from developing countries with relevant operational Bank staff to discuss issues related to Bank- NGO collaboration, NGO-State relations, etc. in the given country context. One focus group discussion was organized between Bank staff and visiting NGO representatives from Bangladesh. Discussions for West Bank and Gaza, Pakistan, Sri Lanka and Malawi have been planned for FY97. c) NGO capacity-building initiatives 30. Since the late 1980s, the Economic Development Institute (EDI) - the World Bank's training and learning branch - has steadily expanded its interactions with NGOs. EDI invites NGOs to participate in many of the training activities it supports and, at times, draws on NGOs to design and deliver programs. EDI also supports a number of initiatives aimed specifically at NGO institutional development and capacity-building. 31. Since 1991, EDI has supported the FICONG (Fortalecimiento Institucional y Capacitacion para Organizaciones non Gubernamentales) program which aims to strengthen NGOs working in urban poverty and to facilitate more NGO-government dialogue on urban sector issues. During FY96, FICONG organized 50 activities in 13 countries effectively linking more than 100 NGOs in the region. Activities involved workshops and seminars dealing, for example, with legal frameworks for NGO operations, the reform of urban policies and decentralization. FICONG organized an exhibition of NGO work during the Bank's Annual Conference on Economic Development in Latin America. It also participated in the Habitat II summit held in Istanbul. 32. During FY96, EDI carried out an evaluation of the first phase of its West Africa NGO Program and developed an action plan to expand and deepen the program over the next three years. The program was initiated in 1991 with the goal of "developing a methodology to enhance the capacity of NGOs in developing countries to successfully participate in poverty-alleviation actions". Since its inception, the program, in collaboration with a West African partner institution, (IRED), has developed training manuals on NGO Strategic Planning and Management and has undertaken the training of trainers with over 100 people in Benin, Burkina Faso, Mali and Niger. 12

33. For the past several years, EDI has supported two women's management training pilot projects - the Women's Management Training Outreach Program (WMTOP) which aimed to strengthen the capacity of NGOs and national training organizations to provide management training to women in Burkina Faso, Nigeria and Senegal, and the Women's Enterprise Management Training Program (WEMTOP) which worked through approximately 30 NGOs to design and deliver management training to enhance the income-generating capability and self-reliance of women entrepreneurs in India. In FY96, both of these pilot projects were completed. Once they have been fully evaluated, these experiences may be replicated elsewhere and their lessons applied to other Bank-financed activities. 34. Partnership for Poverty Reduction is a new initiative supported by the EDI that seeks to promote new partnerships between the public, private and civil sectors for the reduction of poverty in Latin America. Past experiences of collaboration between these three key sectors have already produced positive results in the region. The multiplication of such initiatives is inhibited, however, by a lack of information on innovative programs and best practices and the institutional infrastructure needed to establish new partnerships is still very weak. The Partnership for Poverty Reduction program aims to address those constraints by: (i) identifying and widely disseminating information on such experiences throughout the region; (ii) helping establish a network of regional institutions that will take the lead in promoting and facilitating new partnerships; (iii) giving public recognition to some of the most innovative initiatives through awards and public information campaigns; and (iv) contributing to the development of good practice guidelines. The program is starting as a pilot in Argentina, Colombia, El Salvador, Jamaica and Venezuela with the support of the Inter-American Foundation, the UNDP and an active role on the part of the Bank Resident Missions. 35. EDI is currently developing a program called Learning and Action to Mainstream Participation (or LAMP) which aims to mainstream within the development community gender-inclusive participatory approaches which empower the poor and marginalized. The program will facilitate the documentation and dissemination of lessons of experience with participatory approaches and support country-level training and learning workshops aimed at introducing participatory processes into key development initiatives. The guiding principles of the LAMP program will be to: strengthen partnerships between government, donors and NGOs; encourage joint learning, and; facilitate the inclusion of poor and marginalized groups by promoting approaches which enable their voices to be heard in the design and implementation of development assistance programs. LAMP will collaborate closely with NGOs, in particular, in the documentation of participatory experiences and in the development of country-level networks and training events. d) Social funds 36. One of the most promising mechanisms for Bank-NGO collaboration are the increasing number of social fund-type projects financed by the Bank. Social funds are 13

