93939 MID-TERM REVIEW OF THE STATE- AND PEACE-BUILDING FUND EXECUTIVE SUMMARY OCTOBER, 2012 “Fragile states are systematically behind on achieving every Millennium Development Goal, and we need to collectively think how solutions can be tailored to their special needs... We need different solutions altogether, ones in which an emphasis on capacity to implement is front and center.” —Jim Yong Kim World Bank Group President PHOTO CREDITS Cover Tractor: GRM International Water kiosk: Jean-Martin Brault/The World Bank Mother and baby: FAO Meeting in Papua New Guinea: Gretchen Bloom Page 1: Program for Accountability in Nepal (PRAN) Back Cover GRM International For more information on the work of State- and Peace-building Fund, please contact: The State- and Peace-building Fund (SPF) Global Center on Conflict, Security and Development (CCSD) Washington, D.C. Operations Policy and Country Services (OPCS) The World Bank 1818 H Street, NW Washington, D.C, 20433 USA Nairobi 2nd Floor, Shelter Afrique House Longonot Road, Upper Hill P. O. Box 30577-00100 Nairobi, Kenya Telephone: +1 202 458-0352 E-mail: spf@worldbank.org Web address: www.worldbank.org/fragilityandconflict PREFACE The Mid Term Review (MTR) of the State and Peace Building Fund (SPF) was commissioned by the SPF secretariat and was conducted between February and August 2012. The MTR team was made up of SPF secretariat staff and external consultants. Secretariat staff included Roisin De Burca, Holly Benner, Esther Rojas Garcia and Nicholas Evan Marwell. The external consultants were Anthony Finn, Jean Mazurelle and Caroline Sergeant. The team is grateful to the many SPF partners and Bank staff who gave so generously of their time throughout the review process. SEPTEMBER 2012 MID-TERM REVIEW OF THE STATE- AND PEACE-BUILDING FUND 1 I: EXECUTIVE SUMMARY The Mid-Term Review (MTR) of the State- and Peace-building Fund (SPF) was conducted between February and August 2012 with the objective of: assessing the degree to which the SPF has achieved its original objectives and is fit for purpose moving forward, given the new ways of working in fragile and conflict affected situations (FCS) and the strategic direction given by the 2011 orld Development Report Conflict, Security and Development (2011 DR). The SPF was founded in 2008 and is the World Bank’s global The World Bank finances over 80 percent of the SPF’s US$199.8 multi-donor trust fund solely dedicated to issues of conflict and million budget, with the remaining portion covered by bilateral fragility. SPF contributors include the World Bank as well as bilateral donors and investment income. For the first three years of the SPF donors (Australia, Denmark, Germany, the Netherlands, Norway (FY09-11), the Bank pledged an initial US$100 million to the Fund. and Sweden). The objectives of the SPF are: In FY12, the Bank pledged an additional US$33 million and has committed a similar level of financing for FY13. External donor To support measures to improve governance and institutional contributions to the Fund total US$30.8 million. The SPF supports performance in countries emerging from, or at risk of sliding 50 projects across 38 countries for a total SPF Committee approved into, crisis and arrears, and amount of $134.6 million. The Fund had an average 12 grants per To support the reconstruction and development of countries year in its first four years, with an average project size of US$2.7 prone to, in, or emerging from conflict. million and an average project length of three years. More than half of projects are past their midpoint.1 The recent release of the 2011 WDR and WDR Operationalization The SPF has a focus on Africa with 44 percent of approved funds strategy, the creation of the Global Center on Conflict, Security and going to 12 African countries: the Middle East and North Africa Development and momentum within the Bank and across the (MENA) (21 percent), Latin American and Caribbean (LAC) (13 per- international community to promote new approaches to address- cent), and East Asia and Pacific (EAP) (9 percent) receive the next ing conflict and fragility combine to present a unique moment for largest shares regionally. the SPF. The MTR recommendations and conclusions set out the At its inception, the SPF was designed to conceptually align with vision and priority reforms necessary to ensure a more strategic and cutting-edge research, policy reforms, and discourse both within catalytic SPF which will improve the impact of SPF financing; pilot the Bank and across key partner institutions regarding approaches how the Bank can operate differently in FCS; strengthen Fund level to peace-building and state-building. The broader World Bank partnerships and governance; and improve the performance of the and FCS context changed significantly between the establishment SPF portfolio. of the PCF/LICUS Trust Funds and the establishment of the SPF. Over time, the emergency financing policy shifted from OP/BP2.30 1.1 EVOLUTION OF THE SPF Development Cooperation and Conflict in 2001 to OP 8.00 in 2007 marking the Bank’s commitment to make emergency financing to The SPF was created as the sole successor to both the Post- FCS faster, more flexible and less risk averse. Bank policies were Conflict Fund (PCF) and the Low Income Countries Under Stress also introduced in 2008 to mainstream WB trust funds into normal (LICUS) trust fund, which were the World Bank’s first global multi- WBG business processes and to standardize procedures across trust donor trust funds dedicated to supporting work on conflict and funds. Most recently, the new 2012 guidance for processing small fragility issues. These two funds had similar but slightly different recipient executed grants has introduced more complex project goals (the LICUS Fund primarily focused on re-engaging countries in processing requirements and controls. These changes are having an arrears through coordinated packages of projects; the PCF focused impact on the SPF’s ability to be a rapid response financing mecha- on funding discrete projects within a broader range of country nism and have slowed project processing and clearances compared contexts) and separate management structures. Consolidating to its predecessor funds (particularly the PCF). the Bank’s strategic approach and streamlining processes and With the April 2011 release of the World Development Report: procedures to improve the flexibility, speed and effectiveness of Conflict, Security and Development, the accompanying WDR opera- the Bank’s response in FCS was a primary objective of creating one tionalization strategy2 