In an earlier report, in 2000, the OED identified the following as shortcomings of the IF program:

• As an unfunded mandate outside the development mainstream, IF attracted uneven donor support.
• DCs and donors had different perceptions regarding IF objectives
• The program was neither sufficiently demand-driven nor concerned with DC development strategies
  • Governance was weak, with division of responsibilities between agencies unclear, and lack of clear priorities
  • Coordination amongst DCs, donors and agencies was difficult
• IF processes did not lead to a prioritization of technical assistance needs, and indeed appeared to result in little practical impact.

As this paper demonstrates, most of these criticisms continue to exist today.

2. Insufficient Funding

The IF was criticized as insufficiently financed.[2] As a result, the program remains small relative to DC needs, and a large gap endures between IF means and DC expectations of it.[3] While clearly a problem of itself, such dissonance additionally generates issues regarding ownership/credibility of the program; this concern, however, is examined later in the paper.

Conceived by its formulating agencies as a device to mainstream trade, and not as a site for new resources, it was noted that DCs are generally expected to seek investment funds related to the technical assistance provided through the PRSP process, a mechanism that has generally been unfruitful.[4] While funds coming directly from the IF to support projects identified in technical assistance have increased, country needs, as well as demand, continue to far outweigh supply.[5]

Relatedly, as regards the Bank's presence in the IF catalyzing non-Bank investment, the program was rated as 'modest';[6] the financing of investments identified by technical assistance, at the level of country operations, was furthermore rated as 'negligible'.[7] In light of this, the feasibility of the Bank's stated long-term goal of transferring funding of the program to donors must be questioned.[8]

It was suggested that funding gains could be made by better defining agency roles and improving their coordination,[9] an aspect of the program's governance examined below. Nevertheless, separate from the funding issues related to further assistance, concerns about the financing of the IF's more limited core objectives persist.[10] The program's 'venture capital' funding model was also criticized, with comments that a more rational and informed approach needs to be adopted.[11]

3. Insufficient Ownership

As alluded to above, difference of opinion between implementing agencies/developed countries as regards the objectives and the means of the program, and DCs' expectations of it, led to the IF being assessed as lacking sufficient DC ownership.[12] Indeed on the criteria of accountability to DCs, the IF obtained a rating of 'negligible'.[13]

In part this stems from the fact that DCs have little in-put in the program's design.[14] More importantly, however, there exists a large gap between the extent of advocacy underpinning IF recommendations and its overall goals, and the level of the program's resources - discussed above - supporting these ends.[15]

Such a disparity led to a view that the program lacked credibility.[16] Veritably, it was noted that DCs 'largely see [the] IF as run by and for its six international-agency partners'.[17] Indeed, in contrast to the dissonance between the IF's aims and DC expectations of it, there exists definite congruence between IF objectives and the six organizations involved.[18] It was suggested that without appropriate sector studies being undertaken or complementary investment projects being supported, DCs may regard the IF as 'merely trade reform under a different name'.[19]

This opinion was bolstered by the IF's downplay of the more central, underlying trade problems faced by DCs, such as developed country market access and internal supply constraints.[20] It was suggested that reform should include focusing on the policies and practices of developed countries/international agencies which currently inhibit DCs' trade performance, as well as the effect of changes to such policies and practices on DCs.[21]

With diminished DC capacity to articulate the program's direction, IF focus on international consensus - a criterion for initial Bank involvement in a sector[22] - is weak.[23]

4. Weak Governance

The IF was also criticized for its poor governance, with the need for more businesslike conduct of board meetings and transparency/openness in its operations noted.[24] The necessity for developing agendas in consultation with board members, for specialized subcommittees for specific issues, and for timely issuance of board meeting minutes were all specifically mentioned.[25] Governance issues were at least partly to blame for the lack of feeling of ownership of the IF by DCs, discussed above.[26]

IF governance was further criticized on account of the ill-defined nature of the roles of its member partners and governing bodies.[27] The lack of articulation of the specific roles of international organizations, bi-lateral donors and DCs was notorious in this regard.[28] It was noted that this meant the program's objectives - themselves criticized vis- ƒÆ’  -vis coherence and clarity[29] - were less likely to be incorporated into PRSPs, with reduced chance of government and donor support of follow-up activities.[30]

Little budget allocation for oversight and no standard terms of reference outlining the responsibilities and accountabilities of Bank staff were also deemed matters of concern.[31] It was suggested, as a whole, that the IF take a more holistic approach as regards its governance.[32]

It was noted that the IF operates under a more decentralized model than when first conceived, such reform being adopted in light of a feeling of a lack of ownership by the Bank's regional staff.[33] However, while regional economists are now provided resources for management of DTISs, in order to better mobilize trade-investment resources through Bank- and donor-delivered lending and grants, this has not percolated down to country level.[34] Reform of structures so as to amend this arrangement was suggested.[35]

