LATPS Occasional Paper Series

Number 9 - July 14, 1992

INSTITUTIONAL CAPACITY ANALYSIS ANDDEVELOPMENT SYSTEM (ICADS)

Operational Manual

Alain TobelemPrincipal Institutional Development Specialist

Public Sector Management DivisionTechnical Department

Latin America and the Caribbean Region

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Abbreviations and Acronyms

IC Institutional CapacityICA Institutional Capacity AnalysisICADS Institutional Capacity Analysis and Development SystemICG Institutional Capacity GapsID Institutional DevelopmentIDF Institutional Development FunctionIRR Inter-Institutional RelationshipsZIRMap Inter-Institutional Relationships MapIRRPAR Inter-Institutional Relationships: Participatory ProcessesIRRRES Inter-Institutional Relationships: ResponsibilitiesLAC Latin America and the CaribbeanORG Internal organizationORGCSR Internal Organization: Interpretation of Civil Service RulesORGDFS Internal organization: Distribution of FunctionsORGIDF Internal organization: Institutional Development FunctionORGIRF Internal Organization: Internal Relationships FlowORGMPS Internal organization: Management Procedures and StyleORGPFC Internal Organization: Physical and Financial CapacityORGRGM Internal Organization: Rules of the Game and ManualORGTEM Internal Organization: Technical ManualsPPR Personnel Policy and Reward SystemPPRCSC Personnel Policy and Reward System: Civil Service CareerPSIDC Project-Supported Institutional Development ComponentROG Rules of the GameROGCON Rules of the Game: ConstitutionROGCUL Rules of the Game: Cultural PatternsROGGOV Rules of the Game: GovernanceROGLEG Rules of the Game: Legislation, General and SectoralROGREG Rules of the Game: RegulationsSGA Skill Gap AnalysisSKL SkillSKLINF Skill: InformationSKLKNO Skill: KnowledgeSKLKHW Skill: Know-HowTOR Terms of Reference

Institutional Capacity Analysis and Development System (ICADS):Qperational Manual

Table of Contents

Introduction ........................................ 1ICADS Overview ....................................... 2ICADS Principles ....................................... 3

Section I: ICADS in Three Parts and Twelve Steps. 6

Part One: Setting Development Objectives, Resources, andImplementation Strategy. 6

Introduction.. 6Step One: Development Objectives. 6

Analysis .10Step Two: Activities/Resources .11

Analysis .11Step Three: Tasks .14

Analysis .15Step Four: The Interinstitutional Relationships

Map (IIRMap) .19

Part Two: Tracking, Interpreting, and Measuring Institutional Capacity Gaps .23

Introduction .. 23How to Proceed .. 23Step Five: Identification of Institutional Capacity Gaps (ICGs) from

the 'Rules of the Game' (ROG) Viewpoint .24Step Six: Identification of Institutional Capacity Gaps from the

'Interinstitutional Relationships" (IRR) Viewpoint .29Step Seven: Identification of Institutional Capacity Gaps from

the "Internal Organization' (ORG) Viewpoint .33Step Eight: Identification of Institutional Capacity Gaps from the

"Personnel Policy and Reward System" (PPR) Viewpoint ... 40Step Nine: ICGs from the "Skill" (SKL) Viewpoint .43

How to Perform SGA .43Step Ten: Consolidation of Nonskill-Related ICGs .51Step Eleven: Consolidation of Skill-Gap-Relation ICGs .51

Conclusion: Pause after Part Two .56

William Mayville edited this Manual.

Part Three: Translating Identified ICGs into an ID Strategyand a PSIDC ............ .... .............. 57

Governance-related Issues .......................... ...... 58Other Rules-Of-the-Game Issues ............. .............. 59Interinstitutional Relationships Issues ......................... 61Internal Organization Issues . .............................. 62Personnel Policy and Reward System Issues ..................... 62Skill Issues .63

Step Twelve: Synopsis of the ID Strategy and Program .64

Section II: ICADS in Country, Secor, and Policy-Based Lending Operations ... 70

Introduction .70Form A: Objectives ................ . ..... ....... 70Form B: Institutional Responsibilities .71Form C: Tasks ........ 72Carrying out ICA at Macro-levels .72

Section mII: ICADS as a Multipurpose Management Tool .78

Introduction 78ICADS as a Project Preparation Tool ........... .................. 78ICADS as a Project Appraisal Tool .......................... 80ICADS as an Organizational Tool .81ICADS as a Personnel Management Tool .82

Supervisor's Viewpoint .84Personnel Department Viewpoint .86

ICA]DS as a Work Programming and Monitoring Tool .86ICADS as an Evaluation Tool .88ICADS as an Overall Risk Assessment and Management Tool .89The Institutional Development Function (IDG) ......... .......... 89'

Attachments

One: Checklist for the AnalystTwo: ICADS Set of Blank FormsThree: 'Objective' Evaluation of Performance

Institutional Capacitv Analysis and Development System (ICADS)

Operational Manual

Introduction

1. The need for carrying out systematic institutional capacity analysis (ICA) has beenacknowledged by many World Bank reviews and operational evaluations in every sector and acrossRegions. Moreover, the effectiveness of institutional development (ID) activities increasessubstantially when capacity is assessed beforehand, with development inputs and institutionalstrategies designed in conformity with the nature and scope of the identified institutional capacitygaps (ICGs). In the early eighties, it became obvious to Bank staff that systematic methodologicalapproaches and guidelines were missing that could help non-specialists carry out this analysis as anormal part of project preparation when no ID specialist is available. The system explained in thisManual-the Institutional Capacity Analysis and Development System (ICADS)-is in response to thisperceived need. It was developed during the second half of the eighties and tested in many countries,sectors, and projects. It has been more frequently used in Latin America and The Caribbean (LAC)countries than elsewehere and especially in the agriculture sector. It is still too early to make adefinitive assessment of this approach on the long-term effectiveness of ID components. However,many operations staff have spoken of the positive results of ICADS in raising the quality of projectpreparation and developing awareness of the need for ICA before finalizing project designs. Thedirect impact on capacity enhancement has also been widely documented. Furthermore, ICADS hasbeen used to define ID strategies and inputs needed in policy-based lending and enabled implementersto carry out the policy measures encompassed by such operations.

2. ICADS provides five management tools, in one ID instrument. It can be used for: (a)project2 preparation and/or design from the conceptualization stage; (b) institutional capacity analysis(ICA)-during the preparation stage, then continuously monitored, since IC is highly dynamic; (c)management of project implementation; (d) personnel management, especially for those who areresponsible for executing project tasks; and (e) monitoring and evaluation of project activities. The

'For a more thorough introduction to this topic, see Alain Tobelem's LATPS Occasional Paper Number 3 (Dccember 26,1991): 'Systkme d'Analyse de Capacit6 Institutionnelle pour l'Ajustcment Structurel'.

2We will use the word 'project' throughout this Manual to mean any development activity and not necessarily a World Bankinvestment project. Thcrefore, this may include a simple development activity, the decision to improve the productivity ofadministrative, management or technical processes, or broader development activities such as a structural adjustment programand even entire country or sector development plans, for which some modifications to the investment-related version are alsopresented in this Manual.

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management and administration' of the five tools should be the responsibility of a new managementfunction called the Institutional Development Function (IDF). This Manual offers: (a) a descriptionof ICADS in the form of a set of guidelines (based on a conceptual approach defined elsewhere3),and using concrete examples drawn from actual experience in World Bank's projects that include aProject-Supported Institutional Development Component (PSIDC) (Section 1); (b) modification ofbasic procedures when dealing with upstream development activities such as country or sectoraldevelopment work and policy-based lending (Section II); and (c) a description of ICADS as amultipurpose management tool (Section IID. Finally, annexes include a checklist, a set of blankforms to facilitate the work of IC analysts, and a description of a procedure to assess objectivelymanagemernt and staff performance based on ICADS principles.

ICADS Ovevie

3. The proposed system is actually a flow of information that any decision-maker can initiate,develop, ccintinuously update, and then institutionalize whenever a decision has been made to domore of something, or to do it better, or both. This is the raison d'ere of any development activity.ICADS helps to clarify: (a) what was agreed as development or performance objectives; (b) theresources required to fulfill the objectives; (c) who should do what to realize stated developmentobjectives and use resources effectively; (d) what are the identifiable ICGs; and (e) how to bridgethese capacity gaps in time to ensure that these objectives will be achieved cost effectively. Thisinformation is collected through interviews with selected informant, cross-checked with theirrespective line supervisors (and possibly others), widely circulated for transparency, and periodicallyupdated as warranted. An ID program and implementation strategy are then designed (generallyfinanced under the same project) to help bridge the identified ICGs in a cost-effective manner. Thecorresponding information is presented on an Interinstitutional Relationships Map (IIRMap) and aset of 11 forms listed below in the sequence of steps to be followed:

Fonn A Objectives (expected outcomes)Fonn B Activities (spending categories) and Related ResourcesFonn C Tasks (how the objectives will be met using these resources)IIRMap Institutional universe (who is responsible and accountable for what)

Fonn Di ICGs from the Rules-of-the-Game viewpoint (ROG)Fonn Dii ICGs from the Interinstitutional Relationships viewpoint (IIR)Form Diii ICGs from the Internal Organization viewpoint (ORG)

-3Sce footnote 1 above.

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Form Div ICGs from the Personnel Policy and Reward system viewpoint (PPR)Form Dv ICGs from the Skill viewpoint (SKL)

Form Ei Consolidation of nonskill-related ICGsForm Eii Consolidation of skill-related ICGs

Form F Synopsis of the corresponding II) strategy and program

These forms and the Map will be presented and explained in detail in this Manual.

ILCADS Principles

4. To understand the proposed system and use it efficiently, seven important interrelatedprinciples must be followed:

Principle One:

When a government, an administration, or an entity does not intend to changeanything-when it does not want to do anything more or anything better-the relatedinstalled IC is by definition sufficient and therefore does not need to be assessed.

Principle Two:

When a government, an administration, or an entity wants to do more of somethingor do it better, or both, it should identify the institutional universe in charge ofachieving the intended objectives. The IC of this institutional universe should becarefully analyzed to verify whether it (they) can do it, i.e., an assessment ofinstitutional feasibility.

Principle Three:

IC must always have an explicit purpose.

Principle Four:

When a government, administrative unit, or an entity determines it lacks sufficientcapacity to achieve an objective, it must either withstand or modify this objective, orincrease its capacity to the level required by its nature and scope, or somehow lower

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the ambition behind the objective while at the same time increasing its capacityaccordingly.

Principle Five:

IC is highly volatile and must be assessed and adapted continously; it is far easier toweaken capacity than to build it.

Princisle Six:

Any ICA should generate capacity as the analysis progresses instead of being limitedto a factual, static, contemplative description. At the end of any ICA process, theinstitutional universe analyzed should have substantially stronger capacity than beforethe analysis began.

-Pricnle Seven:

Development decisions made in any cultural environment should build on the ICcurrently available in the environment and reflect local capacity criteriae. In otherwords, a good capacity analysis system should be culturally unbiased.

These principles are implicit in the ICADS process.

5. For the frst three principles, ICADS can only be activated when the decision has been madeto increase or improve specific outputs or processes. Indeed, the first step of ICADS is to clarifyprecisely what the decision makers want to improve or enhance. This should be considered thebottom line of IC: everything starts when an administration-government, administrative unit, publicenterprise, cir other entity-has carefully defined what it wants. This can be called the base level ofIC, a sine gua non condition that should be met before capacity can be analyzed and/or further built.If we accept this premise, then ICADS will always begin with a thorough identification of projectobjectives, whatever the additional level of precision realized during the preparation process.Therefore, the initial definition of objectives should not be thought of as an a priori. In fact, ICADShas built-in flexibility that facilitates modifications to the initial statement of objectives. Quantitative

4 1ndeed, no ICA or ID strategy and process should imply a cultural model for strengthening IC. For instance, the spirit ofenterprise, profit motive, material security and self-interest, which are considerd as ultimate values and conditions of successby the 'developed' world, or the organization science 'stateof-the-art' that result from these values, should never be taken as'givens by ID specialists. In many instances (c.g., Africa in general, indigenous areas of LAC countries, and in many othercultumlly distinct regions of the world), thc interest of the local and ethnic communities may be far more important and indeed,respected than what any govemment may declam as being its national goals.

targets and expected inpacts can be adapted at any time, in conformity with evolving institutionalsituation or changing political environment (Principle Five) (also, see Institutional DevelopmentFunction (IDF)5. In fact, when ICADS is activated at the project identification stage, the objectivesnecessarily will be defined in an approximate way, and will be constantly improved as thepreparation work progresses. Indeed, one the features of ICADS is its use as a tool to refinedevelopment objectives as the information and data collected about the specific topics grows. Thisprocess does not end with implementation, since changes in objectives may be needed at any tirneuntil they can be realistically met.

5Sce pam. 89 below.

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Section I

Part One

Settine Development Objectives. Resources, and ImDlementation Strateg

ntroducti,on

6. Decision makers and their advisors seldom undertake a rigorous preliminary analysis beforedeflning development objectives, resources, and strategies. Even for major undertakings involvinghundreds of million of dollars, objectives and strategies are generally not well defined. This meansICADS Principles Two and Three are not customarily followed. Typically, there is a vested interestin not defining them with much precision, given that development objectives are often the expressionof political interests or because (the cost) of trying to achieve them has become lower than not doinganything. The result is usually overgeneralized announcements to the general population about howit will be affected or involved, with similarly generalized instructions to the task implementers abouthow they are expected to succeed at a higher performance level. Decisionmakers generally assumethat somehow more flexibility will result if subsequent changes are required to reorient theintervention. Decisionmakers though, who act transparently should be able to define more preciselywhat is in the best interest of the population and thereby design development strategies that are clearto all parties and to implementers in particular6. This is what Part One of ICADS is meant to do-tohelp decision makers and their advisors define clearly and comprehensively: (a) the intended outcomeof any development activity; (b) the resources needed; and (c) who should do what to ensure efficientuse of these resources to achieve the stated objectives.

Step One: Development Objectives

7. ICADS can be activated when a decisionmaker wants to obtain new or more outputs or dosomething more cost-effectively, or both. Form A, below, is used to help decisionmakers defineinitially what they want to achieve, and then to improve this definition at any time thereafter. Anobjective should not be confused with the process required to achieve it. For instance, 'to improvethe standard of living of the poorest farmers" is not an objective but a process, as suggested by theword 'improve." The objective should be 'farmers' purchasing power improved in real terms by20%." To ensure correct understanding of this outcome by the decisionraker himself and the ICanalyst, information must be obtained regarding the quantification of the intended output, and at thesame time a definition of impacts expected from every quantified aspect of the corresponding

VFor a more detailed understanding of this aspect, see below parm. 20-24 on govemance-related institutional capacity gaps.

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objective. Fmally, the beneficiaries (and/or victims7) of every objective must be identified as earlyas possible in the preparation process. Form A (below) includes information from a variety of actualcases. Both the exarnple shown and the comments that follow should help the analyst understand andfill out the form correctly.

'Indeed, development activities also make victims, in particular in structural adjustment opemtions, as has becn widelyacknowledged.

Country

DeveloDment Activity (a)'Institutional Capacitv Analysis DeveloDment System

Porn A; Development Obiegtives

General Oblective Larger number of agriculture extension service users, including wider coverage of the national territory and at the same time quality services delivered interms of making the technology transferred more in line with speciric regional characteristics. Uhimately, increase fanners'income over the next five years (b).

Component Development Objective Description Quantitative Indicators Expected Impacts BeneficiariesNictimsCode (c) (d) (e) (f) (g)

01 Technoloey Transfer 25,000 poor farmers reached by the Increased coverage So many per region:Technological packages adapted to production mix end of 1993 in 13 regions among poorest for pro- 9000 mid-level andof every farm, made available to poorest farmers 80% of production items included in duction increased by 16000 poorest: those

new technology being transferred 45% in volume and 15% with less than S400in productivity last year

02 Credit 44,000 farmers Increased coverage of 44,000 fahners:Financial support made available to the poorest 60% of small investment projects credit services to allow Regions: 1: 600farmers: actual acquisition of the necessary inputs 40% at least to use new technology for technological 2:2600to implement the transferred technology transferred to them improvement resulting 3:5000

in productivity increases etc.

03 Land Titlint 15,000 poor farmers having received Improved conditions to 15,000 farmers:15,000 titles for poorest farmers cleared a title in 5 priority regions accept technological Regions: 1: 2000

packages and their 2: 1000actual use resulting in 3: 500improved productiviy 4: 600

5: 900

'Letters refer to comments given next page.

