Background and objectives

This report presents the findings and recommendations of the corporate-level evaluation on IFAD's efficiency (CLEE). The CLEE responds to the growing interest in the organization's efficiency in the wake of the 2008 global economic and financial crisis, and the ensuing budget constraints affecting many IFAD member states.

The main audience of this evaluation is IFAD Management and the Executive Board. However, the evaluation will also be of interest to IFAD Member States, multilateral and bilateral organizations, as well as the development evaluation community in general. CLEE covers not only the efficiency of IFAD operations, but also institutional efficiency in a number of critical areas: the management of human resources, results and budgets, ICT, oversight and support functions, leadership and decision-making, and governing bodies. Given its scope and coverage, it has been arguably the most complex and challenging evaluation done by the Independent Office of Evaluation (IOE). The challenge has been exacerbated by the fact that this evaluation is the first of its kind among development agencies, requiring IOE to develop a dedicated methodology, and mobilize extraordinary expertise in evaluation and a range of technical areas. The unique features of this evaluation include the analysis of efficiency at multiple levels – output, outcome, impact and scaled-up outcome and impact, which is very relevant for IFAD. Credit goes to the Executive Board and IFAD Management for their support in this undertaking, as well as for their openness to engage with IOE throughout the evaluation process, and share with us the necessary data, information and documentation required for our analysis.

IOE has been ably supported by a highly credible team of consultants, with country case studies mostly done by national consultants (annex 14). IOE has benefitted from the insightful inputs of two senior independent advisers, Robert Picciotto and Richard Manning, who ensured that IOE and its consultants followed the most appropriate evaluation methodology and process to conduct this evaluation, and who also reviewed and commented on several deliverables, including the draft final report. Their joint analysis on the quality of the evaluation has been included (annex 10). The CLEE also included valuable contributions by several IOE staff at different stages, however, in line with the IFAD Evaluation Policy, as the manager of the CLEE, I take full responsibility and ownership of the contents in the final evaluation report and the overall evaluation process.

In terms of process, special effort was made by IOE throughout the evaluation to minimize surprises and maximize learning and dialogue. For example, emerging evaluation findings were discussed with IFAD Management in a timely manner, both informally and formally. Management was given the opportunity to review and comment on the emerging findings in an interim report, and their feedback was duly considered by IOE in the preparation of the draft final evaluation report, where they also had a chance to comment. The main findings were presented to the Evaluation Committee and the Executive Board for their feedback before the preparation of the final evaluation report.

The CLEE found that a number of initiatives to enhance efficiency and effectiveness have been undertaken in recent years, including in the course of the evaluation. They include the introduction of direct supervision and implementation support, expanded country presence, the Change and Reform Agenda, commitments related to efficiency undertaken in the context of IFAD9 consultations, a more transparent and strengthened budget process, and the even more recent Strategic Workforce Plan.

On the operational front, IFAD is engaged in a fundamental transition from a focus on financing individual projects to a programmatic approach that links knowledge work, policy dialogue and partnerships to projects in each country, with growing attention given to the scaling up agenda. It will take time for the full benefits of many management decisions and reforms to be realized fully. At the same time, there are a number of opportunities for increased efficiency at different levels, and they are enumerated in the report. In pursuing these opportunities, IFAD Management and the Executive Board must be mindful of the trade-offs between efficiency at these different levels.

With respect to the governing bodies, CLEE finds that their overall architecture is complex, but it works. The non-resident nature of the Board is a positive characteristic but it does contribute to an overloaded agenda. There are opportunities for the Governing Council to delegate to the Executive Board, and for the Board to delegate to Management. The report includes a dedicated chapter on the efficiency of IFAD governing bodies, with many interesting findings that deserve reflection.

Recommendations. The evaluation has a number of important findings and recommendations that merit close attention. The overarching recommendation is that IFAD "Raise the bar for IFAD's own performance as a partner to promote scaled-up impact of IFAD-supported operations". This recommendation is grounded in the rationale that for IFAD to make a significant impact, it must leverage its resources manyfold by attracting partner resources on a very large scale to replicate and scale up pioneering, innovative IFAD-funded operations and activities. This requires that IFAD become the center of excellence in its niche by raising the bar on its own performance. It compels IFAD to aspire to the threshold of ‘satisfactory or better' performance as against the current practice of ‘moderately satisfactory or better'. That is the first step toward excellence in all aspects of operations, and toward developing IFAD-supported projects and country programmes that can lead to the desired levels of scaled-up impact.

This recommendation is supported by seven sub-recommendations:

• Scaling up of high impact, innovative approaches emerging from IFAD-supported projects and programmes should become the objective of IFAD's business model;
• Articulate and implement a clear vision for country presence and how IFAD would operate in a decentralized environment;
• Manage oversight and support units, including critical ICT functions, with a clear focus on increasing service quality and cost efficiency;
• Better manage scarce budgetary resources towards high-quality results;
• Manage strategically the skills composition, cost and performance of the workforce;
• Focus oversight by the governing bodies on key strategic issues, with more attention to discussing results, lessons and evaluations;
• Instill an institutional culture of accountability and performance, and strengthen the reporting for results.

With respect to the governing bodies, the evaluation also recommends the introduction of a code of conduct, a normal feature of international financial institutions, and the development of broad terms of reference for Executive Board members to assist Member States in designating their representatives. Discussions on the CLEE by the Evaluation Committee and the Executive Board have resulted in broad agreement on the recommendations, and highlighted the critical importance of effective and timely follow-up. Management and IOE agree that the best way forward is to combine the recommendations of the evaluation and the efficiency-related commitments undertaken in IFAD9 consultations into a single, consolidated action plan for further enhancing IFAD's efficiency.