5. Lack of a Results-Oriented Framework

It was noted the lack of a results-based framework hindered the IF in being an effective program.[36] The implicit assumption that program outputs would automatically lead to achievement of objectives was criticized,[37] the expectation that DTISs would of themselves lead to integration in the multilateral trading system and improved export performance being specifically cited in this regard.[38]

Assessment of whether intended outcomes would automatically follow or of the steps required for implementation was absent from the program.[39] While DTISs have improved, and a small paradigm shift as a whole appears to be underway,[40] it was found that they still could be more focused and operational towards promoting investment and facilitating policy and institutional reform.[41] DTISs were also generally felt to be insufficiently precise as regards prioritizing and addressing identified weaknesses, and in dealing with external market access problems like agriculture.[42]

DTISs were further criticized for failing to sufficiently examine the inter-relationships between internal and external weaknesses,[43] and for not canvassing ways to increase supply responses from traditional sectors (such as fishing) threatened by any economic restructure.[44] The program's structure then, in examining trade obstacles on a country-by-country basis, was criticized as capable of achieving only a limited set of outcomes.[45]

To summarize, the IF was felt to retain an insufficient focus on trade outcomes, being more concerned with process.[46] While DTISs were described as a 'good beginning', they were deemed not to provide an adequate basis for a country to devise an export strategy.[47] It was felt the IF needed to go beyond identifying deficiencies to actually meeting country needs/demands.[48]

It was suggested that establishing concrete country-level indicators and related performance gauges, together with an emphasis on monitoring, would remedy these issues in part.[49] It was stressed that monitoring of results and impacts, and formulation of strategy, should generally occur at the country level,[50] where donor coordination and awareness of the IF is poor.[51] This would also assist in overcoming governance-related problems.[52]

6. Lack of Coordination/Links to Other Programs

Adjunct to, but separate from, governance issues was the lack of coordination amongst donors. While the IF has undoubtedly enhanced coordination amongst agencies providing technical assistance,[53] further steps to improve efficiency in this regard were definitely needed.[54] In this regard, the fact that operational procedures of the different agencies continue to differ was cited as notable.[55]

As noted above, DCs may actually see the unstated objective of enhancing donor and international agency co-operation as the IF's real goal, rather than its stated aim of mainstreaming trade into country development.[56] Paradoxically then, increased coordination amongst implementing agencies may simultaneously both benefit and injure the program.

A related issue was the need for better coordination between authorities administering the IF and those administering aid programs.[57] Indeed, as regards its link to country-specific operations and the financing of related investments, the IF was rated as 'modest but improving'.[58] This was cited as an area where the IF should concentrate its efforts in the future.[59]

Likewise, at the country level, donor coordination and awareness of the IF is poor.[60] This partially explains the funding issues dogging the program and calling into question its long term viability;[61] as noted above. Regarding the Bank's presence in the IF as catalyzing non-Bank investment, the program was rated as 'modest'.[62]

The lack of synergy between the IF and other related programs, such as the Development Economics Vice Presidency (DEC) was also commented upon as wasteful.[63] This is notable given increased involvement with such programs being an objective of the IF as re-formulated in 2000.[64] The recent engagement of the IF in related projects like JITAP was thus praised and encouraged.[65]

7. Little Value-Add/Effective Impact

Perhaps most damning of all, the value-add of the IF vis- ƒÆ’  -vis both the Bank and its clients was questioned.[66] While it was concluded too early to assess whether any value-add was outweighed by the program's high transaction costs, the issue was raised.[67] It was suggested such transaction costs need minimizing, in addition to better resourcing more generally.[68]

The ineffectiveness of the IF in catalyzing new investment has been documented above. It was further noted that while new resources were mobilized to some limited extent, the IF is perhaps more appropriately seen as replacing resources UNCTAD provided in the past for trade-related technical assistance.[69] That is, the program was characterized as merely shifting old resources, not generating new ones.

Indeed, it was commented that the IF could be considered by some as largely ineffective.[70] Elsewhere, it was noted that the program brought 'few and uncertain (documented) impacts'.[71] It was moreover questioned whether the IF even had the right program objectives, or if they were merely formulated in line with available resources and agreed partnership and management arrangements.[72] The IF was criticized as a program that has 'created too many expectations on which it is unable to deliver'.[73]

Endnotes

[1] IF Report 3, 7.

[2] A problem that has dogged the IF since its inception, despite being noted in the earlier OED Report: IF Report ix, xv.

[3] GP Report 24, 46, 118, IF Report x-xii, 4, 5.

[4] GP Report 24, 46, 76, IF Report xii, 11.