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Notes from Form A

(a) Development activity can be anything from a simple activity, such as the improvement ofan administrative or a technical function, to more complex development programs, such asinvestment projects or structural adjustment programs, etc. Enter here its exact name.

(b) The deftnition of this general objective can be improved by answering the followingquestions within its formulation:

* How many more users does the decisionmaker wants to reach? At the end of howmany years?

* How much "wider" the coverage should be?

- How is 'quality' of services defined?

- YWhat does 'more in line with regional characteristics" really mean?

* 5How much should farmers' income improve over the 5-year period?

Of course, most of these quantitative indicators are specified and verified in the appropriatecolumn below. But it is desirable to enter elements wherever possible while defining anobjective. In the quantitative column, the indicators are disaggregated by component. Theaggregate figures that may appear in the general objective often help decisionmakers modifytheir decisions merely because the overall picture seems too ambitious to them.

(c) Every component should be numbered beginning with 01 to simplify the codification of thefollowing steps and aid identification of related component objectives when handlingresources or task information. It is desirable (but not absolutely necessary) to list thecomponent objectives sequentially or as nearly so as possible (some though are designed tobe achieved in parallel).

(d) The same recommendations used for the general objective apply, except that no quantitativeindicators or expected impacts need to be entered here, since appropriate columns havebeen prescribed for them. A good denomination of every component objective is expectedin this column, one that should be as precise as possible in terms of intended real outputs.

(e) Every aspect of the component objective that can be quantified must be quantified.

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(e) Every aspect of the component objective that can be quantified must be quantified.Information should be entered even at early stages and improved progressively thereafter asproject preparation progresses. This will help decisionmakers and their advisers betterdetermine what their decisions imply.

(f) For every quantitative indicator entered in the previous column, this column should answerthe question: What for? Why this arnount? Note that every aspect of these "expectedimpacts' that can be quantified must also be quantified in this column. Impacts on victims,if any, must also be listed in this column and the victims themselves described in thefollowing column.

(g) Beneficiaries and/or victims (the latter in particular in some structural adjustment operations)

should be identified as follows:

- who they are.

how many by region of the country.

* vwhat their characteristics are, and-any additional information that would help verifyat the end of implementation that the intended objectives have actually been achieved.Or, in the case of "victims," informnation that helps increase awareness about them,and possible mitigating measures.

8. Analysis. When the information related to project objectives includes this level of detail andprecision in quantitative indicators and expected impacts, and when the beneficiaries/victims havebeen identified in that manner, then decisionmakers will know exactly what they want and also that

they can formulate it. Although project objectives are always stated, they rarely achieve thiscompleteness and clarity of definition. It is easy to understand that when such a level of detail is

possible and actually expressed by the decisionmakers, the corresponding institutional environmentwill be more conducive to achieving the stated objectives than when these are blurred. This capacitycan be further enhanced when information included on Form A is transparent, and given a widecirculation, inviting commnents and suggestions, in particular from potential political opposition andfrom intended beneficiaries. In addition, to allow for better ideas to emerge and to improve the finalformulation of objectives, it will also help prevent those who oppose the intervention from declaringafterwards that if they had been consulted, they would have set up objectives differently. Theactivation power of a given objective formulation depends on the capacity to transparency andconsultation/participation-which is easier in democratic regimnes than when the decisionmaking

process is only vertical. As ICADS makes its starting point the transparent definition of objectives,

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interview process with decisionmakers and their advisers, the IC analyst will obtain more informationthan could have been captured initially. This is because filling out form A is a "thinking" process(as in all other forms), that facilitates a clearer formulation in the mind of the decisionmakers. Toask them to set targets and think of a possible expected impact for every target, bearing in mind, inaddition, specific beneficiaries, leads them necessarily to improve the image they have of theconsequence of their own decisions. This process is essentially an initial ID process. Finally, whenthe last three columns include accurate information and data, the form can be easily used for projectevaluation without any other instrument or rhetorical statements, as usually found in traditionalevaluation reports. The use of Form C (see below) makes it easier to use Form A as an evaluationinstument because it provides disaggregated information about what failed and what succeededduring the period under evaluation.

Step Two: Activities/Resources

9. When development objectives have been set, decisionmakers should clearly state the amountof financial resources available to achieve them and exactly what they are for. Information on ForrnB below must answer these questions as thoroughly and clearly as possible at different stages ofproject preparation. The fnancial resource amounts and destination information must be entered byspending category for every project component. The more detailed and disaggregated these columns,the more useful the form during the preparation process, as well as during implementation. Many'blanks' will occur on this form when filled out at earlier stages of project preparation. However,they will serve as reminders to decision makers and their technical advisors to bridge them as soonas possible because they must know the cost of achieving their stated objectives. Finally, it isimnportant to allocate institutional responsibilities per category of activity at the outset wheneverpossible.

10. Anaysis. The code system used is deliberately simple to facilitate organizing thisinformation. In addition, experience in using Form B has shown that it becomes an importantaggregate accounting tool if the dollar column is divided into as many accounting categories as existin the targeted administrative environment. This form also helps discern the real distribution ofinter-institutional responsibilities for irnplementing the project; often, the first time the form is filledout, decisionmakers or other informants realize that the distribution of functional responsibilities mustbe looked at more carefully. In some instances, this process helps to understand that inter-institutional relationship agreements should be defined and formally entered into, since manyimportant functions belonging to different entities must be handled harmoniously and with closecooperation. The awareness of the need for an explicit network of interinstitutional relationshipsoccurs more easily when the monetary value of every responsibility is entered together with itsfunction. This also increases cumulatively the overall IC as well as the program coherence as

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resources are made available in line with the nature and scope of the stated objectives. This isbecause capacity is lower when resources are not well defined or not commensurate with theobjectives and resulting work programs, or when entities responsible for managing these resourcesto achieve intended outputs are not known. Formn B is given as an example, and includesinformation that follows from what has been entered on Form A. The notes that follow should helpICADS users in filling out the form.

CountryDevelooment Activity

hAtitutional CaDachy Amivlis an Develoomen System

Form t: Activities/Resourea

| Code (a) Description of activity(b) USSTotal(c) Credit Money Services Vehicles Fufnitute/equip. Salaries Subaisallowance Constsuetion- Admnn.Unlt Resp. (d)

01 01 Contracting private 5S00 5800 INDAP/ Technologytechnology transfer fimi __ transfer Depatment

01 02 Contracting 132 technical 1073 1073 INDAPIPersonneIsupport consultants Department

01 03 Hiring additional 423 INDAP/Personnelpersonnol __ _ Departnent

01 04 Acquisition of 9 additional 123 123 INDAP/Patrdmonyvehicles _ Department

02 01 Deliver credit to 44,000 1I000 i0ooo INDAP/poor faerrs Credit Depatrment

02 02 Sub-contract two studies 167 167 INDAP/Agricultureon snull investment Depermentfeasibility

02 03 Acquire equipmnent for 70 102 102 INDAPiPatrimonyoffices . Depaetment

02 04 Contncting 70 additional 434 339 45 INDAP/PersonneltAff ., _ Depatmelnt

02 05 Contrcting training IS0 IS0 INDAP/services Technology transfer

_____________ ___________ _______________ D epartm ent

03 01 Contracting consultants 17 17 MBNIDCPRfor inforrnation systemdesign - _

03 02 Acquiring equipment & 421 421 MBN/Cadaeterhardware/software

|TotIl 26745 (e) 1I000 7242 1_23 5 39 45 MA/Special Unit ()Note: Activities have been listed in ch lnoIogice orer o every component

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Notes From Form B

(a) Activities/resources are coded with four digits: the first two are taken from Form A. Withinevery component objective, activities/resources are codified with an order number startingwith 01. The order can be sequential in the order the corresponding resources are to bemade available; or by importance: largest amounts entered first. Or any other order as longas its rationale is specified, for instance, in a footnote as in the example above.

(b) An "activity' is a global concept that can be called a "category of expense," such as the onesentered on the form "construction" 'equipment' "services," etc. In other words, the questionto ask is 'How much money has been allocated to "construction"...to acquiring consultantservices.. .to acquiring equipment...,

(c) Enter the total dollar amount for every spending category. Here it is expressed in thousandsof dollars. Do not forget to specify the unit used.

(d) Enter the name(s) of the entities and the administrative units responsible for both handlingand managing the corresponding amount of money, and achieving or contributing to theachievement of objectives listed on Form A.

(e) This total should correspond to the total amount of money allocated to the entire project forachieving all objectives stated on Form A.

(f) This is, in general, the specific administrative unit or entity in charge of coordinating theentire project. Among other things, such an unit is responsible for channelling funds in timeand supervising their adequate use.

SteU Three: Tasks

11. Designers of development projects usually do define their objectives and the resources madeavailable to achieve them. However, usually decisionmakers, and specifically their professional andtechnical advisors, assume implementers know how to use the money available to achieve the stated

objectives. However, thousands of supervision reports (i.e., implementation experience), regardlessof financing source, reveal that this is far from being true. In fact, it is estimated that about half ofall development task implementers do not know what the tasks are. When they are told globallywhat to do, they rarely know how to execute their tasks in the most cost-effective manner. Often,when task implementers deliver the output, their supervisors tell them its not what they expected.The simple reply is usually "the intended outcome was never specified". The same observation often

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applies to Bank specialists when they tell Borrower implementers that what they have actuallyachieved does conform to the loan agreement. Form C, described and illustrated below, is intendedto make explicit how to transform allocated financial resources into the achievement of developmentobjectives. It is desirable that the tasks specify what to do to:

(a) acquire the goods and services necessary to achieve project objectives;

(b) use them efficiently; and

(c) sustain the benefit of using them as defined as long as possible.

12. The task form should offer a precise description of what to do for what intermediary output,by what date, and who should do it. The tasks should be as disaggregated as possible to improvethe quality of ICA and increase the possible uses of Form C for other purposes, as described in para.13. The maxiimum desirable disaggregation of tasks has been achieved when their descriptionindicates a task to be performed by a single person by a given time. Even when the same task willbe executed by many implementers throughout the country (e.g., 'carry out visual health checks at100 health posts available in several regions of this country"), an additional indication, such as alocation, should make it unique (e.g., 'carry visual health checks at Makulele Health Post").Nevertheless, at identification or preparation stages, the flexibility exists to dissaggregate tasks lessthan ultimately necessary at implementation stages. However, the quality of the ICA process willbe higher when a maximum disaggragation of tasks is achieved.

13. Analysis. In fact, the task form is the most original and important feature of ICADS, whichmakes it an ID and management tool. When specialists responsible for defining information in FormB have to designate who should do what to make it work cost efficiently, they usually improveproject design. They can focus sharply on objectives and allocated resources more in line with whatis actually required. The simple act of turning their 'technical vision" of the development processthat applies in a disaggregated way into their unique objectives makes them more lucid about thepractical implications of their professional reconmmendations. Form C than rapidly becomes a keyinstrument for': (a) completing project preparation; (b) carrying out the ICA work; (c) organizingthe interinstitutional responsibilities, which is a coordinating device; (d) organizing the distributionof work within implementing entities'"; (e) establishing periodic work plans as contractual

'For a more detailed description of this tool, see Section m below.

xindeed for I(c) and (d) Form C can bc printed out by entity (all tasks of a particular entity would be entered) or by taskinplementer (all tasks of an individual implementer would be entered).

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understandings between task implementers and their supervisors" about what to do, how to do it,and for what precise result/output; (f) serving as the basis for key personnel management functions,

such as accountability and performance evaluation; and ultimately, (g) being used as a monitoringtool, feeding into Form A to carry out evaluation work12.

"Which becomes easy if there is a task form for every task implementer. Note that the same can be organized between theproject coordination unit and every inplementing entity separately for the same reason.

12For the monitoring work, every task implementer can send (on a weekly or bi-wekly basis), a copy of his or her task formwith the last two columns filled out for tasks showing that the due date is past. The accumulation of task outputs should helpdetermine whether the project is actually heading towards achieving objectives as descnbed in Form A.

Cs Tu

Tuk Code Tle Dncdkc Tmk OmUpI (A DPii Tok h mtk Ob_violm| (|) _ ' h°~~~~~~~~() (c) (d) (

0102 01 C OI Wdtc int cd ctt ofm (rOR.) dblv (a ) t tihc lt- ebed TOR d_ea c d ftUr c iecailtim %riUm tdo Mr. h_eawbec, (b) wbht wM. k se d.lm I w4 timc fenm; (c) MeO Diviuik (deput , dle..). . Div.an c sethco ceio aita otor _ d. bdiua webk"epob aid cci; mid 0) hw thd im woidd be cui4tod & By 03-tS-92

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By 0531-92

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0-106-92

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Notes For Form C

(a) Seven digits. The first four come from Form B. The last three describe in a logical orsequential order, what is to be done to ensure adequate use of the funds available for a givenactivity (the two digits in the middle) to achieve a stated objective (the two first digits). Verysoon after starting to use Form C, project implementers will know by simply reading taskcodes, what objective and resources belong to each task.

(b) Describe 'what to do" within available resources for a given activity as described on FormB to achieve objectives prescribed on Form A. The listing of tasks should follow a logicalorder. List first the tascs describing what to do to acquire the goods and/or services withina given activity: these tasks can be called 'procurement tasks." Then, list the tasksdescribing how to use efficiently these goods and/or services: these tasks can be called'development tasks." Finally, list the tasks describing what is going to be done to ensurethe sustainability of the benefits obtained out of the efficient use of these goods and services:these tasks can be called 'sustainability tasks.' For instance, in Form C above, tasks0101001 to 0101006 are "procurement tasks"; tasks 010107, 0302017 and 0302020 are"development tasks"; and tasks 0302018 and 0302019 are 'sustainability tasks." It isimportant to describe the tasks in such a way that task implementers will have no doubtwhatsoever, as to exactly what the task giver wants them to achieve"3 .

(c) Task implementers should not be limited to know what to do. In addition, they should knowwhat kind of output is expected of them and by what date. This should help them betterdetermine the extent to which they will be capable of delivering it, and therefore betteridentify the possible skill gaps. But it also helps them understand the limits of theirresponsibility in terms of accountability as task implementers. When task outputs are welldefined, it should be easy to reconcile their aggregation with objectives as defined on Form

A. Task outputs should be gradual steps, sometimes sequential, towards achieving projectobjectives.

(d) Ideally, enter here the name of a person-only one when the task has been disaggregated asappropriate. However, when Form C is filled out, at early stage of project preparation, itis unlikely that the decisionmakers will know who is going to implement the correspondingtasks. In such cases, the name of an entity and its specific administrative subdivision shouldbe entered as responsible for task implementation. Thereafter, as the preparation workprogresses, it will become possible to identify who in this particular administrative unit willbe personally responsible for task implementation.

"In fact, a discussion is desirable between the task giver and the task implementer once individual task forms are ready.In such a discussion both must ensure that there is a common understanding on both the expected task output and the way toachieve it. In addition, any possible skill gap between what the implementer knows and what he should know for successful taskinplementation (also using information in column (c)), should be assessed at this time and cross-checked with informationobtained during the skill gap analysis carried out during ICA (see below para. 40-44).

-19-

(e) The last two columns are to be used for monitoring work. This (e) column should bechecked when the corresponding task has been achieved as described, and the exact outputobtained by the due date as indicated.

(t) If there is any difference between the information in columns (b) or (c) or (d) and whatactually happened, the following information should be entered in column (f)14:

s in what way is it different?

* why is it different?

* wlhat is it that the task implementer recommends doing about it as feedback to help

the supervisor make an appropriate decision.

Supervisors may want to set a schedule for task implementers to report to them in thismanner.

S_e Four: The Interinsttutonal RelationshiRs Ma2 aIRMa)

14. The first three steps should lead analysts to help decisionmakers determine in a systematicway: (a) what they want to achieve at the end of the development activities being defined; (b) withwhat resources they would do that and through what categories of inputs; and (c) exactly who shoulddo what to ensure at the goods and services corresponding to these activities would be acquired andused efficiently and that the resulting benefits would be sustained over the longer term. However,we do not know yet whether this is feasible, i.e., whether the institutional universe in charge ofinplementing this program has the capacity to do so. Before we can carry out an ICA, theboundaries of the specific institutional universe that will implement the corresponding developmentactivity must be determined. This is the purpose of Step Four.