called for a paradigm shift in how the Bank fund, the SPF, to succeed both the PCF and LICUS. supports countries in preventing and responding to conflict and fragility. Based on WDR recommendations, the Bank is implement- 2 ing an internal FCS reform agenda led by the Global Center on Conflict, Security, and Development (CCSD), which includes a new BOX 1 Nairobi-based office focused on support to Bank country teams, staff of the DC-based Fragile and Conflict-Affected Countries Group THE SPF’S FY12 ENGAGEMENT STRATEGY (within OPCS), and New York-based staff working on UN partner- To better align with the findings of the 2011 ship issues. DR, the SPF Secretariat introduced major The themes and recommendations of the 2011 WDR and WDR changes as part of its FY12 Engagement Strategy operationalization strategy have also been echoed in a range of that affect the types of projects the Fund sup- other research and policy processes across the international system, ports, and how the Fund measures progress. including the New Deal for Engagement in Fragile States3 which was agreed to at the Busan High-Level Forum on Aid Effectiveness; STRATEGIC INITATIVES WITH FOCUS the OECD/International Network on Conflict and Fragility’s state- ON WDR THEMES building and financing guidance; the UN review of civilian capacity Aiming to help improve the impact of SPF in the aftermath of conflict; recent work of the UN Peacebuilding financing on the Bank’s overall portfolio and on state- and peace-building challenges, the SPF Commission and UN Peacebuilding Fund; and initiatives by regional announced that it would begin accepting pro- institutions such as the African Union and European Community. posals for “strategic initiatives”—a coordinated In reviewing the Fund’s history, the MTR found that SPF man- package of grants to countries and/or regions agement has been proactive in ensuring the Fund responds to the committed to “transformative strategies” that evolving internal and external FCS policy environment, and also in align with WDR findings and recommendations. managing emerging challenges to the Fund’s performance. In 2010, The MTR believes that the SPF’s new strategic the SPF conducted an in-depth portfolio review to address project initiative applications will allow the Fund to implementation issues. It also introduced a bi-annual call for pro- support state- and peace-building objectives in posals to increase the Fund’s selectivity, as well annual engagement a more comprehensive way and promote more strategies to better define the Fund’s priorities. In 2011, to respond “fragility-sensitive” Bank approaches to assess- to the findings of the 2011 WDR and further increase its strategic ment, planning, operations, and knowledge and focus, the SPF opened a new window for Strategic Initiative applica- learning. tions and introduced a revamped results matrix to improve portfolio SPF RESULTS FRAMEWORK alignment and create a foundation to better monitor state- and Alongside the shift to accepting strategy initia- peace-building results across the portfolio (see Box 1). tives, the SPF also introduced a revamped results The SPF, with its focus on early-entry and institution-building framework, aligned with 2011 DR findings, approaches, implemented in collaboration with a broad range of to serve as a guide in prioritizing the selection partners, is uniquely positioned to serve as a catalytic and flexible of both strategic initiatives and stand-alone resource that supports the operationalization of the WDR and can projects. All SPF proposals are now required to “field test” WDR recommendations. As the Bank’s global trust fund provide a rationale for how the proposed inter- focused on FCS issues, the SPF has already shown that it has a key vention contributes to SPF results. role in moving forward the WDR reform agenda—both internally within the Bank and in partnership with external stakeholders and clients. Within this context, the MTR focuses both on reflecting on the lessons and performance of the SPF portfolio to date and on ensuring the SPF is “fit for purpose” moving forward and is one of the key instruments to reinforce the Bank’s commitment to a new way of doing business in FCS. SEPTEMBER 2012 MID-TERM REVIEW OF THE STATE- AND PEACE-BUILDING FUND 3 1.2 MTR METHODOLOGY (A) PERFORMANCE AGAINST STANDARD BANK INDICATORS The performance of the portfolio has been measured against The MTR has employed a mixed method approach to review the standard indicators including: (i) progress of projects towards SPF at a strategic and operational level—gathering lessons on the achieving their respective objectives; (ii) disbursement; and (iii) overall design and direction of the Fund as well as a review of indi- timeliness (processing times). vidual projects and implementation. The MTR team has mixed inter- nal/external participants including the SPF Secretariat and expert (B) PERFORMANCE AGAINST FCS INDICATORS consultants in evaluation, Bank operations, and Bank management Traditional Bank progress indicators can be limited in assessing and strategy. The methodology for the MTR included: performance in FCS contexts. Therefore, the MTR also assessed the a comprehensive document review that incorporates strategic degree to which the Fund was performing against a set of FCS- documentation, project documentation, studies and reviews; focused indicators. This includes: consultations and workshops with relevant stakeholders across the Fund’s flexibility to support projects in range of FCS set- the World Bank, donor community, NGOs/CSOs, and govern- tings; ment, and; an examination of whether the SPF portfolio is “on track” in triangulation of qualitative findings via a quantitative analysis terms of contributing to state- and peace-building objectives; of the results of SPF-funded projects, impact assessments, and whether the Fund is promoting flexible implementation review of relevant project documentation. arrangements; The MTR team visited 12 SPF projects in seven countries and alignment with Bank country strategies; and employed a standardised analytical framework to guide consulta- the role of SPF projects within broader Bank engagement. tions and reporting. It also hosted a series of MTR-related work- shops in Nairobi and Washington D.C. that convened SPF task-team leaders, World Bank management, external FCS experts, and repre- sentatives from other fragility-focused global funds. In order to focus the review, the MTR considers three areas of inquiry: FIGURE 1: MTR AREAS OF INQUIRY I+5.A?246<;@.;1A52:.A60.?2.@.?26;56452@A12:.;1.;1D5F %$&($!$&*+ IB6?21 6;@B==