designed to finance small-scale, demand-driven subprojects in the areas of social and economic infrastructure, education, health, sanitation. In addition to NGO involvement in the implementation of social funds (i.e., designing and implementing subprojects or assisting communities to do so), there are a growing number of examples of NGOs contributing to the design of social funds, sitting on social fund boards and serving on committees that select, monitor and evaluate subprojects. 37. During FY96, a number of initiatives were undertaken to assess and promote NGO involvement in Bank-financed social funds. In November 1995, the Bank co-sponsored a seminar on NGO Involvement in Central American Social Funds. NGO representatives and social fund staff from El Salvador, Guatemala, Honduras, Nicaragua and Panama participated in the seminar (which was held in Honduras) and prepared background papers regarding the NGO-social fund relationship, from the perspective of both parties, in each country. The seminar, which also included government and donor representatives resulted in a number of concrete recommendations for enhanced NGO participation in social funds in the region. Social funds have been identified as a key area of interest by the NGO Working Group on the World Bank, which will collaborate with Bank staff in organizing a global conference on the subject in FY97. During FY96, the Bank approved new social fund projects in Argentina, Armenia, Eritrea, Ethiopia and Malawi and extended existing social funds in Egypt, Honduras, Madagascar and Nicaragua. f) Grants for NGOs and NGO-related activities 38. In addition to collaboration with NGOs in the context of its lending activities, the Bank has introduced a number of special programs whereby resources are channeled to NGOs in the form of grants. Special Grants Program 39. The Bank's Special Grants Program finances regional and global programs and activities that are important to the development process and complementary to the Bank's operational work. Applications for grants are prepared and submitted by Bank task managers who have identified an activity for support. While most of the grants are made to research institutions, UN agencies, or for specific regional initiatives, some of the grant recipients are NGOs. In FY96, approximately $5.34 million was disbursed to NGOs by the SGP. A number of vehicles whereby the SGP channels resources to NGOs are described below. 40. The Bank's Small Grants Program funds activities to promote dialogue and dissemination of information about international development among diverse audiences including NGOs, academia, government, business and the media. The program makes small grants (in the range of $10,000 to $15,000) to support conferences, seminars, publications, networking activities and other information-related activities. Sectors of priority interest include: environment/sustainable development, human resource development, development education, economic policy, participatory development and 14

NGOs, private sector development and indigenous peoples. In FY96, the Small Grants Program disbursed a total of $600,000. As of FY97, the Program will focus exclusively on developing country initiatives (in FY96, developing country organizations received 89% of grants). 41. The Safe Motherhood Special Grants Program provides funding for maternal health advocacy, research and interventions. In FY96, it disbursed a total of $800,000 to international organizations and NGOs. The Population NGOs Special Grants Program seeks to identify and strengthen the capacities of small, grassroots NGOs working in population-related fields and funds initiatives that exemplify new, integrative approaches to demand creation and service delivery. $850,000 was disbursed in FY96, with priority given to improving family planning programs and realizing linkages between social development and fertility decline. In FY96, a new program called the Female Genital Mutilation and Adolescent Reproductive Health Special Grants Program was introduced. It disbursed $450,000 in its first year to NGOs and other organizations working to eliminate the practice of female genital mutilation and to promote adolescent reproductive health. During FY96, the Special Grants Program also provided funding to the NGO Forum of the Fourth Global Conference on Women in Beijing and made grants to NGOs in the context of the Global Micronutrient Initiative, among others. Consultative Group to Assist the Poorest - A Micro-finance Program 42. The Consultative Group to Assist the Poorest (CGAP) was officially constituted in June 1995. CGAP is a multidonor effort to systematically increase resources in microfinance to broaden and deepen the success of the work done by pioneer institutions in this field. Representatives from a number of leading NGOs in the field such as the Grameen Bank, ACCION, Women's World Banking and SEWA are members of the CGAP Policy Advisory Group. The objectives of CGAP are to: (i) strengthen donor coordination in the field of micro-finance; (ii) increase learning and dissemination of best practice for delivering financial services to the poor on a sustainable basis; (iii) mainstream microfinance within World Bank operations; (iv) create an enabling environment for microfinance institutions; (v) support micro-finance institutions that deliver (or are capable of delivering) credit and/or savings services to the very poor on a financially sustainable basis; and (vi) help established providers of micro-finance to assist others start such services in under-served regions. Member donors have jointly pledged roughly $200 million to the CGAP portfolio. The majority of that funding is being administered directly by the participating member donors. The World Bank's cash contribution of $30 million is the basis of a three-year "core-fund" that will be administered by the CGAP Secretariat to support eligible micro-finance institutions. In FY96, CGAP approved grants totaling $3.3 million to institutions and projects. CGAP publications (including the CGAP Newsletter, Focus Notes series and application forms) can be accessed on the World Wide Web at http://www.worldbank.org/html/cgap/cgap.html. 15

Project in Support of NGOs in West Bank/Gaza 43. In FY96, the preparation of an international multidonor project for NGOs in the West Bank and Gaza has been underway. This project, to be administered by the World Bank, is being initiated in recognition of the important development role played by Palestinian NGOs and the funding loss they have experienced in recent years as a result of the Gulf War and the diversion of donor funds to the Palestinian Authority. A Bank contribution of up to $10 million is being requested, along with co-financing of up to $10 million. Project approval is expected in FY97. The funds would be provided on a grant basis. Institutional Development Fund 44. The Institutional Development Fund is a grant facility for financing technical assistance for institutional development in key operational areas such as poverty reduction, human resource development, environmentally sustainable development and gender. Only governments can request IDF grants and, in most cases, IDF grants are used for public sector institutional development. In some cases, however, with government approval IDF funds have been used for NGO capacity-building or NGOs have been involved in activities financed by the IDF. In FY96, the IDF made 96 grants totaling over $24 million. FY96 grants which involved NGOs included, among others: a grant for Promoting Gender Accountability in the Agriculture and Natural Resources Sector in Nicaragua, an Institutional Environment Assessment in Benin, and National Capacity Assessments for Burkina Faso, Guinea Bissau, Cote d Ivoire, Ghana, Malawi, Tanzania, Uganda and Zambia. Fund for Innovative Approaches in Human and Social Development 45. The Fund for Innovative Approaches in Human and Social Development (FIAHS) was established in FY95 to support participation (including the involvement of NGOs and community-based organizations) and social assessments in Bank-financed activities. The FIAHS is not a fund to which NGOs can apply, but rather a supplemental source of funding which can be used by Bank staff (as a complement to regular departmental budgets) in order to undertake innovative activities in the areas of participatory and social development or to build in-house capacity in these areas. During FY96, the FIAHS disbursed a total of $1.5 million. A number of the activities financed by the FIAHS focused on or involved NGO-related issues. III. RESEARCH AND ANALYSIS 46. In addition to its operational activities, the Bank engages in research and undertakes a wide array of economic, social and other sector-specific studies to inform and advise its lending portfolio and to contribute to the learning of the development community more generally. An important trend in recent years has been increased NGO involvement in the 16

Bank's Economic and Sector Work. 11 NGOs have also played an increasing role in projectlevel studies, environmental and social assessments, and other Bank-financed research. In FY96, NGOs both collaborated in, and were the subject of, Bank-supported research. Country Assistance Strategies 47. The Country Assistance Strategy (CAS) is a key document which defines the overall framework for the Bank's activities in a given country and also feeds into individual project design. Given the Bank's growing emphasis in recent years on fostering "local ownership" and enhanced public understanding of Bank-financed activities, increased efforts have been made to introduce participatory processes in CAS preparation. 11 Objectives of NGO participation in the preparation of the CAS are to: improve the quality of the CAS by tapping into "local knowledge" and ensuring that the views of target (especially poor) populations are reflected; further the Bank's objective of enhancing stakeholder participation in its lending and non-lending operations, and; assisting borrowers in increasing transparency, public understanding and involvement in development decision-making. 