15. WhiLe filling out Form B, the analyst will learn what entity (and possibly its administrative

units and subunits) will be responsibile for various activities/resources. Filling out Form C willprovide more details about the particular subunits to which task implementers belong. It is at these

two stages that the analyst should start preparing an IIRMap. Entities and their administrativeunits/subunits should be entered in no particular order on a large sheet of paper-specifying theirnames and function, and, when the information is disaggregated enough, their roles and tasks. Inaddition, while filling out Form C, the analyst should enter an asterisk (*) at the left of the TaskCode for every task of an interinstitutional nature, i.e., when its full execution depends on the taskexecution of other entities. Then, at the time of preparing an IIRMap, a line should be drawn onForrn C between any two or more entities identified as having tasks of an interinstitutional nature.This will help the analyst visualize clearly entities with interconnected work programs or functions.

"4 Also sec below, Section HI, how the task form can be used as a monitoring tool.

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Finally, in an annex to the Map there should be two additional types of information: (a) how statedrelationships are going to work; and (b) what is the legal or regulatory basis (or absence thereof) forthem to work as described.

16. An example of this Map is provided (pages 21-22) using information from real cases.Observe that the organization chart format should be avoided. Indeed, sometimes hierarchicalrelationships are entered for the purpose of locating a particular organizational unit within itsinstitutional context. What is at stake in an IIRMap is the interinstitutional relationships, not theinternal ones, which to be reviewed as part of Step Seven. Furthermore, what is important in theIIRMap is not the hierarchical relationships but that they are implementing entities, and have a roleto play, which sometimes will happen only if others act in a coordinated and concerted manner. Theannex to the Map should facilitate understanding how the network of relationships will work: i.e.,who will activate the relationship, what the designated entity should do, and if this entity does notreact, what should be done. Finally, the analyst also needs to know the current legal or regulatorybasis for the relationships to work as described. This does not mean that formal agreements mustalways be entered for interinstitutional relationships to work efficiently. It means that one shouldquestion whether capacity gaps will or will not result from the way these relationships are organized,whatever the corresponding arrangement or the lack of it. Excellent relationships have been obtainedeven in the absence of any formal agreement between the parties involved; conversely,institutionalized relationships may become delinked even though a formal agreement has been enteredinto by all parties. More detail will be provided about this aspect in Step Six below.

MAPA DE RELACIONES INTER- INSTITUCIONALES

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Institutional Capacity Analysis and Development SystemInterinstitutional Relationships Map

Page Two of Two: Institutional Universe in Charge(of achieving development objectives in the most cost-effective manner)

How the Relationships Work

2 DGB-FIDEC DGB establishes the norms and enforces them. FIDECmust comply in particular with a creditworthinessevaluation and appropriate disbursement procedures.FIDEC must regularly demonstrate this compliance.(Based on DGB Norm Number 436187.)

16 CT-SECOFI SECOFI establishes the trade policy every year. CTmust use the same criteria when evaluating investmentproposals. (Based on Ministerial Decree 121/90.)

17 CT-SARH Same as above for agroindustries (Ministry ofAgriculture Note Number 257/90.)

20 CT-CONCANACO CT must take into consideration retailers associations'viewpoints before making any lending decision. (Basedon Decree 223/87, Banco Central.)

22 CONASUPO-SECOFI SECOFI establishes a list of priorities for food anddistribution and is responsible for enforcing them.CONASUPO must then see that priorities are used whenlending for retailers. (SECOFI Norm Number 144/90.)

etc...

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Part Two

Tracking. Interpreting. and Measuring Institutional Capacitv Gaps

Introduction

17. As explained in para. 14, the first three steps tell the analyst what the government wants toachieve through the development activities that it has defined, what resources/activities will bemobilized, and what operational strategy will be used. Once we have a JIRMap, we also know theinstitututional universe involved, i.e., the group of entities responsible for using the allocatedresources to achieve expected outputs. We now need to investigate thoroughly whether thisimplementing institutional universe has the capacity to fulfill the corresponding responsibilitiesadequately and efficiently. The next five steps of the ICADS will lead the analyst to assess thiscapacity from five different perspectives that are commonly found in development activities in mostcountries of the world. They have been consistently reported in supervision reports, periodicaloperational reviews, and analysis of experience by the Bank and others, including the Borrowersthemselves, as major causes of failures or difficulties while implementing development activities ofall types. In Part Two, we will review them one by one, providing definitions and scope, givingexamples, and then proposing a way to identify and measure them against development tasks, andfinally, to address them. Indeed, it is important, following ICADS Principle Three (above para.415), that every task be assessed in terms of possible difficulties that may emerge from theinstitutional setting, whether it is internal or external to a particular entity within the universe ofimplementing institutions.

How to Proceed

18. Once Forms A, B, and C and the IIRMap are available, the analyst should select one or moreinformants and define beforehand who among them will be interviewed about what IC category.Every informant should be given a copy of Forms A, B, and C and of the IIRMap at the momentof setting the interview date and should have a copy in hand while answering questions. In fact, thequestions asked for each IC category are similar, since we want to obtain information about possiblehurdles in implementing particular tasks from specific IC viewpoints. Before starting the interviewitself, the analyst should explain its purpose and that it will be necessary afterwards to obtainverification of the information he or she provides, from immediate supervisors. The analyst shouldexplain that this verification is intended to accomplish five things: (a) the supervisor may learn moreabout what the informant has to say in terms of capacity gaps; (b) he/she may disagree with someof the information provided; (c) he/she may want to add precision or supplement the informationgiven; (d) he/she may also later want to discuss with the informant the problems revealed and theirimplications for the project design; and (e) it imbues the final identification of ICGs with moreauthority and formality. The analyst, then, should ask the informant to carefully read the tasks one

"Also, for more detail see text referred to in footnote 1 above.

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by one, and identify potential or actual problems that implementers may have to face within aparticular IC category. Although many ICGs are common to several tasks, it is always moreefficient to have the informant person being interviewed all tasks one by one, since theirdisaggregated nature can trigger awareness of capacity gaps that might not occur otherwise. Ofcourse, it is, not necessary to enter the description of an ICG more than once; just enter a referenceto show that a previously identified ICG applies to other tasks as well.

19. The informant then reads the tasks one by one; usually, they are reviewed quickly withoutcomment, meaning that no problems are uncovered. After each task for which no ICG has beendetected, the analyst should check column '5U in Form D (below), meaning that there is no identifiedICG for the paricular task from that specific IC viewpoint. Conversely, if the informant identifiesan ICG, he should describe it as precisely as possible. However, the analyst should insist on morethan an identified possible or actual problem (i.e., tracking 1CGs): he/she should ask in what waythis problem can affect the precise task being reviewed (i.e., interreting TCGs). Infornation abbutthe problem itself and how it will affect task implementation should be entered in the appropriatecolumn of Form D. Finally, one more question is asked: How serious is the problem identified interms of implementing the task efficiently (i.e., measuring ICGs' severity)? If the answer is, "thetask cannot be implemented at all if this problem is not solved in time," column 61" under "GapSeverity" should be checked. An almost-possible-to-execute-task would be rated "4". An almost-impossible-to execute-task would be rated *2. " A *3" corresponds to a mid-point severity in termsof task feasibility. Forn Dv, which deals with ICGs from the skill viewpoint, is somewhat differentfrom the Di to Div forms, and is explained under Step Nine. Steps Five to Nine are describedbelow, including a typology of common ICGs found in real cases from over 60 countries for everyone of the IC categories and subcategories listed.

SteD Five: Identification of Institutional Caacity Gaps (ICGs) from the Rules of the Game (ROG)Viewooint.

20. This category of ICG has been explained in detail in a previous publication"6 . The Rulesof the Game (ROG) perspective includes the following topics: governance, constitution, legislation(general and sectoral), regulations, and those ROGs based on cultural patterns, i.e., rules that arenot formally written. When problems relevant to one or more of these topics are identified as being

actual or potential hurdles to specific tasks (listed in Form C), they are said to be ICGs from theROG viewpoint. This category of IC is extremely important because it represents the wholeinstitutional background within which development objectives are going to be articulated andachieved. This has been confirmed by evidence that far too often the relationship of the institutionalmacro-environrnent to development activities has been singled out as the main cause of task failureor difficulties. Indeed, frequently decisionmakers set development objectives that necessarily involveinnovations without considering whether the current ROGs would allow the corresponding workprograrns to effectively take place. In addition, often they want to improve quantitative or qualitative

"Sec footnotw 1.

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aspects of public sector life, sometimes knowing that they are going against established rules,including those resulting from deeply-rooted cultural patterns, without trying to analyze whether thisis feasible. However, experience based on such cases is quite clear: ROGs will not be transformedautomatically or merely due to development activities. They tend to be intractable until they areunderstood as severe impediments to development and are then dealt with separately from projectimplementation. This requires explaining why the current rules must be changed and in what waythis will positively affect future progress in general, and the achievement of the projects at stake inparticular.

21. Informants interviewed about the significance of the ROGs are actually identifying potentialor real difficulties created by the current status of governance, and the legal and regulatoryframework, formally or informally defined. Their responsibility is immense because they may helpthe IC analyst determine whether development objectives are well defined, sincere, and authenticallyshared by a large majority of the population-including the political establishment and oppositionparties, and possibly unions or other organized groups of beneficiaries (and/or potential victims) ofthe projected development process being analyzed. Most serious ICGs under this topic includeaspects that apparently are not subject to change and that quite often non-government peopleinvolved-e.g., Bank staff or project 'beneficiaries' when they are not consulted-are even reluctantor fear to question or mention. This is the case when decisionmakers in power do not enjoy a senseof legitimacy in the population in general, and those who must implement the project at stake orbenefit from it in particular. This subcategory of ICG is very serious indeed but cannot be directlyassessed by the analyst for obvious reasons. However, when decisionmakers know that they arelegitimately in power and that this view is shared by the political opposition and by the public ingeneral, it will be very helpful if they themselves permit the IC analyst to interview anyone in thegovernment to ensure there has been adequate consultation and participation, and that viewpoints ofmost parties involved have been taken into consideration-even if not necessarily adhered to. Inaddition, analysts can also use their country experience, common sense, and the results of informalconversations during the process to determine whether ICGs of this nature-alluded to in confidenceby the government officials interviewed--actually exist. The list of ICG subcategories under theROG heading (Table, page 28) suggests in general terms what to look for when interviewinginformants, and in subsequent analysis of capacity based on the ROGs.

22. There are other, more commonly found ICGs from the ROG perspective. They include, inparticular, constitutional dispositions that individual projects may be unable to question but that willbecome serious hurdles to certain implementation tasks. There is an ICG from this viewpoint whenthe effectiveness of a task or a cluster of tasks is threatened by such constitutional provisions. Forinstance, privatization and private sector development may be difficult when constitutions stipulatethat the State owns every natural resource of the country (such as forests, hydrocarbons, mines, etc.)as in Bolivia and Brazil; also, when the constitution includes dispositions that protect civil servantsfrom being fired, even though a public entity or a service is no longer necessary (many casesthroughout the world). In addition to constitutionally induced ICGs, examples of extremely weakor no legislation for new sectors (e.g., environment) are commonplace in many projects or othertypes of development activities. Similarly, contradictions between general and sectoral legislation

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are frequently encountered. Most recently, this has been the case in privatization programs, publicsector reforms in general, and in the creation or modernization of specific subsectors such asenvironment, natural resources management, industrial restructuring, and so on. Finally, even wherespecific legislation exists and appears comprehensive relative to given development tasks, the existinglegislation often is not followed up or reflected in related regulations that -are easily interpreted andinternally consistent, and does not specify how regulations will be enforced. This can paralyzedevelopment activities. Therefore, careful reviews are necessary by IC analysts and their informantsto detect all potential hurdles-which are many in this regard.

23. Cultural patterns are generally negeted in ICA work. However, they may be the principalcause of failure because they sometimes encounter critical resistance from task implementers or byintended development beneficiaries. Mudc dowmmentation exists about mistakes made in countrieswhere the beneficiaries' cultural panrm differ (sometimes radically) from those of thedecisiomnakers or when the donors try to Impose in one way or another a given development pathwithout being "culturally cautious," leading to complete failures and resulting in a waste of resourcesand tine"'. When decisionmakers have set development objectives they must consider whether workprograms and "benefits" resulting from their development choices are going to harm cultural patternsand sensitivity among the parties involved. The donors who contribute to preparation work that leadsto development decisions should ensure that this principle is enforced.

24. The following page provides an exnample of how to fill out Form Di. On page 28, a selectedpOlogy is offered for guidance comprised of the ICGs most commonly found in capacity analysis

throughout the world. The proposed list is not exhaustive nor does it cover the universe of capacitygaps that may exist; however, it does include hurdles that have been reported in supervision reportsof World Bank operations by both Bank and Borrower staff. It is recommended that they be usedas a checklist, and every question will at least serve a didactic purpose for the informant, fordecisionmakers and their advisers. The capacity element codes (last column) will be helpful forconsolidating identified ICGs (Form Ei) and ultimately deciding on the final capacity of a giveninstitutional network in implementing a specific work program or development plan.

17Exampls include Livestock spocialiss imposing the development of horned livestock on an Indian community in whichhorns are taboo, resulting in the slaughtering of all the animals delivered to them. And another Indian community refusing touse water faieidies recently installed in their viBages because it threatened the ancestral habit of young women to fetch waterin a nearby water weU and at the same time, meet their future companions. More senous cases include corrupt practices andinfighting between groups to try to rctain or gain power.

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Country

Development ActivitvInstitutional Capacity Analysis and Development Syster

Form Di: ICGs from the ROG Viewpoint

Task Code Descriotion of ICG and explanation about their nezative irnpacts ICG Severitvls1 2 3 4 5

01 01 001 No procurement legislation/regulations makes it difficult to obtainadequate procedures. This may not help current efforts to acquire xxthe corresponding serviceas in the moat coat-effective manner

0101 002 xx

01 01 003 LAck of transparent procedures does not help ensure a fair and xxaccetable evaluation process

01 01 004 Will be based on political influence mather than on technical xxgrunds. I cannot reasonably present my technical recommendationsfor award; instead, I may be forced to follow unwritten instructions,warding the contrct based on nontchnical criteria

0101 006 xx

0101 007 xx

03 02 017 xx

etc...

"" means the task cannot be implemented at all because of the ICG shown; '2" means that the ICG maakes it almostimpossible to execute the task; "3" is a mid-point severity gap; "4" means that it is possible to execute the task almost withoutdifficulty; and "5" means that no ICG has been identified. Of course, more information on the ICG and on how it may hampertask implementation is entered in the appropriate column.

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ROG-Related ICG Selected Tvyolor%P

ICO Subcateeorv Subcateor Name Elements of Capacitv Code

ROGGOV Rules of the Game: Governance- Recognizable rle of tbe State (by ROGGOVIrelated ICGs sector)

Leggimsay of decision-makers ROGGOV2

Tranuparency of procedur ROGGOV3

Pazticitory praoccs ROGGOV4

Sarate judicial syem ROGOOVS

Efficient/firjudicial symm ROGGOV6

ROGCON Rulks of the Game: State Flexibility in ownehip definition ROGCONIwnehip of ntional wealth and

Civil Service flexibility Role and impact of performance in ROGCON2civil service nageme

Flexibility in the definkion of the Whether Siven public finctions ROGCON3role of the state can esily be ailowed to become

private sector fmctions

ROGLEG Adequate and complt legislation Nothing in the generilegisation ROGLEGIpevens inplemening any pan ofthe propoed work progm-

Genenl legislation provides ROGLEG2definitions.. required by proposedprogram

Rlvant ectotal legidation Sectol legisation does not ROGLEG3conadict the genal legidstion

Sectoral legislation provides ROGLEG4definitions as rquired by progmmat stke

ROGREG Relevant regulation Sectoal legisltion has been ROGREGItranated into adequate regulations

Rckvant regulationrs are clear and ROGREG2comprehensive

ROGCUL Cultural pattems Cultural pattems of implementers ROGCULIand beneficiaries not harmed inany way by proposed workprogram

"Tbe selected ICGs and corresponding capacity elements are based on operational experience within and outside of WorldBank opertions. This list should be considered as covering about 80% to 90% of the capacity gaps gencraUy found to impair

the implementation of development activites. It is a good idea to use the whole list when carrying out ICAs and rate in theconsolidation Fonn Ei (see below) those capacity elements that are not rmievant to a particular project as '5' in addition to thosethat are relevant but for which no gap has been identified.

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Step Six: Identification of Institutional Capacity Gaps from the 'Interinstitutional Relationships"(TIR) Viewnoint.