[5] GP Report 24, 117, IF Report x, xii, xv.

[6] GP Report 240.

[7] GP Report 197, IF Report xiv. Elsewhere in the GP Report, the program appears to rate as 'modest' on a very similar criterion: GP Report 42.

[8] See GP Report 236-7.

[9] IF Report 20.

[10] GP Report 24.

[11] GP Report 88. Management has accepted this criticism: GP Report 243.

[12] GP Report 24, 61, IF Report xvi.

[13] GP Report 196-7.

[14] See IF Report 23.

[15] GP Report 24, 61, IF Report xvi. The IF was rated 'high or substantial' as regards advocacy and supporting national-level policy, institutional and technical reforms, while 'negligible' as regards the financing of country-level investments: GP Report 196-7.

[16] GP Report 24.

[17] GP Report 61, IF Report xvi. The congruence between IF objectives and those of the six organizations involved should also be noted: see IF Report 21.

[18] IF Report 21.

[19] IF Report 29.

[20] GP Report 24, 61, 75, 85, 117, IF Report xv. Where discussed, the latter is emphasized more than the former: GP Report 46, 117. It is noted that increased public profile of the former issue may pressure developed countries to alter their current policies: IF Report xii.

[21] IF Report xiii, 12.

[22] See GP Report xxiii.

[23] GP Report 27. Indeed, rated as 'modest': GP Report 240.

[24] GP Report 59, IF Report 20. As regards the criterion of transparency, the IF rated as 'modest': GP Report 230-1.

[25] GP Report 59.

[26] GP Report 61.

[27] GP Report 65, IF Report 20. As regards the criterion of clarity of roles and responsibilities, the IF rated as 'modest': GP Report 230-1. Governance structure was also highlighted in the 2000 OED Report on the IF: IF Report ix, 19-20.

[28] GP Report 65, IF Report xi-xiii, 20.

[29] GP Report 214-15. This is a problem that was also noted in the OED's earlier report: IF Report ix.

[30] GP Report 65. This, however, is somewhat improving. Trade-facilitation lending operations are also apparently in the pipeline: GP Report 117.

[31] GP Report 70. It was further noted that while IF now has a monitoring matrix and requires a focal point in each country, some focal points: 'allocate insufficient time or fail to attend relevant meetings': IF Report x.

[32] IF Report xv, 32.

[33] IF Report xiv.

[34] IF Report xiv.

[35] IF Report xiv-xv.

[36] GP Report 117, IF Report xv, 9. This problem has dogged the IF since its inception: GP Report 117. As regards the criterion of possessing a structured set of quantitative or qualitative indicators, the IF rated 'negligible': GP Report 214-15. The IF further received a rating of 'modest' as regards the criterion of possessing systematic and regular processes for data collection and management: GP Report 214-15. The IF Secretariat, with its limited resources, decided that adopting a results-based framework would unduly increase its burden, opting instead to focus on 'bigger process' bottlenecks: IF Report x.

[37] GP Report 37, 46, IF Report xi.

[38] GP Report 37.

[39] GP Report 37, IF Report xi.

[40] It is reported that some results-based management and evaluation system are being implemented: GP Report 46.

[41] GP Report 117, IF Report 12, 26.

[42] IF Report 10, 13.

[43] IF Report 15.

[44] IF Report 13-14.

[45] IF Report xi.

[46] IF Report xv, 32.

[47] IF Report 15.

[48] IF Report xvi.

[49] IF Report xiii, xv, 32.

[50] IF Report xv.

[51] IF Report xvi.

[52] IF Report 20.

[53] IF Report xiii, 18.

[54] GP Report 65, IF Report xi-xiii, 20.

[55] IF Report 20, 22.

[56] IF Report xvi, 11-12, 21.

[57] IF Report 19.

[58] GP Report 42, IF Report xiv. As regards the Bank's presence catalyzing non-Bank investment, the program was rated as 'modest': GP Report 240.

[59] IF Report xii.

[60] IF Report xvi.

[61] See GP Report 65, 197, 240, IF Report xiv.

[62] GP Report 240.

[63] GP Report 72.

[64] See IF Report 7.

[65] IF Report xiii, 16.

[66] GP Report 44, 72, IF Report xiv; see also n 2 above. Indeed, on this criterion the IF was rated as 'modest': GP Report 240.

[67] IF Report xiii, 20. It was also noted any such calculation might be difficult to assess, owing to the largely intangible nature of many of the benefits surrounding the program: IF Report xiv.

[68] IF Report xv.

[69] IF Report 25.

[70] GP Report 24, IF Report xv.

[71] GP Report 49. It was also noted it was too early to know the IF's ultimate impacts on its beneficiaries: GP Report 118.

[72] IF Report xv.

| More...