48. In November 1995, the NGO Unit organized a meeting with a small group of Bank staff and NGO representatives to discuss participatory approaches to the preparation of CASs. While the extent of civil society participation in CASs depends on a number of factors (e.g. the capacity of NGOs, borrower willingness to adopt a participatory approach, the nature of NGO-government relations, and the size and diversity of Bank programs), a growing number of CASs undertaken in FY96 included the involvement of NGOs and other civil society actors. These included: i) participation in the various studies comprising the "building blocks" for the CAS (e.g. poverty assessments, gender analysis and other social assessments, environmental action plans); ii) participation in discussions of national development priorities, and iii) the participation of NGO specialists and generalists in discussions of action plans. 49. In Malawi, for example, over 120 civil society participants were consulted through target group meetings and through the use of computer Groupware to help determine development priorities, provide feedback on the impact of Bank activities, and analyze the causes and solutions to poverty. In Ghana, over 30 consultative meetings were held during the month of November 1995 concerning the upcoming CAS. These included government/public sector representatives, NGOs, academics, journalists, politicians and 11 Economic and Sector Work (ESW) refers to the broad range of research and analysis undertaken by the Bank in order to inform its lending program and the policy advice it offers to borrowing governments. ESW seeks to identify and understand borrowers' development problems and opportunities and to advise on how to tackle them. Economic work focuses on the overall economic problems and development challenges of developing countries. Sector work studies the development problems, policies, institutions and investment priorities of major sectors and subsectors. 11 See John Clark, Civil Society Participation in the Country Assistance Strategy Processes, Extracts from a draft paper, February 23, 1996. 17

trade associations. NGOs were also invited to a retreat to discuss the CAS draft in early 1996. In Cambodia, a one-day workshop was organized to present and solicit feedback on a preliminary CAS working paper. This workshop was attended by approximately 25 NGOs and other civil society representatives. NGOs have also participated, or been consulted, in the preparation of CASs in Bangladesh, Guinea Bissau, the Ivory Coast, Lesotho, Vietnam and Zambia. Participatory Poverty Assessments 50. Poverty assessments (PAs) are undertaken in all borrower countries to help the Bank, governments, donors and NGOs understand who the poor are, why they are poor and, based on this analysis, to provide potential solutions. Some poverty assessments (known as Participatory Poverty Assessments or PPAs) are undertaken using participatory research methods. 12 These PPAs seek to learn about poverty from poor people themselves, to pay increased attention to poverty among diverse groups (such as women, children, ethnic minorities or the elderly) and to ensure that social and cultural issues are taken into account in the design and implementation of poverty alleviation strategies. PPAs frequently draw on NGOs to provide information or to assist in participatory research. During FY96, PPAs were carried out in Mozambique, South Africa, Swaziland and Armenia. NGOs were also involved in PAs in Cambodia, the Philippines and Vietnam. A PA undertaken in Yemen in FY96 identified the development of the NGO sector as one of the three main components of a national poverty reduction strategy. Sectoral Studies and Research 51. A number of sector-specific studies undertaken in FY96 either involved NGOs or included NGO issues in their scope of study. In Morocco, for example, the preparation of a study on Decentralization and Rural Development included an inventory and analysis of NGO involvement in this sector. Similarly, a report on Poverty and Unemployment in Trinidad and Tobago prepared in FY96 included a chapter on the role of NGOs and recommendations as how to support their ongoing activities. During FY96, the Bank also supported a series of civil society studies in Russia, Slovakia and Poland. 52. The Bank's Policy Research Department (PRD) carries out more in-depth research on specific subjects of key policy interest. In FY96 PRD, collaborated with International Christian Humanitarian Services (ICHS), a Dutch NGO working in Kenya, to carry out the pilot phase of a randomized evaluation of different policy options in improving primary education. Over the next four years, ICHS will provide different forms of assistance to selected primary schools (such as textbooks, school supplies, desks, classroom repair, etc.). PRD will study and compare the different forms of assistance in order to evaluate relative impact and cost-effectiveness. PRD also hopes, with this project, to set a precedent for collaboration between researchers and NGOs in conducting randomized evaluations. A 12 See Jeremy Holland and James Blackburn, eds., Who s Voice? Participatory Research and Policy Change. (London: Intermediate Technology Publications, 1997) 18