25. Decisionmakers must select an implementing institutional universe and organize the way theyare going to apportion responsibilities. This is an aspect of organization that is largely ignored orneglected. The boundaries of the institutional universe?' in charge of development activitiesunfortunately often depend on political considerations rather than technical ones. Ideally, mostrelevant entities should be selected and given their share of responsibility according toimplementation needs. However, often some functions are not in the available institutional universe,in which case they obviously must be created, preferably in one of the existing entities or separatelyif their scope and importance so warrant. In addition, if two entities perform similar functions, the

one not receiving assistance is likely to become an opponent of the program if selection criteria arenot clearly spelled out. Obviously, such a decision could become an ICG in itself. Duplicatefunctions for the implementation of certain tasks should not exist if this is identified as an ICG. Ifthey can be justified, by definition they are not redundancies but may have been poorly named forexample. But if the duplication is real, then it is an IC weakness that may affect the developmentprogram or other development activities. IC analysis should identify the critical interinstitutionalrelationship network, how it will work, and whether a legal, regulatory, or even informal basis existsfor the entities to work as defined. This would normally have been done if Step Four wasaccomplished and if an IIRMap were available. Based on the information on the Map and on FormC, where tasks with an interinstitutional character have been identified with an asterisk (as explainedin Step Three), the analyst can begin the interviews using Form Dii below.

26. It is not unusual to find that two or more entities are involved in the implementation of asingle project or work program and do not even know each other. They have not been told initiallywhat their roles are or that they will be responsible for spending large amounts of money efficiently.They were never told that they would have to be accountable for this money, i.e., for spending itefficiently. They were also not told that they would have to depend on other entities' tasks toperforn theirs efficiently. Of course, this situation, in which the sharing of institutionalresponsibilities remains undefined or ignored, represents the least possible capacity. It is importantto identify the nature and scope of the particular ICG and determine precisely how it will affectvarious tasks. Sometimes entities have been well selected, told what their respective roles are, and

how their work programs are interconnected, but find themselves paralyzed because no specificagreement, formal or informal, has been entered into between those that must work together. Whatis important here is not necessarily a formal agreement between two or more entities. Any kind ofagreement is acceptable as long as the respective tasks can be performed successfully and withoutdelays. Again, the specific ICG must be identified but also with an explaination of how it mayimpair task implementation if not dealt with in time.

'ln ICADS, this concept includes not only the number of entities selected to become development implementers of specificaspects of development programs, but also the ROGs and IIRs that are going to govern the way they will operate to fulfill theirnew or modified mandate.

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27. The procedure is the same as in the previous step. After selecting an appropriate informantand providing him/her with the same introductory information and Forms for filling out.Form Di,the analyst should ask the informant to focus on the tasks marked with an asterisk on Form C.Then, he will ask the informant to read these tasks one by one to deternine what in the currentinterinstitutional relationship setting, or in the one to be set up for implementing the particulardevelopment activities under consideration, may make efficient and timely implementation difficultand impossible. He will have to identify ICGs of the types alluded to in the previous twoparagraphs. It is extremely important for the quality of the analysis that the informant explain clearlywhy the ICC identified would impair task implementation. For instance, it is not enough to state thatthe two entities in charge of a task do not have any agreement to work together. One should identifyalso in what way this is a problem for implementing this task in practice. It is not sufficient to statethat the task does not correspond to an existing function within a network of three entities holdinga complementary responsibility: in addition, the informant should explain how this is going toprevent implementers from executing the task efficientiy. Here, too, the grading of ICG severitywill help informants review their own analysis of the gap and better assess the potential effects ICGscan have on task implementation, which should help determine the relative importance of the ICGidentified. Form Dii below provides some examples of IIR-related ICGs taken from the same casesas above. A typology of IIR-related ICGs most commonly found and reported in operations is givenon page 32. As in the previous examples, it also can be used as a checklist for both analysts andinformants.

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CountryDevelopment Activity

Institutional Capacity Analysis and Development System

Form Dii: ICGs from the HR Viewpoint

Task Code Descrintion of ICGs and explanation about their nerative imoacts ICG Severit

1 2 34 5

01 01 001 TORs for the extension service consulting firm to be hired for xxdelivering the corresponding services to poorest farmers must includea description of relationships with other entities, such as the RuralConmunication Unit of the Ministry of the Interior and the LandTtle Department of the Ministry of Patrimony. No formalrelationship has been established nor were they told how they shoulditegrate their planning activity so the farmers would receive landtil and extension services in a rationally phased manner to increasechances of success. Therefore, one of the most important features ofthese projcct objectives would be missing from the outset.

01 01 002 xx

01 01 003 Administraive unit from the Ministry of Finance must participate. xxBut it has not been given the mandate to play a facilitating role forthis particular task, which is urgent (see date). Therefort, if it is toapply its usual review norms, selection is going to be delayed.

0101 004 xx

01 01 005 xx

01 01 006 _ xx

01 01 007 Supervision has to be carried out locally through regional agencies of xxthe cental government and their counterpart agencies from theprovincial authorities. Private firms are going to operate in allRegions, but only half of them have central governmentrepresentation and even less have a provincial unit for tie supervisionof such services. This task cannot be executed in tinie.

etc...

21See footnote 18.

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IRR-Related ICG Selected Tvoolo2

ICG Subcate2orv Sub6aterorv Name Elements of Capacitv Code

IRRRES Institutional Relationships: All implementation functions IRRIESIComprehensiveness of required have been assigned toassigned functions for project every entity involved, thusimplementation identifying thQ implementing

institutional univere

Relationships Netork well AUl R-relat tasks to be IRRREMdefined implmenated by entties with

an understanding aboutrespective roles

Agreemens etered into Wherever neceary, an IRRRES3agement bha been enteedinto between entities having torelate formally or informally

RPAR Potential opposition Directly or indirtly IRR WUARItsk will not be opposed bynon-decisionmakers

Beneficinries' agreement Intended beneficiaries IRRPAR2consuled and their viewpointconsidered: their role weildefined and accepted

22See footnote 19.

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Step Seven: Identification of Institutional Capacity Gaps from the "Internal Organization' (ORG)Viewpoint

28. This element of capacity includes everything that depends entirely on the entity itself. Aswe have seen, the permanent and circumstancial mandates given to an entity do not depend on theentity itself but on authorities above it, and, in principle, on the society as a whole. Once given arole and a mandate, and hopefully the resources which must go with them, the entity must organizeitself the best it can to deliver what is expected. Whatever the role and the actual resourcesassigned, there exists a 'most efficient and cost-effective way" of getting organized to deliverexpected outputs. This does not mean that the delivery of these outputs is always possible withinany kind of resource constraints, under any kind of circumstances. But if an entity's managerbelieves that he/she cannot deliver for any reason what is expected from it, it is his/her very firstresponsibility to state this clearly and professionally, including information about the maximum onecan hope to reach within the particular limitations and constraints (ICGs) that are being madeexplicit. When decisionmakers assign a responsibility to an entity to implement certain developmentactivities, its managers should know what this implies and provide a response as soon as possibleabout the given mandate, especially whether it is feasible. Therefore, any entity should be in aposition to carry out ICA and update it routinely. ICADS is also intended to help entities with anongoing assessment of their capacity to deliver normal or exceptional mandates, so as to letdecisionmakers know how much they can stretch their current capacity and to what extent an IDprocess is necessary if more is demanded of them.

29. This IC viewpoint generally includes the eight sub-elements listed below and described in thefollowing paragraphs. Form Diii (page 34) should be used for the identification of these sub-elements as part of the "Internal Organization' viewpoint.

(a) internal organization: distribution of functions;

(b) internal organization: internal relationship flows;

(c) internal rules of the game and procedural/administrative Manual;

(d) management procedures and style;

(e) the way the entity translates personnel management rules imposed from the outside(e.g., civil service rules) into an internally motivating environment;

(f) technical Manuals: comprehensive and didactic, and provision for facilitating thesharing of knowledge and experience among managers, professionals, and others;

(g) physical and financial capacity; and

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(h) existence of the institutional development function (IDF) within the organization chartof the entity.

30. Generally, an existing entity has an organization chart that depicts the most efficient way todeliver a given output functionally. 'Organization chart" should be understood as an organigram thatshows the existing responsibilities and functions within the entity (distribution of functions) and howthey interrelate for the entity to perform its role satisfactorily and cost effectively (internalrelationships network). Whenever an additional or modified role is assigned to this entity, thequestion must be asked whether its current organizational structure-including existing functions andthe way they interrelate-is acceptable, or if it reveals capacity gaps for delivering the new productbut at the same time continues to deliver what was expected of it. Form C is especially useful whenreviewing IC from this viewpoint because disaggregated tasks are more instructive than aggregatefunctions when determining not only the necessary functions but also their scope and imnplicationsfor personnel both quantitatively and qualitatively. Moreover, disaggregated tasks can help identifyoverlapping functions, i.e., duplications (both real or implicit) that will be considered ICGs if notunderstood as factors that will complicate, or possibly paralyze the implementation of certain tasks.

31. As a result of an internal organizational setting-both in terms of existing functions and theway they should interrelate-the corresponding rules of the game from such arrangements should bemade explicit in related Manuals, including subsequent administrative aspects. These include theadministrative procedures to be enforced in the entity, the responsibilities of the different managerialtiers in enforcing them, the kind of outputs that can be expected and reported, and the specificprocedures to follow when proposing improvements. This does not mean that the correspondingrules should necessarily be rigid; rather, if a certain flexibility is acceptable, then the limits of suchflexibility should be spelled out. Then, the rules should be given to all staff and posted in key areaswithin the facilities. Every organizational subsection or unit should be accountable for theenforcement of these rules as well as responsibility for updating. Indeed, they should feel thatsomehow they are co-authors of the current rulings and of their improvements. In turn, rules willneed to be explained to staff before they can be implemented systematically and rigorously. The lackof clear rules or the lack of internal operational manuals to define them definitively, includingenforcement procedures, are frequent ICGs that entities and decisionmakers who selected themshould identify in time, since they can become serious ICGs relative to this IC element.

32. Management procedures and style are also an important and frequent cause of low internalIC. Despite the role, organizational setting, and corresponding operational manuals being enforcedwithin an entity-and despite the staff's skills and initial good will-if managers do not behaveconsistently, the results can be disastrous. Staff motivation thus should be a high priority. In thiscase, there are no standard management procedures or behavior to prescribe here as found in themanagement science literature. What ICADS tries to do is determiine whether a particular way ofmanaging an entity can be harmful to the implementation of certain tasks, and if so, in what ways.ICADS does not pose preconditions for sufficient IC to exist. In other words, no specificmanagement style is by definition "bad" if it facilitates the most cost-effective output and a sustainedhigh level of IC in the long run. Therefore, within the ICA process, the analyst must identify what

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in the current management style and procedures can harm the implementation of specific tasks, andnot try to judge this style or those procedures as inherently 'bad" from a state-of-the-art management

science perspective. This does not mean that obsolete management styles-such as dictatorial,humiliating ways of dealing with high-level professionals, or with any level of staff, or the lack of

incentives such as those provided by participatory management are not undesirable factors generallyreducing IC. Instead it means that this should be determined from the angle of identifying difficultiesrendering impossible the implementation of certain tasks.

33. Most public entities do not have their own personnel policy. Instead, civil service policiesimpose general rules covering virtually all personnel hired with public resources. ICGs stemmingfrom civil serviqe policy is examined under the ICG codified as 'ROGCON2"3. At the entitylevel, the analyst should examine whether the way these general civil service policy rules areenforced is advantageous or not in the implemention of a proposed work program's tasks. Evenwhen there is no flexibility at all, an entity's management may be able to use norms and proceduresthat are within the scope of their authority. Management style and procedures (see para. 32), forinstance, can be a source of staff motivation or lack of it. Indeed, such elements as staffparticipation in the decisionmaking process, information flows, encouragement to suggestimprovements, efforts to create a pleasant working environment, and interest of management in theprivate or social aspects of their personnel can improve a poor institutional environment created bydeteriorating civil service policies or low pay. Again, ICGs from this viewpoint must be carefullyexamined in relation to specific tasks and not in the abstract based on textbook management theories.

34. Technical aspects of an entity's working program is indeed the key to successful achievementof its responsibility and the delivery of expected outputs. That is why they should be spelled out inManuals. Technical Manuals should normally include a thorough description of procedures in theform of tasks that are permanent, i.e., independent of particular specific work programs that result

from a new mandate, such as the implementation of a development activity (if ICADS has been used,Form C is already available). However, it is possible to include tasks resulting from additionalresponsibilities in Manuals either in the current updating process or as annexes. What the analyst

needs to. deterniine when reviewing IC is whether the entity is able to clarify to all personnel at every

level what should be done to achieve specific results and by what date. In addition, routineprocedures must be established for the task implementers to report achievements and difficulties-

along with their own recommnendations for improvements-to their respective supervisors on a

systematic basis2". The same principle as for the above IC sub-elements applies: determine to what

extent existing technical manuals are not in line with task implementation requirements, and in whatway they could complicate or make it impossible to achieve task outputs.

35. Often entities selected to implement a particular development program are not given sufficient

physical or financial resources. Decisionrnakers take the view that entities will have to stretch their

2'Se page 28.

2'See para. 85 on the use of ICADS for monitoring and evaluation.

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physical and financial capacity to the required level. However, implementation experience revealsthat entity IC is seriously eroded by lack of sufficient physical space, adequate/relevant equipment,recurrent funds, and similar constraints. Here, too, one should not prejudge what the entity can doas a matter of principle. Instead, one should determine, using Form Diii, what kind of difficultiesmay stem from the lack of physical/financial capacity, what tasks could be affected, and in whatway. Can more staff be hired? Is the existing office equipment adequate, i.e., sufficient andrelevant to the new needs? Is the recurrent budget sufficient and flexible enough to respond to newresponsibilities in general and the work program disaggregated into tasks in particular?

36. Finally, if ICA is an important key to the upgrading of IC, as warranted by new workprograms and responsibilities, it should have organizational representation within an entity. As inthe above capacity sub-elements, the existence of an institutional development function (IDF) shouldbe considered in terms of its ability to facilitate the implementation of work programs and the entity'scapacity to perform as expected. A more detailed explanation of what IDF is and how it should workis given para. 87. It should on the face of it also be considered one of the IC sub-elements withinthe Internal Organization' category, and analyzed as such since it should be a part of the entity'sorganization chart.

37. Form Diii (below) should be filled out in accordance with procedures as in theprevious IC! categories. Informants should be selected internally (m each entity to the extentpossible) for their recognized experience and seniority, their knowledge of how it is organizedscturally, and how it works. Usually selected informants are not necessarily high-level managers(who are subject to high turnover); however, the ratification of the information collected by linesupervisors is desirable and important. Again, the answers to the questions asked by the analystshould not be limited to the identification of a capacity gap, but also should help facilitate adescription of how this identified gap may imnpede task implementation. For the sake of analyticalclarity and presentation of information, the IC eight sub-elements should be dealt with in the sameorder as in para. 29, and identified ICGs entered on Form Diii in that order as well. When no ICGis identified for an IC sub-element, it is simply omitted. The informants' work can be facilitated bysuggesting that they review every task from all eight IC sub-elements in succession before proceedingto Form C. In this case, however, the description of a capacity gap clarifies what sub-element it isrelated to. In reviewing all the ICGs identified for any one task, the 'average' severity should beassessed by compiling all ratings entered from the various IC sub-elements that apply to this task.

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CountryDevelopment Activity

Institutional Capacitv Analysis and Development System

Form Diiu: ICGs from the ORG Viewpoint

Task Code Descriotion of ICGs and explanations about their nenative impacts ICG Severitv1 2 3 4 5

01 01 001 A fmction mrted to writing tems of reference for procurement of xxservices does not exist in this entity. The only experience and relatedfiunction is in construction firms. Expertise in this field is lacking.

Relationships betwee the technicl unit (how to uwe the consuking xxsrvices efficiently) and the administative one (procurement) is notwcll defined. There has becn constant conflicts between then. Thisis likely to delay the preparation of the corresponding TORs.

Absence of a Manual eablishing clear rules of the game makes it xxdiflicult to elaborate TORs in accordamne with diffcrent functionalviewpoints. This may result in disagreanent and further delays.

Loose rules for executing management decisions: malpractice may xxresult in the definition of specifications for the firm to be hired.

01 01 002 Adminisative rules make it difficuk to obtain spending authorization xxfor advcrtiemnts.

0101 O1003 No special unit for this or relevant procedures. This usually results xxinto procurement malpratice and considerable delays if the Bankdocs not approve actual procedures.

Management procedures make it difficult to implemcnt a fair process. xxRisk of manipulation exists. Threatens task implemcntation.

The non-existencc of IDF in this entity makes it impossible to xxformulate timely waniings to management. As a result, thisparticular task may be impossible to execute in timne.

01 01 004 Same difficulty as above to reach consensus on a fair process and xxaward decision. Delays will certainly result from this.

"See footnote 18.

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ORG-Related ICGs Selected Tvvologv3'

ORG Subcatieorv Subcateeorv Name Elements of Canacitv Code

ORGDFS Internal Organization: Comprehensivenessof existing ORGDFS1Distribution of Functions functions as compared with

requirements.

Relevanceofexisting functions ORGDFS2as compared withrequimes.

Dupliaion/overiapofexisting ORGDFS3functions when applied torequirements.

ORGIRF Internal Organzation: Internal Intrn rlationships cnsumd ORGIRF1Relationships Flow for development activity

implemenation as requird.

Intenl relationships based on ORGIRF2clear agreements (formal ornot).

ORGRGM Intna lOrganization: Rules of Administrative and ORGRGM1the Game and Manual organizational rules of the

games well defined as requiredand included in an ad kEmanual.

ORGMPS Internal Organization: Management procedures madc ORGMPSIManagement Procedurs and explicit to all implementingStyle staff and creating a conducive

institutional enviroment.

Management style conducive ORGMPS2to obtaining maximumefficiency from staff skills.

ORGCSR Internal Organization: Liberal and stimulating way of ORGCSRIInerpretation of Civil Service applying civil service rules.Rules

Internal personnel managemcnt ORGCSR2using attractive procedures andincentives adequate to rtainand motivate skilled staff

ORGTEM Internal Organization: Existence of technical ORGTEMITechnical Manuals procedures and systems well

defined in didactic manuals.

Internal harmony and ORGTEM2agreement on technicalmanual's content andprocedures.

tSee footnote 19.

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ORGPFC Internal Organization: Physical Space available corresponds to ORGPFC1and Financial Capacity requirements for new projects.

Equipment in line with ORGPFC2implementation requirements.

Recurrent money adequate for ORGPFC3implementation of new tasks.

ORGIMF Internal Organization: Existenoe of an internal IF. ORGIDFIInstitutional DevelopmentFunction

Absence of IDF makes it ORGIDF2difficult to implment theparticular work program atsak.

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Step Eight: Identification of Institutional Capacitv Gaps from the "Personnel Policy and RewardSystem' (PPR) Viewpoint.

38. Most countries have civil service regulations that may not be comprehensive. Also, civilservice careers are usually not competitive with the private sector; in fact, personnel policiessometimes seem id bhg and result in de fa informal civil services, and not necessarilycomprehensive systems that are well defined and well advertised. What is to be considered here iswhether civil service systems, formal or not, are going to affect negatively the implementation ofcertain development activities. In ICADS, one should refrain from prejudging: indeed, it is futileto decide in the abstract that a civil service system is inadequate, and that it includes far more civilservants than would be sustainable or required. Any perceived capacity gap should be referred toa specific development objective or task. The best position from which to gauge whether overall thecivil service is adequate in size or not is when the role of the State, globally or sectorally, ismodified or legitimated. During subsequent assessment, identification of any aspects of the role ofthe State that need modification (both qualitatively or quantitatively) must go along with anassessment of subsequent effects -on current civil service policy. This, in turn, should be a seriousconcern at the more disaggregated levels of development activities, especially at the project level.The simple fact that public salaries are too low is not a capacity gap in itself. It is a gap only if ithas a bearing on project implementation; for instance, low salaries may result in an entity not to beable to retain key professional staff for more than a few weeks, making it difficult to implementcomplex work programs for lack of continuity. Low salaries may not affect an entity's workprogram at all: for instance, when the public sector does not offer.any job opportunity, or whenother incentives are present, such as the prestige of working for a well known government bureau.

39. Personnel policy ICGs typically include low salaries, especially inadequate compensationpackages, which can seriouslyjeopardize the implementation of development activities for which ICAis being carried out. Indeed, civil services in most developing countries have not kept pace withstandard compensation packages in the private sector. In a few cases, they have also lost the prestigethey once had. In most cases, civil servants are actively looking for better paying jobs, thusremaining in civil service jobs for a much shorter duration. Compounded with political patronagethat makes it almost a rule to change a large proportion of the civil servants on the occasion ofpolitical changes, even in the absence of ideological changes, this has resulted in an overburdenedcivil service, and a decreasing capacity to pay decent salaries that has resulted in the bestprofessionals (and other levels of staff) leaving the public sector, and a consequent loss of credibilityamong the general public. All of this can have a bearing on the IC required for the implementationof development programs. But it is not a foregone conclusion: it must be carefully identified anddescribed in Form Div. Here, perhaps more than in the other aspects, many tasks face a similarICG. The informant should still read all tasks; however, instead of stopping after each one, heshould assess what tasks would apply to every ICG he identifies. Indeed, the same problem, (e.g.low salary) can have no particular negative effect on certain tasks and conversely completely preventothers from being executed. This should be carefully and completely explained and accurately rated,as shown in the example below.

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CountryDevelopment Activity

Institutional Cavacitv Analysis and Development System

Form Div: ICGs from the PPR Viewpoint

Task Code Description of ICGs and Explanation about their neeative imvacts ICG Severity"1 2 3 4 5

01 01 001 This is a task that requires the work of a professional, who is xxto 01 006 currently looking for a job elsewhere for lack of a personnel

policy that would provide social security. For the last three years,this position has had eleven diffcrent staff members and for abouteight months had no staff at all. It is unlikely that this time thestaff in charge (who has been there for four months) would havethe time to implement the task before rcsigning.

0101 007 xx

03 02 017 Staff in charge recently left for salary reasons. Substitutes xxto 02 018 difficult to find because computer specialists are in high demandandO2 020 by the private setor- we are unablc to compete in terms of either

career or salaries.

03 02 019 xx

etc.. .IS.

V7See footnote 18.

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PPR-Relted ICGs Selected Tvpology"

PPR Subcategorv Subeateeorv Name Elements of Caoacitv Code

Personnel Policy and Reward Career exists and helps secure PPRCSCIPPRCSC System: Civil Service Career and motivate personnel

required.

Salary levels and grids PPRCSC2commnensurate with level ofqualifications and with privatesector.

PPRCOM Peonnel Policy and Rcward Include social incentives. PPRCOM1System: CompensationPackages

Include aecident/health PPRCOM2insuranee.

Includes provisions to leave PPRCOM3and reenter the service.

2See footnote 19.

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Step Nine: ICGs from the "Skill" (SKL) Viewpoint

40. Reviewing supervision and monitoring experience of World Bank projects over a period offive years across sectors and across regions of the world, it is fair to state that about half of theimplementation staff (at all levels) and beneficiaries lack basic information, knowledge, and skillsto understand the tasks assigned to them, or to know how to implement them. We have seen abovethat even though they would be competent enough to implement these tasks efficiently, the generallyhostile institutional environment in which these tasks are implemented would prevent them frombeing effectively carried out. However, the two major sources of development failures are closelylinked. Indeed, the lack of management/decisionmaker and professional skills is one of the primarycauses of the weak institutional environment within which most development activities areimplemented. This is because, on the one hand, the responsible parties generally fail to analyze ICrelated to their stated objectives, and, on the other hand, define objectives based on politicalconsiderations rather than legitimate needs and technical feasibility. Although this has been clearlyacknowledged in the development literature, it is still a pervasive problem that plagues developmentactivities in general. Although ICADS helps make it explicit when analyzing ICGs from theROGGOV viewpoint, it also specifically helps analyze in a systematic manner the skill gaps that canaffect the implementation of development activities. Skill gap analysis (SGA) is a key to determiningto what extent institutional skills' are commensurate in quantity and quality with implementationrequirements.

How to Perform SGA

41. Form Dv provides some examples that can be used to gain familiarity with the system. Theformat has been designed in a didactic way, using descriptive column headings and explanatoryfootnotes that facilitate gathering the corresponding information. One should start by identifying thecategories of personnel and beneficiaries/victims that will be affected by the particular developmentactivity at stake. Then informants are selected: they should generally be admninistrative heads forlower staff levels and the individuals themselves for higher level professionals and managers.Therefore, groups of informants should be selected in every entity involved (those in theimplementing institutional universe described in the IIRMap). For beneficiaries/victims ofdevelopment activities, it is desirable to select informants among representatives of either their formalor non-formal organizations, and from institutional officials who know them well because of thenature of their work (e.g., agriculture, social, or health extension services). The interview itselfmust be highly didactic to obtain full cooperation and trust for validating the information received.One should explain first the purpose of the interview. Indeed, the project for which ICA is carriedout will bring new responsibilities and new tasks to the entity, as well as additional resources;therefore, it may be necessary to upgrade the skills currently available in the entity. The purpose

2'Indeed, in ICADS, skill gap analysis should not be carried out from the individuals' viewpoint but from the institutionalone. When a staff member of an entity does not have the skills to implement a given task, the entity's manager may assign thistask to a more skillcd person. He may also train the person who does not have all the skills required but holds a position wherethis task belongs, and so on. Therefore, while identifying and measuring skill gaps, one should have in mind the entire entityrather than the individual staff member.

44-

of SGA is to determine the kind of support required in terms of more information, training, anddocumentation. SGA should help identify needs through a comparison between the current skillsavailable and the ones required to implement the particular project. As a result, it is expected thata really cost-effective 'skill upgrading program"-0 will be designed and financed through theproject, thus contributing to creating a conducive institutional environment, where everyone willbecome better able to contribute efficiently to the expected overall success. Further explanatoryinformation will be added during the interview process, as defined below.

42. After this initial presentation, the informant is given a copy of Forms A, B, C and theIRMap, as for any other IC element. However, during the interview, he/she should be referred toForm C, the list of tasks. The informant will have tO stop after each item and answer tie followingquestion:

How many staff are needed in every category to implement this task, starting with the highestpossible level?31

After a response is obtained as to the number of staff for each category, the analyst will immediatelyask a second question:

How many of them are suited for this task, meaning able to implement the task efficientlyby themselves by the due date?

If he (she) answers one (or more), the severity column "5" is checked. The analyst does not needany further information. If there are two (or more) of these managers entered in the 'Number ofStaff per Category" column, and that column has been rated "5," the informant should then rate thesecond manager who has the same task to perform. This time the rating will necessarily be less than'S.' For any such rating, the analyst should ask the informant the following question:

What is missing from the task implementer's information, knowledge, and/or know-how thatwoulid enable him/her to implement successfully this task?

The corresponding information is entered in the appropriate column describing the type of skill gapthe staff member possesses for the execution of this particular task.

43. At this point, further information is required to help the interlocutor feel comfortable. Firstof all, the temptation is great to give managers (sometimes, self-rated) a "5." When a "5" is entered

'SNot 'training' because solutions to some skill gaps may be diffemrnt, such as the replacement of a staff mcmber, assigninga task to someone else, modifying the task itself, and so on. Again, the SGA viewpoint is the entity, not the individual.

"This is when the tasks have not been disaggregated to the levl of single individuals. Otherwise, the question to ask islimited to the category of the staff menber in charge. When individual Form Cs are available, Form Dv can be prepared forevery individual as well. in which case the 'category-of-aff' columns are to be delcted from the Form on page 46. Theindividual's category can be cntered in parentheses after his (her) namc.

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for the first time (this often happens the first time an informant is asked to rate a manager or whenmanagers rate themselves!), the analyst should explain to him/her that such a rating entails threecritical implications: (a) by self-rating or rating any other staff member "5,* the interlocutor is tellinghis line supervisor (or the line supervisor of the person rated "5") that he will perform "perfectly'and will deliver the task output as described on Form C and on time, which is quite a commitmentand carries with it great responsibility; (b) that being rated at the highest possible level, he/she canbe used as a resource person to help or even coach others performing similar tasks but with lessrelated skills to implement them at the required level of efficiency; and (c) that he/she would beexcluded, for example, from any training activity, course, seminar, study trip in the country orabroad. Experience shows that after receiving this explanation, informants generally give a lowerrating. In such cases, they must identify explicitly what is missing in the rated person's information,knowledge, and practical skills before they can implement the task satisfactorily. This part of theexercise has proven vital to increasing the awareness of decision-makers about the need to assesscarefully the skills of task implementers, and to provide them with exactly what is required toincrease efficiency and minimize training costs, for the entity, for example. This also helps preparemore relevant training programs when training has been deemed the best possible solution to bridgeidentified institutional skill gaps.

44. Form Dv should help interlocutors, decisionmakers, and managers in particular, to understandthey cannot ignore the skills of the staff members to whom they assign important tasks, which ofteninvolve critical responsibility for handling substantial financial resources. Furthermore, they shouldalso understand better that when skill gaps are identified against task requirements, the gaps mustbe described in such a way that it become easy for training activity planners or for PersonnelDepartment officers in charge of hiring new staff to specify exactly the professional profile that isrequired. Therefore, the overall purpose of SGA is to assess how far the entity skill mix departsfrom what is actually required to implement a given cluster of tasks (represented by "5"). This willhelp make it easier to plan efficiently so that an entity can get to "5, that is to bridge all identifiedskill gaps. To bring this about, it is important that the quality of the information entered in the threeskill columns be as precise and relevant as possible. Instead of describing skill gaps, interlocutorsgenerally state that this particular staff member "needs training." Indeed, these columns are notthere to offer a solution ("training' can be a solution), but rather to identify problems, i.e., a pieceof information and/or of knowledge, or a particular practical skill that is missing for the person tobe able to implement a task satisfactorily. The analyst must exercise care to obtain the rightinformation, which ideally can almost be expressed in terms of a "training curriculum" (which iscurrently missing in the implementers' profile), and avoid anything that would suggest a 'solution"at this stage of the analysis.

Develoonment ActivityInstitutional Capacity Analyis and Development Systm

Fonn Dv: Skill-Related ICOG

Task Number and Category of Staff a 2 Description of Skill Gaps b Skill Gap Severity cCode

A B C D E - a Informnation d Knowledge e Know How f 1 2 3 4 5

0101001 1 x

01 01 001 1 New staff member. Does not know much xDoes not know about pmourementanything about the procedures toproject, supervise task.

01 01 001 2 x

01 01 001 I Not good enough in terms of xdrafting TOR documents.

01 01002 1x

Of0101003 1x

01 01 004 1 Not acquainted with Not keen on carrying out xin-house public public relations.relations: lacks basicinfo on intemal

A constituencies.

01 01 005 e Loe I I

"Letters refer to explanatory notes on next page.

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Notes for Form Dv

a Before starting the interview, the analyst should enter in a footnote to these columns the actualcategories of staff, beneficiaries, and victims that are relevant to the particular institutionaluniverse for which a SGA is being carried out. In this example, "A" represents all kinds ofmanagers, including staff members who supervise others at any level. "B" is for professionalswithout management responsibility. "C" is for technical people. 'D" is for non-professional ortechnical staff members: administration, clerical. 'E' is for beneficiaries' heads of family and"F" for beneficiaries' family members. Finally, "G' can be for project outputs' victims (e.g.,the case of some structural adjustment operations or when the reduction of some activities willreduce the income of certain segments of the population). Any number of categories can beentered as long as they are relevant to the particular implementing institutional universe, and aslong as it is relevant to disaggregate them to that degree in terms of the type of skill gapsidentified.

b Three categories of skill gaps can be used. Obviously this is flexible and an analyst may decideto change these categories, add others, or focus on only one or two. However, these threecategories are most commonly found in development work:

c As for the identification of other capacity gaps, the analyst should guide informants to determinehow serious an identified skill gap is for implementing a task adequately. The question to askis simply:

How serious is the identified skill gap for the task implementer in implementing the tasksuccessfully?"

However, the rating here is slightly different than in Forms i to iv.

"1" Since SGA is carried out from the institutional viewpoint and not the individualone, when a particular task implementer is absent (the task belongs to a currentlyvacant position), the rating to use is "1." This means that the entity has anabsolute lack of the corresponding skills to implement this task. In such a case,the three columns in the middle (description of skill gaps) must include all theinformation, knowledge, and know-how that the person in charge should have toimplement the particular task. This will explicitly warn decisionrakers and/ormanagers about all missing skills in the entity, and also it will help the personneladministration in charge of hiring someone for this position: he/she will alreadybe alerted about the skills the person hired needs, skills that must be compoundedwith others for other tasks, since the person hired will probably have toimplement many other tasks.

'3Another way of putting it: 'what is needed to go to 'S.' since '5' represent all the necessary skills for a given task.

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*2" This is the rating to use to indicate that a task implementer, who holds thecurrent position where the task belongs, is unable to execute a task because theprofessional specialty required is not in the incumbent's academic/trainingbackground or professional experience. In this case, the description of themissing skills should also be as complete as possible to help the manager who isgoing to reassign the task make sure the newly designated task implementer hasthe necessary skills. At a minimum, the implementer should be able to assess themissing skills of this new task implementer and decide whether training may helpor if a different person should be chosen.

3" Tbis is a mid-term rating to indicate that the task implementer exhibits skill gapsthat are imporant and may hamper substantially the quality of taskimplementation and of is final output. In general, for development activities thatcannot be delayed. iz is not desirable to have too many 3"-rated taskimplementers. The number and scope of skill gaps for those rated '3' normallyrequires several weeks if not months of training. Can the tasks wait all that long?

-4U Real skdll gaps have been identified but they are not many. And their impact ontask implementation is going to be mild. Task output will be achieved but notat the same level of expected efficiency, which is implied in the task outputcolumn of Form C. But a few hours of training, or of informative sessions, orany other short duration training activities would help bridge the identified gap.

W5u No gap whatsoever has been identified for a task implementer of designatedtasks. It is expected that such implementers will deliver exactly the task outputdescribed on Form C and he/she will deliver them on time?'.

d Information The entire universe of people involved in development activities must have acertain amount of information to be able to either make things happen as statedin development objectives, or to benefit from them effectively. The minimuminformation to be delivered at the earliest stage possible concerns the nature ofthe proposed development activity and objectives, its importance for the countryand/or the region in general, and especially the people involved. This isimportant when staff have to give up some tasks temporarily or permanently,such as in some aspects of policy-based lending. Implementing entities'managers must know also what their role is and how it relates to other entities.They should be told how they are to become institutionally or personallyaccountable for results and efficiency. In turn, all other staff members shouldbe well aware of their respective roles, what is expected of them, and how theirefforts will be evaluated and rewarded.

34Additional information about the mcaning and implcations of 5' ratings is prvided in pam. 43.

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e Knowledge Implementing Managers and staff members as well as intended beneficiariesshould be competent enough to implement their respective tasks efficiently. Anarchitect should not be given a task that relates to health maintenance or amedical doctor a task related to road maintenance3. Beneficiaries must agreewith what they should do to take advantage of the intended project benefits. Forinstance, in the example mentioned above about horned cattle not acceptable totargeted beneficiaries, it does not make sense to try to teach them how to raisethis kind of cattle if they are going to kill them for religious reasons as soon as

they see them. More commonly, this topic refers to the training or academic

background of a task implementer or beneficiary, and whether this is sufficient

for satisfactory task implementation.

f Know-How This refers to more practical skills of all kinds that are relevant to particulartasks. While knowledge refers to the understanding (intellectual specialty only)and ability to know what the response to any situation should be, the k2ow-howcategory refers to how to carry out in practice such a response. One may very

well understand and even generate the content of a given report and not have theability to write it down correctly, or report it verbally in a convincing way. 'Toinow' is quite different from conveying knowledge. In the case of beneficiaries'

skills in, say, an agriculture extension project, this may simply mean: does a

farmer know how to use a tractor efficiently? Distinct from whether he wantsto use it or understands why it is more effective than non-mechanical tools.

45. Observations. Many inexperienced analysts believe that informants are not fair in indentifyingskill gaps, or competent enough to identify skill gaps in a professional and objective way. Indeed, thisis often the case. However, the relevance, completeness, and credibility of the information obtained canbe enhanced by having it reviewed as often and systematically as necessary by the interlocutor's line

supervisor and by the rated task implementers themselves36. The basic management principle should

be made explicit at the outset: those who have the responsibility to assign tasks to others should knowwhat skills are required of them. Nevertheless, when this is not the case, i.e., when managers do not

know much about their staff's skills, they will need to identify and measure them in meetings with them

to survey the work program at stake, or through similar means. This will be easier and more effectivewhen the tasks have been disaggregated at the level of individual task implementers. Indeed, such apractice is extremely helpful and effective in enhancing the entity's IC; it is not uncommon that managers

are unconcerned about their task implementers' skills until they receive bad products. SGA should helpmanagers become aware of such problems beforehand and address them efficiently and in time.Therefore, the SGA exercise will also prove helpful to indirectly enhance their own management skills.

39rhis may seem obvious. However, when political considcrations fill the entire 'agenda", anything is possible and indeed

happens frequently!

3'This should always be the case when analyzing managerial or higher-level professional skill gaps.

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SlL-Related ICOs Selected Tvvoloevy'

SKL SubcateMorv Subeaterorv Name Elements of Capacitv Code

Skill: Information Information on the politics of SKLINFISKLINF the project priority, national

inportance.

Information on the project SKLINF2itself: objctdves, resources,institutional responsibilities.

Information on specific aspects SKLINF3of task implementation.

SKLKNO Skill: Knowledge Every piece of knowledge SKLKNO1from academic background.

Samc but out of professiona SKLKNO2

SKLKHW Skill: Know-How Practcal skills necesry to SKLKHW1nmplement cetain tasks.

Intellectual skills such as SKLKHW2writing, preparing reports andthe ability to speak in public.

Skills linked to personaity: SKLKHW3public relations, diplomacy,etc.

DSCC footnote 19.

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Step Ten: Consolidation of Nonskill-Related ICGs.

46. Forms Di to Div are likely to contain ICGs that occur many times. This is because theanalysis has been carried out using disaggregated tasks many of which are affected by the same ICG.While carrying out the following steps, and to facilitate using the information obtained, all identifiedICGs should be summarized by category to avoid repetition, including those pertaining to the designand implementation of an ID strategy and action plan. The gaps should now be well organized alongwith the tasks they are likely to affect if not bridged in time. This "consolidation' exercise will beuseful,when reporting to decisiomnakers about the results of ICA by helping them determine howto respond (see Step Twelve). An example of a nonskill-related consolidation form is given on thenext page. Important informtion on this form includes the ICGs themselves, as well as the list oftasks each ICG can affect plus an "average severity" for every ICG. The average severity is thearithmetic average of all severity ratings entered on Forms Di to Div for the same ICG. The right-hand column of severity ratings, can be shaded to visualize the actual 'capacity profile" from thefour nonskill-related ICG perspective that together represent the institutional enviromnent in whichthe work program will be implemented as described by the tasks. The required capacity profile, thatis '5, is symbolically represented by the line to the right of every ICG rating in this column, -asshown below. From now on, the analyst can explain that the wider the gap, the more serious thecapacity gap (illustrated by the shaded area), i.e., the difference between the "5" vertical line andthe ICG line to the left of this shaded area. Therefore, this should be addressed carefully if thedevelopment objectives are confirmed, and must be achieved completely. This is further discussedin Step Twelve.

SA Eleven: Consolidation of Skill-Gap-Related ICGs.

47. This step is the same as for the skill-gap-related ICGs. Indeed, many staff have the sameskill gaps no matter how different their tasks are. For instance, staff may not be good at preparingor presenting a report regardless of the subject. Others have a skill gap that is going to affect manyof their tasks. For instance, someone who finds it difficult to speak in public has many opportunitiesto do so in the work program while implementing the project. The format of Form Eii, below, isslightly different from Ei to reflect differences already observed between Forms Di to Div and FormDv. All other comments and observations made in the previous paragraph also apply to Form Eii.

48. Previous consolidation forms include key information that comprises the basis for thedesign, preparation, and implementation of any related ID strategy and action program. This is whyit may be useful to further consolidate in a manner suitable for experienced senior IC analysts andpolicy-makers. This is particularly useful at the macroeconomic and sectoral levels, but probablyless so in investment operations--although for the latter it has proven effective as a device forcarrying out the dialog between the analyst and decisionmakers (see paras. 51-52). Indeed, it makesthem more aware of the reality of the available IC compared to development ambitions. Finally, ithas also proven useful in redesigning projects and defining ID strategies in complex projects.

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CountryDevelopment Activity

Institutional Capacity Analysis and Development System

Form Ei: Consolidation of Non-Skill Related ICGs

ICG ICG Description Affected Tasks (Codes) ICG Average SeverityCode

1 2 3 4 5

DiOl Absence of a procurement legislation 01 01 001; 02 01 001; xx

03 01 001; 04 01 001 A:.

DiO2 LAck of banspant procedues 01 01 003; 02 01 003; xx______ ___ __________ __________ 03 01003; 04 01003 .

DiO3 Polt inaluence too strong in 01 01 004; 02 01 004; xx w prcurement and bidding processes 05 01 004

DiOI No relationships beweeintmening 01 01 001; 05 01 001 xxministries _ _ _ _ _ _ _ _ _ _ _ _

DiiO2 Administive units wihout relevant 01 01 003; 03 01 003 xx *

_manmadates _

DiiG3 Absence of regional offie where 01 01 007; 05 01 007 xxmapnsiibteshave been assigne ________.:.W~ Q*

DaiOI No relevant function in the etity 01 01 001; 05 01 001; xx07 01001 x

DiiiO3 Internal reationships beweo 01 01001 xxadministrative and relevant technical units

____ nomt defined

Diii3 Absence of relevat administrative manuals 01 01 001; 05 01 001 xx

Dii Loose rule for management decision- 0101 001 xx_______ making procese _x_ __ _ __ _ _

DiiiO5 Dbsolete management procedures 01 01 003; 02 01 0030 __

01 003;04 01 003; 05 01003

DiiiO6 No special unit for relevant procedures 01 01 002; 04 01 002 xs g:i

DivOl Fast staff turnover due to low salaries 01 01 001 to 01 01 006 xxand 0201001too02077025

DivO2 'Vacant positions 03 02 017 to 03 02 018; xx03 02 020

etc.

CountryDevelopment Activity

Institutional Caagcity Analysis and Develoyment System

Form Ei: Skill-Related IC9s

ICG Description of Skill Gaps Affected Categories of Staff/Beneficiaries Affected Tasks ICO Average SeverityCode

A B C D e F G 1 2 3 4 5

DvOl Information about the project 1 5 8 27 65 250 224 01 01 001; 02 01 -i.environment: political 003; 04 01 001 toimportance, national goal, etc. 0107 095 : | : : t

|v| 2 Infomation about the project 1 2 5 20 60 250 224 same as above xiitself, its relative importance,interinstitutional organization,etc.

DvO3 In-house public relation 2 01 01 004; 02 01 xxsystem 004;03 01 004

DvO4 Procurement procedures 3 8 01 01 001; 02 01 - |001;03 01 001;04 01 001

DvOS How to draft TORs for 1 2 same tasks as xxacquiring consulting services above

DvO6 Public Relations 1 3 14 01 01 004; 12 06 _ 0011to 007; 04 02

____004 to 012

DvO7 Procurement skills - 2 .= = Same as Dv04 _x . M.

=~~~~~~ = - =- =- - = -=- -=

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ICADS Selected ICG Tvoloov_

IcG Sd_uhaowy. ICG ICG ICG Sasegoty ICG ICG| CaP | N_ber Avaeg Code Nub Aveage

R ~~~~~~~~~~~~~~~~~RaigW ~ ~~I .~u

lie M nroludlird ef ORGIRF2 DiiiO2 3

ORGRGMI DiOiW3 3

ROGGOVI 5 ORGMPSI D;iS 2

RWOOOV2 DiO3 2 OROMPS2 Di0S 2

LOGGOV3 3 ORGCSRI S

ROOGOV4 I ORGCSR2 S

ROGGOVs 4 ORGTEWI S

ROGGOV6 I ORGTE_M S

ROGCONI _ ORGPFCI S

ROGCON2 S ORGP2 S

ROGCON3 3 ORGPFC3 S

-am I ro dd%ot ladex (ICI):2914 ORGDPI I

Den_ mt- e- rud ORGIDF2 I

ROGLEal S PPRCSCI DivOl 2

ROGLEG2 S P?RCSC2 DivOl 2

ROGLEG3 S PPRCOMI 2

ROGLEG4 DiOl 3 PtRCOM2 2

ROGREGI DiO2 3 P?RCOM3 3

ROGREG2 DiO2 3 SUNFI DvOl 2

ROGCUIU S SKlUN2 DvO2 2

'tRRESI DiiOl 3 SflZNFS Dv02t03 2

IRRRES2 DMi02/03 2 SJcKNOI DvO4 2

IRRRES3 Dii2 3 SKLKN02 DvO5 4

IRRPARI 5 SKIXHWI DvOS 4

IRRPAR2 5 SIKIHW2 DvO7 I

ORGDFSI DiiiOI106 2 SKLKHW3 DvO6 3

ORGDFS2 Diii 01 2 loaaioaa Capacity Idcx (IC12): 1351210

ORGDFS3 DiiiO2 3

ORGIRFI Di. 3

See paga 28.32,38,42 and 50 for meaning of codes.

"See Forms E and Eii.

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49. This consolidation form can be used as a checklist for analysts carefiul enough to ensure thatall of the most commnon elements of capacity generally identified in development activities, have beenreviewed against work programs disaggregated into tasks. Subcategories not applying must besirnply rated '5." The different subcategories in this consolidation form/checklist, have been dividedinto two categories: the first includes nine elements that describe the macro-institutional evironmentrelevant to the governance concept. This does not mean that the governance background should besystematically reviewed for all development activities, nor does it mean that if the rating is low(anything below 45 which is the capacity level required), the corresponding development activity willnot achieve the intended objectives. It is certainily possible to ignore those conditions of governancewhen the development activity is limited in scope and when sustainability is not a key factor.Otherwise it can be a useful tool to warn implementers of potential dangers down the road. But theinstitutional conduciveness index (ICII) is a necessary tool for higher-level decisiomnakers in boththe government and the international or bilateral financial sources concerned, whichever isrelevant'. Under a minimum ICII, dropping the project altogether should be seriously consideredunless the analyst can see that measures are already being taken to improve the situation during theimplementation of the development activity at stake-even though such a process may need moreyears to come to fruition than the development activity proposed. In other words, what is importantis the real trend rather than the static index. Conversely, the second index, the institutional capacityindex (IC12), has a more direct bearing on development activity implementation, and therefore shouldalso be seriously taken into account. In fact, this is a critical recommendation that is formulatedhere: an ID Component should be prepared and integrated into any development activity of any kindif this index is less than 210. Obviously, the content of this component will be as substantial as thecapacity gaps are severe. Index IC12 will be useful as an indicator of how substantial this componentshould be, i.e., how many and how various ID inputs should be included to address the capacitystrengthening needs.41 The detailed ICGs described in Forms Ei and Eii should be used as thebackground for-the design of the corresponding ID component. This added sophistication of ICADSmay be used by certain analysts who will find it helpful in accordance with their purpose, but it may

be skipped by others.

'in the environment componcnt of an agriculture development project, it was decided to imnprove the relevant sectorallegislation to help reduce soil erosion while modernizing the production technology. However, the analysis of governance issuesrevealed that the authorities in charge of enforcing what would become the new legislation, were so corrupt that this newlegislation would only become for them an occasion to get bribe money from the farmers, thus allowing them to continuedeteriorating the soil on which they would work because this would result in more immediate gains. ICI1 was assessed to be15 only in this case: this should have been a critical warning to the international donors that helped finance this operation.Ultimately, the recommended legislative measure ended up creating one more corruption opportunity. In other words, it doesnot mean much to improve the law in a country where the rule of law does not prevail.

4"1 f an airline should have a 45 capacity to reach Paris from Washington safely and timely, it may be disastrous if thiscapacity is in fact, only 42. Thc plane may have to crash just before reaching Paris! This means that the level of capacityrequired to reach intended objectives is a sine qua non condition of effectively achieving these objectives. If this capacity levelis not possible to achieve, then the decisionrnaker should rather lower his(her) development ambition accordingly. In the twoexamples given here for ICII and IC12, maximum 45 and 210 do not represent the "perfection* but simply the level of capacityrequired to efficiently achieve intended outputs and to sustain them thereafter.

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Conclusion: Pause after Part Two

50. After proceeding through the first nine ICADS steps, the analyst has become familiar withthe development objectives at stake, the institutional universe in charge of achieving them, and thepossible lack of capacity for achieving the objectives. However, he/she also becomes acquaintedwith one of the most attractive feature of ICADS: it is a capacity analysis tool that helps enhance ICduring the course of the analysis. (This will be commented on further in Part Three.) At this point,the analyst should pause and consider the information at hand. He/she has helped decisionmakersbetter define what they want to achieve from the development activity they are trying to design. Asa result, by revisiting their objectives, resources allocated, and even work programs, all haveprogressively been improved as has the formulation of all important aspects of their developmentstrategy. Is is noteworthy that decisionnakers with a better defined program will implicitly possessmore instiutional capacity than those that really do not know how to express their objectives withprecision, or are not sure about the resources necessary, or even worse, when they do not assignwell the corresponding institutional responsibilities among future implementers. Furthermore,through ICA itself, carried out against tasks, decisionmakers will further refine their understandingof what they really want, and can compare it with what they actually can do given the current IC.Quite often, decisionmakers confronted with identified ICGs in this disaggregated manner, decideon the spot to take remedial action, and their IC is thus increased accordingly. In addition, for thoseaspects that cannot be corrected so easily, decisionmakers are prepared to listen carefully to the IDspecialist, when possible mitigating alternatives are recommended, thus facilitating the design of anID strategy and related inputs. At this stage, it is important to discuss the findings of ICA with thedecisionmakers, hopefully the same ones who were interviewed, in person or otherwise, when fillingout Form A. This process is discussed below in Part Three.

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Part Three

Translating Identified ICGs into an ID Strategv and a PSIDC

51. At this point, the analyst has made explicit the decisionmakers' development amnbition andwhy various aspects cannot be realistically fulfilled and in a cost-efficient manner. He/she needs toreport how far IC is from that required to achieve the stated objectives. This discussion between thedecisionmakers and the analyst is critical. Its main purpose is to determine how much more IC canbe generated during the life of the project (or any development activity) to make its objectivesfeasible and cost effective. Once this is done, it becomes possible to: (a) redesign developmentobjectives and subsequently many aspects of the project configuration; and (b) design PSIDC toinclude an ID strategy and the corresponding inputs to facilitate capacity enhancement as needed andagreed during this review. When reviewing the consolidated lists of ICGs on Forms Ei and Eii, andlistening to the analyst's explanations and comments, the decisionmakers must deternine: (a) whichof the capacity gaps they want to tackle directly and rapidly; (b) which they do not want to addressfor the time being, e.g., because of their political nature or the inappropriateness of thecircumstances; and (c) which ones they agree to tackle as part of the project implementation, withthe corresponding inputs included in the project design itself. However, they should be warned thatnot all capacity gaps can be bridged in the short or even medium term. For instance, it may befoolhardy to try to bridge a legislation-related ICG if the country is not governed by the rule of law!Three main ID inputs are available to decisionmakers who genuinely want to increase their IC to thelevel required by the achievement of their development ambition: government decisions, specialistassistance, and training. In addition, more measures, not necessarily of a direct ID nature, can beadded wherever they will increase the efficiency of the basic measures; for example, the financingof increases and/or modifications to the financial/physical capacity, including facilities to be rentedor built, equipment and furniture, and related recurrent costs.

52. Once ICA has been carried out and resulted in yielded a consolidated list of ICGs,decisionmakers are probably ready to commit themselves to take institutional strengthening measuresin accordance with a schedule that must then be agreed. They also must agree to include thecorresponding measures in the list of conditions attached to the financing agreement, since this maygive them more political and operational strength. This may be very effective in producing the keysteps necessary to bridge the identified ICGs. Financing is actually made available for specificactivities, since it has been recognized that without these measures, the corresponding activities forwhich this financing would be used are likely to be useless or inefficient. However, even when thedecisionmakers are ready to take action, they may need specialist assistance to produce thoroughreviews and formulate technical and practical recommendations to carry out the required reforms.Therefore, "government decisions' can be directly made before the process of negotiating the

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corresponding financing or this will become the result of further studies and specialist effortsincluded in initial project activities.

53. Governance-related Issues. The analyst should decide on an ad hoc basis whether to informnthe decisionmakers about governance-related issues. In all cases, though, the correspondingindentified ICGs may not be tackled on the occasion of development activities only, since they areof a much longer-term and probably more comprehensive nature. However, it may be important fordecisionmakers to realize that because of governance issues, their development ambitions may requirea scaled-down design, and that some aspects cannot be successful at all-or at least not in the wayexpressed in this particular case. As stated before, governance issues can also be a warning to thefinancial sources to refrain from financing the particular operation or to proceed with caution andextra conditionality. Some political environments are such that the need for not proceeding is clearand beyond, question. These situations include states of war or social turmoil. But othereventualities, less clearcut, would also require simnilar extreme caution: for instance, in a countrywhere the distribution of income is one of the worst in the world, and has consistently deterioratedover several decades, and where nothing in the current development policy portends a future reversalof this trend; when income tax legislation includes fiscal incentives to benefit only the richest 5%,with some taxpayers deducting between 80% and 90% of their taxable incomes; when only 5.5% ofthe population file a tax return, and less than half of these actually pay taxes; when 10% of thepopulation owns 50% of the national wealth, and the poorest 10% have only a 0.8% share of it; andsimilar country profiles. Then, financing development activities in such a macro-institutionalenvironment is, to say- the least, risky if not a 'blind-eye' approach, with predictable macro-mismanagemnent consequences. The only way to design and implement successful developmentactivities in such countries-if the intention is to include equity and benefits to the poorest-is toprudently limnit oneself to selected activities, not affected by this kind of adverse institutionalenvironment, which will allow the above situation to exist and be sustained. The ICII and IC12indexes can be useful in undertaking the institutional risk analysis of any development activity frommacroeconomic development plans to investments programs (also see para. 88).

54. Rules of the Game from the governance viewpoint usually suffer from shortcomings thatmake it difficult to implement projects in a cost-effective manner to achieve intended objectives. Itis important that the role of the State be a recognizable and accepted one. This supposes that aproposed role has been drafted by the officials responsible for the particular sectors at stake, that thisdraft has been widely circulated among the population at large as well as among the oppositionparties and the population most directly affected by the project. This implies also that the populationbelieves in the legitimacy of the current decisionmakers and the country's rulers. Furthermore, thedecisions are made in accordance with transparent procedures and sectors involved believe they aretruly invited to participate if only to give an opinion or suggest improvements. This is particularly

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critical for project beneficiaries and victims. Finally, it is important that the population believes thelaw and its enforcement is a reality that is speedily and efficiently applied equally to all. Otherselements can be added, such as the way rulers are elected, whether gerrymandering is a key factorin this process or not, and whether this reduces substantially the rulers' credibility. The finalselection of elements must be germane, at least indirectly, to the particular development program atstake; thus, the analysis of potential ICGs from this viewpoint should also refer to disaggregatedtasks as much as possible.

55. Good will and well-intentioned decisionmakers and country leaders, in general, can use theabove discussion and resulting increased awareness about governance-related IC constraints to includeremedial measures that would have a real effect on improving the situation, when added to otherstaken while preparing and implementing other development activities. They could begin a legislativeprocess accompanied by a long-term cultural program to modify mind setse3 and imbue thepopulation with the belief that some important changes are going to take place to reverse the currentsituation and ensure that ultimately the rule of law will prevail. Once again, it should be recognizedthat this is a very long process indeed, and that individual development activities can demonstratethe seriousness of those who govern about progressing toward such a state. At the same time,individual development-related ID measures must contribute to effectively improve the currentinstitutional receptiveness so as to increase chances of success of the corresponding developmentobjectives.

56. Other Rules-Of-the-Game Issues. The constitution, legislation (general as well as well assectoral), and regulations or norms are often mentioned as causes of capacity gaps when their contentis compared with what is required to implement development activities. Some elements must beaddressed more directly at both the ICA and ID strategy design stages. If the constitution of acountry does not allow privatization of a public enterprise or purchase of privately-owned land forimplementing agrarian reforms, it will render nearly impossible the implementation of a project thatincludes such activities, unless a related modification is proposed by the executive power and ratifiedby legislative action. This could come about from an increased awareness that the variousconstitutional stipulations are no longer relevant or are impeding the necessary reform measures.Similarly, when the general legislation of a country does not offer clear guidelines for carrying outsome innovative development activities, or when existing rules are clearly against such activities, orwhen the sectoral legislation does not exist or is notoriously insufficient or contradicts the general

'it becomes important, then, to include special 'school curricula items' that could help reverse corruption trends, tryingto modify erronoous beliefs such as 'one can be corrupt if state officials arc'; or 'one would never receive justice becausejusticeis not applied the same way for all citizens', or 'one can make a better living out of trying to beat the systen and short4ermgains, than out of competent and hard effort". Of course, to reverse such attitudes may take a long time, but if the process hasbegun, then the community of donors may be convinced that a country is in the process of improving govemance, which makesit more credible when compounded with other less longer-term measures, such as the ones analyzed below.

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legislation, then this should be carefully analyzed and specifically addressed. Generally, when thedecisionmaker cannot make an immediate decision to change something on the spot or within areasonable time, this may indicate the need for a few months of consultant services to review thesituation in greater depth against new requirements, with the aim of developing some options to besubsequently proposed to the executive and legislative body for action after verifying whether anythe proposed changes are actually bridging ROG-related ICGs or increasing opportunities forcorruption (para. 49). This is especially important when new legal dispositions must be drafted andapproved for new sectors, such as the need for protecting the environmnent and to renew key naturalresources. ]It is important, though, as ICADS teaches, to carry out this identification of ICGs strictlyagainst tasks and not in the name of preconceived ideas that are generally found in state-of-the-artliterature. 'rhe idea that the constitution and the legislation be thought of as being at the service ofthe community that needs to be developed, rather than the other way around, is an important partof the ID spirit inherent to ICADS.

57. Very often development activities are well within existing legislation both at the general andsectoral levels, but are not detailed in related regulations. As a result, no one knows with certaintyhow the law must be understood or enforced; this can paralyze key activities while trying toimplement development activities. Therefore, ICGs identified from this viewpoint must be reviewedcarefully in terms of possible hurdles that would need to be addressed. In general, it must bedetermined whether corrective action can be taken as the result of a simple decision authorities make,or if prior studies must be carried out to better identify the problem and draft alternative solutionsfor the executive to take action. Consultant services may also be required to carry out this effort.

58. Finally, capacity elements within the ROG category is the part of the institutional readinessthat depends on dominant cultural patterns among decisionmakers and professional/technicalimplementers, as well as among the beneficiaries/victims of the intended development objectives.The list of tasks has been used to determine whether any cultural aspect is going to provokeresistance or opposition to the point of creating implementation difficulties that have been identifiedduring the ICA process. The discussion with the decisionmakers must have shed some light onalternative solutions, which may include a public information campaign, participation of communityleaders to formulate acceptable alternative solutions, as well as participate in the implementation ofthe agreed remedial measures. Here, too, it must be possible to design information campaigns,reformulate school curricula, and other measures that will prove beneficial if actually discussed withthe interested communities, i.e., those in which cultural obstacles have been detected.

59. Therefore, the part of an ID strategy that addresses ROG-related ICGs, must rely heavily ongovernment decisions and commitment. This must be reflected in the financing documentation. Inthe case of World Bank's procedures, it is possible to use the "conditionality device& which is

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generally included in every operation (see para. 52). Therefore, a government's decision andcommitment can be considered as an effective ID vehicle as long as both parties. the financial entityand tie government. agree to enforce their respective commitment. If this actually happens, thenID is a real process that will yield effective results. If this does not happen, it means there probablywas a hidden agenda and that the stated objectives (Form A) were not sincere or meant to beachieved. In such an eventuality, the financing entity should recognize this, discuss it with thecorresponding authorities, and possibly cancel the operation or what remains of it. The other IDcomponent inputs, such as specialist assistance, training, and financial and physical capacityenhancetnent, are also aimed at installing more powerful or additional capacity elements that mustresult in implementing efficiently development tasks at stake. Otherwise, the financing entity mustadopt the same attitude of ensuring that initial agreements on an ID strategy and work program areactually enforced to the point of cancelling operations if necessary. This will enhance the credibilitylevel that is too often missing, which explains to a large extent the low success rate of most IDstrategies and action plans.

60. Interinstitutional Relationships Issues. ICGs from the IRR viewpoint imply a reorganizationof the distribution of responsibilities among designated implementing entities, the way anticipatedrelationships arnong them are going to work to implement common or related tasks, and the legalor regulatory arrangements for them to work as indicated. Of course the network of entities, theirinterinstitutional relationships, and the arrangements made for this to work as described, must notbe changed or created just for its own sake-i.e., for 'aesthetic' reasons-but because a capacity gaphas been identified. This means that whatever the interinstitutional organization, it should besatisfactory if no capacity gap has been identified while reviewing the indivdidual tasks. Decisionsto adopt remedial measures can be made directly by the decisionmakers, for instance, when it isnecessary to complement the network of entities to take care of functions or parts of thecorresponding work programs that have been accidentally left out, or when it appears to be moreefficient to give certain responsibilities to another entity. In addition, certain IRR-related capacitygaps may need further specialist assistance (e.g., organization science specialists) to look into thecurrent interinstitutional organizational setting in greater detail before alternative remedial solutionscan be designed and implemented. The same recommendations apply to the arrangements made forentities with interrelated work programs or even limited tasks to work together efficiently, i.e., nonebehaving in such a way as to reduce efficiency of other entities' performance, This also can be theresult of a simple decision or may require specialist analysis. Experience shows that althoughinformal relationships between two or more entities can work perfectly because their respectivemanagers are from the same.political party, or simply friends, it cannot be taken for granted that thiswill last for the duration of the project or for the time necessary to implement the correspondingtasks. Given the quick turnover of staff, it may be necessary to strengthen IC by creating moreformal IIR mechanisms, such as specific legislation when the permanence of the relationship is

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obvious, or more simply in the corresponding regulations, or when the relationships are limited tothe implementation of a few tasks for a very brief period in agreements signed between themanagers, focusing on specific task implementation requirements.

61. nternal Organization Issues. As for the previous elements of capacity, gaps from thisviewpoints can also be bridged by decisionmakers and/or managers of the particular entities wherethe problems have been identified. For instance, when an entity does not have an administrative unitcorresponding to new function as they result from the implementation responsibilities assigned to it,its manager can'decide to create it with all the specifications required. Nonexisting or inadequateinternal manuals can be created by the entity's own staff to reflect new procedures required for theimplementation of specific work programs. Bad management style can be improved through trainingor changing managers, or also through specific incentives. The internal relationships network canalso be easily adapted to new requirements. Improving the physical and financial capacity to helpenhance the operational capacity can also be the result of internal decisions or decisions made withinthe institutional universe in charge of the whole program to assign more resources that would becomepart of the budgets of relevant years. Conversely, all or some of the above measures can be takenonly after specialist assistance has been used to review the issues at stake in more detail andproposing alternative solutions to decisionmakers and entities' managers.

62. Personnel Policy and Reward System Issues. ICGs identified within this category aregenerally more difficult to resolve since they often depend on civil service rules that rulers do notnecessarily want to change, believing that it would somehow threaten their own political base.However, well-intentioned decisionmakers, who find it difficult to develop their countries becausethey constanty confront these kind of issues, know they must do something about it. In this regard,donors should help increase awareness by devising innovative and possible alternative solutions.These may be long-term in nature. They may not be of much assistance in bridging capacity gapsidentified against tasks that need to be implemented in the short term. But this is not a reason topostpone laumching a process to change the situation in the mid or even longer term. However,possible ID measures to tackle this category of ICGs exist and should be considered when designingID strategies and action plans. Sophisticated measures have been worked out in Colombia, wherethe agronomic research needs required high-level professionals usually absorbed by the private sectorbecause of rnore attractive reward. In an agriculture research project, to be financed by the WorldBank, a deciision was made to include a 'scientific premium' that would be attached to the salariesof those professionals willing to remain in the public sector. This, added to the prestige of analready respected research institute made it more interesting for confirmed researchers to remain inthe public sector because they were given better working conditions (modern laboratories andequipment) in addition to better compensation packages. Furthermore, whatever the particularcharacteristics of any civil service, it is possible to interpret its rules in a way that is considered

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advantageous by the staff of given entities. This may include the possibility to explore, with theparticipation of the staff most concerned, the maximum flexibility offered by civil service rules, anddetermine how they can be implemented within the working environment. Even when this does notresult in any positive action, the staff will understand it because they were given a chance toparticipate and analyze the situation more directly themselves. In addition, the implementing entities'managers can create better working environments, acquire better furniture and equipment, use moremodem management techniques and style, whereby staff believe they are important because they aresystematically consulted and associated one way or another before important decisions are made.All this can be done intemally with existing capacity, or with the support of civil service and/orpersonnel management specialists.

63. Skill Issues. The lack of skills is the most pervasive capacity gap plaguing all levels of staffand beneficiaries in development projects. In development practice it has become commonplace tobelieve that skill problems can be tackled through training. Indeed, projects without a trainingcomponent, or at least some training activities, have become extremely rare. Unfortunately,systematic review of training components of investment projects largely show that training activitiesare far from being effective or even satisfactory. This is because they are generally poorlydesigned, without prior SGA, and also because training, even technically well-defined and delivered,may not solve all skill problems when implementing development activities. It is therefore importantto carry out a systematic SGA beforehand, but also to analyze carefully the identified skill gaps soas to have a better idea of how to bridge them. The first important aspect to remember is that theSGA is not carried out from the individual but from the institutional viewpoint". The objective isto include the entire implementing institutional universe, including beneficiaries and potential victims,and to have all the skills in place to implement their tasks efficiently. This implies that when aprofessional staff member does not have the necessary skills to perform his/her own tasks, trainingwill be required; on the other hand, the tasks may also be assigned to another staff member withinthe entity in charge who has those skills. A decision must be made about what is the most effectivesolution for the task to be implemented on time and effectively, as described in Form C. Indeed,if the training required to bridge an identified skill gap is going to take several months, it probablymeans that the task has been assigned to the wrong implementer. The date by which a task outputmust be delivered as well as the training cost are key factors to make an adequate decision aboutwhether to bridge identified skill gaps through training or to give the task to another, more skilledstaff member.

64. It is important to note that ICADS offers the possibility of designing a tailor-made trainingactivity that will be cost-effective. This is because precise skill gaps have been identified against

44Scc footnote 29.

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work programs disaggregated into tasks. As a result, skill gaps only refer to required skills, ascompared to traditional training courses based on "packages" that, at best, reinforce the knowledgeor information participants already have and at the same time, may skip what they actually need.ICADS-induced training activities are short in duration. Curriculum specialists will find all theinformation they need to prepare this tailor-made program in Form Dv. In addition, the schedulingof training activities can also be made more efficient because the task dates clearly indicate when theskills must be available. If the SGA has also involved samples of intended beneficiaries and victims,as recommended in ICADS, it becomes easy to devise mass communication campaigns through radioand television, or else the content of which must necessarily be adapted to the requirements suggestedby the identified skill gaps. Training modes can also be deduced from the nature and scope of theidentified gaps and the level of staff or beneficiaries involved. Training modes should use internalcapacity as much as possible to transfer knowledge and technology. ICADS helps do this by usingstaff who do not have any skill gap, as indicated by the "5' rating in Form Dv. All '5"-rated staffnecessarily become resource persons for sharing with less skilled colleagues the knowledge and skillsrelevant to particular tasks. Then, internally organized courses or workshops can be prepared anddelivered using the same competent staff and/or inviting outsiders, depending on the nature and scopeof the information, knowledge, or know-how to be transferred. The same can be organized anddelivered using external services. Fellowships can be used for longer-term training activitiesalthough this should be limited to cases when the longer-term generation of special skills is animiportant ID element for the particular development program at stake. Study tours and guided visitscan also help bridge specific skill gaps. For any of the above activities, consultant assistance maybe necessary. When this is the case, its purpose, inputs, and operational use must be defined withinthe training subcomponent.

Step Twelve: Synopsis of the ID Strategv and Program.

65. The above effort should result in a PSIDC aimed at bridging identified ICGs so as to cost-effectively enhance IC to the level required by the implementation of the particular developmentactivity at stake. This effort is project-supported because the inputs and their impact on IC generallypermit more enhancement than what is stricly required by the project. Indeed, when governanceis touched on or legislation, that is ROG IC elements, it is obvious that it will probably bring aboutimprovement in the sectors involved within the perspective of specific activities as well as others.To improve the organizational sharing of responsibilites within an interinstitutional universe, or inspecific entities within it, better organization and distribution of responsibilities and of functions ingeneral will be required, which will probably have a positive impact on the particular project atstake, but not be limited to it. For instance, the creation of a scientific premium to help mnitigatenegative effects of a civil service policy is going to have positive effects on many more activities thanin just one project. When staff or beneficiary skills are improved they are likely to use them for

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more than the limited tasks that determined they were suffering from specific skill gaps. However,again, it is important to try to design an ID component to include inputs related as precisely aspossible to identified ICGs for the sake of efficiency of the ID strategy and action plan. These willcertainly have a broader impact.

66. The government's decisions that have been made to bridge certain ICGs from own efforts areto be included in PSIDCs in the form of elements of financing conditionality that are used tospecify under what conditions of non-conformity with ID agreements the financing would becancelled. They will also be included in the 'conditionalityu section of technical documents (suchas the Staff Appraisal Report (SAR) and in the Loan Agreement, in the World Bank) or in legaldocuments between the borrowing governments and the financial sources. The other inputs, namelyperson/months of specialist assistance, training activities, and others such as the financing of physicaland/or financial capacity enhancement, must be defined more thoroughly in PSIDCs' working papers,and a synopsis prepared such as the one proposed below. Such a synopsis can be helpful also when

carrying out additional meetings with decisionmakers to convince them to give priority attention tothe PSIDC inputs, which should become the key source for providing capacity wherever it is missingwhile entities implement projects. The synopsis can also be used to help visualize how far apart theactual and planned IC are from each other, and to measure and show progress at any time thereafter,in particular, when it is necessary to update the proposed ID program as a result of implementationexperience. Finally, it will be an initial guide for the specialists who will be given the responsiblity

to create and maintain the HDF4 5.

67. The two major ID inputs, besides government decisions, are specialist assistance and trainingactivities. Other possible elements such as construction and equipment and/or the financing of

recurrent costs to pay for additional salaries or maintenance costs are part of PSIDC only for certainelements that have not been included in other components of the project or investmnent under

consideration. It is important, for the sake of efficiency, to be particularly careful in designing both

the consultants terms of reference (TORs) and the training content. The relevance of the training

content has been already explained above. Special mention should now be made about technicalassistance (TA) and the corresponding TORs, because these are generally poorly defined, resultingin creating conditions for failures, or reduced efficiency, in most of development work activitieswhere TA is used. ICADS provides sufficient guidance for this, too. Indeed, if Form C has been

well prepared, i.e., if the task list describes how the goods and services acquired with the

corresponding financing will be used, consultants' TORs are already built in into the form of tasks

that describe how the corresponding services will to be used efficiently. This list ends with tasksdescribing how to ensure that the benefits obtained out of the efficient use of the corresponding

4'Scc below pam 89.

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services will be sustained. This, too, is an important element of the success of TA activities andhelps to efficiently complement TOR information. In addition, this procedure ensures a closer,easier, and ultimately more efficient relationship between the needs and what the TA will accomplish.

Insttutlonal CaDacky Analysis and Develoonment SyatemForm F: ID Stratev and Action Plan Snoosis

ICO Code" ICO Sub- lnstltutioal Development Strategy and Action PlanCategory"_

Govemnment Decislonse Technical Assiatnce" Tnining Actlvities' Others"

DiOI ROOLE04 3m/nm of a lawyer

Di02 ROGOOV3 Enforce tansparency rules 3mIm mnagementand procedurs through an specialistad hoc decree .

Di03 ROOLE04 Same as above DiOl

DvOl SKLINFI One-day seminor

Dv02 SKLINF2 Haf-a-day semiar DvO7 SICLKHWI Three-day procurement

course

"Use same codes as in Forms Ei and Eii.

"7Taken from ICADS Selected ICO Typology page 54.

*Activities that do not require any fitnancing for the acquisition of any ID input.

'eMan-months of specialist assistance by specialty. See par. 67.

50By name of training activity (course, seminar, workshop, study tour, feliowship, etc ...) See paras.63-64. A delailed training plan should also be prepared and can besummarized in a table such as the one shown on the next page.

"ID-rclated construction, equipment, recurrent costs of any kind, etc.

. , . . ~~~~~ ~~~~~~~Tnd Plk n

Tlskq Act Ica Affect.e Tasbig Couiur Tnhee T111 Sewj Du 1Deley Ta PheeCode" Tuiks"

CM|e Nme' N_ _be__ _ Ntba

01 Semh.r DvOI 0101001; Duwcr1pooftde 240 A-B-C Project 0193 Tllwku0201003; potkkal Coodb0401001 aavlroemeuaud

MmTOnomdhg the

02 Seahba DvOZ m DeacrIpti of ste eS A-B-C Mhniby of 09193 TiwukuProject isel, e Ph-mins

- oo~~~~~~~~~womik

00SComes from Form Ei.

3Comes from Form Ei.

-Training activity curriculum. Normally it should be strictly related to identified skill gaps.

S5 Name the training source: entities'own training program; external consuling firm; school, university, places visited, etc.

-This date should be consistent with the task achievement dates entered in Form C.

fWhere the corresponding training activity is going to take place.

"aAny order number. Example: 01, 02, 03, etc ...Or if one wants to distinguish the order number within every category of training activity: Al, A2, A3. (A meaning formalcourses); BI, B2. (H meaning seminars), etc.

"9Name the training activity: course, seminar, workshop, study tour, fellowship, etc.

'Number of staff to receive the corresponding training activity.

"'Same as in Form Ei. Enter only the corresponding letter(s).

03 Corn DvO7 0101001; How to cquire 25 B-C CiuuIud 121930201001; goand vkc World Bj Iff0301001 in hecordaicewih b

I I d~~~hwuuid6 II NrepalmiomecetbiI_ _ _ _ _ _jI

_ _ _ _ _ ~~~~~~~~enforced _ _ _ _ _ _ _ _ _ _= - = = - -

*~~~~~~~~~~~~~~~~~~~~~~~~~~C

Sf~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

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Section II:

ICADS in Countrv. Sector. and Policy-Based Lending Operations

68. Introduction. One of the most important principles of ICADS is to analyze IC againstdevelopment objectives. Forms A, B, and C above include the corresponding information when theconcept of 'development objectives' applies to investments where intended outputs can be easilycircumscribed in time and space. However, the concept of development objectives can also applyto macroeconomic decisions'2 at the level of a country development strategy or plan, an entiresector development plan'3, or a subsectora development plane. ICADS can be used to deal withthese broader development objectives. These development objectives have in common that no directfinancing is involved, but instead decisions of an institutional nature. Occasionally decisions haveto do with the creation of entire sector/subsector IC, as has been the case for environmentalprotection in recent years in several countries where such capacity did not preexist. Thus,institutional conduciveness and capacity indexes are important factors to consider during the ICAprocess and for the design of ID strategies and action plans. This section provides a description ofICADS steps and Forms when dealing with these cases.

69. Form A: Objectives. Although macrodevelopment objectives at the country or sector levelsare broad and generally of a longer-term nature than investment objectives, they also can bequantified. The decision to fix certain quantitative indicators to express what the decisiommakerwants to increase or do better must be explained in the "expected-impact" column. Similarly, thesenmacrodecisions must also be made with certain categories of beneficiaries in mind. The developmentprogram or objective at stake may also result in victimizing other segments of the population. FormA can be used for the analysis and presentation of development objectives of these levels. Belowis a list of precautions when so doing:

(a) enter the, exact kind of development activity in the heading: e.g., Country DevelopmentPlan; Structural Adjustment Program; Agriculture Sector Development Program;Agriculture Sector Structural Adjustment Plan; Health Services Sector DevelopmentPlan; Education Infrastructure Subsector Development Plan; or Institutional setting forhandling new sectors/subsectors.

'Such as global economic production or structural adjustment measures.

'For example, the agriculture, energy, and education sectors, among others or sectoral structural adjustment programs.

'4For example, within the agriculture sector, the subsectors of extension, research, marketing, irrigation, etc.

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(b) a general objective should be entered describing the global context of the developmentactivity or institutional creation at stake hopes to achieve at the end of the period underconsideration;

(c) ucomponent" signifies the different parts of the development plan described above,including the different parts of the plan, the different aspects of the institutional creation,and the different elements of the broad development objective;

(d) objective description: as precise as possible, but not including the quantitative indicatorsand expected impacts, which will be entered in subsequent columns; the substance of thedevelopment activity should be described; here, too, it is important to describe resultsexpected, for instance, economic profiles that are sought at the end of a given timeframe, rather than descriptions using verbs that only indicate processes;

(e) quantitative indicators may be more global and approximate than in investmentoperations; however, they should quantify desired changes, whether in terms ofproduction, productivity, or a combination of both;

(f) expected impacts should provide a rationale for every quantitative indicator entered inthe previous column; and

(g) beneficiaries and possible victims should be entered the same way as in investmentoperations: how many? who they are, their characteristics, and where they are located(national or regional).

70. form B: Institutional Responsibilities. After making the decisions described in Fonn A,filled out with the above precautions in mind, decisionmakers must assign institutional responsibilitiesso that all functions necessary to implement the development plan are assigned to given entities, thuscreating them if they do not exist. The entities must acknowledge, understand, and accept theresponsibilities. In fact, ICA will be conducted to assess whether the IC of the institutionalimplementing universe is commensurate with requirements. Therefore, Form B should specify theexact sharing of responsibility and indicate which entity is responsible for what function. It is highlydesirable, for the sake of clarity, that every responsibility be assigned to one entity. When morethan one entity appears in the left-hand column of the Form, it is probably because the correspondingfunction is too aggregated. A precise description of what each one in these. entities will do is arequirement. Ihis form is different from the one used for investment operations. Therefore, anexample is provided on the next page, followed by explanatory notes to facilitate its use by theanalyst.

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71. Eormi C: Task. When macrodecisions are made about changes in the general economy, or

in a specific sector or subsector, public and private sector entities necessarily have tasks to achievein accordance with the role of the State in the corresponding sector, or for that matter thedevelopment of the economy as a whole, whether this role is explicit or implicit. It is very conunonthat decisionmakers at these levels make decisions and assign institutional roles without making

explicit who is going to do what to perform their roles in a cost-effective manner. In structuraladjustment operations, for instance, it is commonly decided to work toward balancing the budget as

of the following year. The corresponding responsibility is assigned to the Ministry of FinanceBudget Department. This department, which has been working for years on deficit budgets, doesnot Inow how to start Will they have to cut spending across the board in every single sectoralbudget proposal? Establish priority criteria? How are they going to impose decisions on the differentsectors affected? Do they have the legal right to do so? Are the interinstitutional relationships

between this department and the spending entities sufficiently clear and regulated for thecorresponding decisions to be accepted and effectively implemented? If the 'macrodecision' and itscorresponding objective and related distribution of institutional responsibilities have been welldefined, it is necessary, in addition, to describe technically who should do what to implement thecorresponding work program and achieve the expected results. This means that the decisionmakerand his/her advisers must describe precisely who should do what in the form of a sequence of tasks.This is also the case for investment projects, except that since no investment is generally attachedto this level of decisionmaking, this sequence does not describe the acquisition of goods and/or

services: it is limited to the technical and administrative tasks necessary to actually implement thecorresponding measures. Here, too, it may be necessary to add tasks intended to ensure that thebenefit obtained from imnplementing these measures will be sustained. The same Form C used forinvestment levels (page 17) can be used here as well. As before, it will become the basis for

carrying out ICA in a systematic way.

72. Carrying out ICA at Macro-levels. The process is exactly the same as in investmentprojects. In some cases, it will be desirable to pay more attention to the ROG aspects because

macrodesisions are more likely to be successful if the institutional conduciveness index is high (ICII

above 35). Otherwise, interim measures may be needed, including longer periods of implementationtime, to increase the chances of success. This may not be true when the decision at stake is intendedfor the very short term only. For instance, any dictatorial or de facto government can effectively

balance the budget for one or two years to obtain special credits from the IMF. But if its ICI1 is

much below 35, it probably will do at tremendous social cost, and the outcome will not be sustained.

The measure will thus be only technical and not be shared by the general population. Additionally,other aspects of ROG may be as important to consider as investment levels; namely, are the

constitution, legislation, and corresponding regulations, adequate to allow for successful adjustmentmeasures? Finally, cultural patterns may also suggest that a prior information campaign is necessary

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before the measure has any chance of succeeding, particularly when the participation of given sectorsof the population is a key factor. The other capacity elements will be reviewed in the same way asfor investment projects. The tasks tell the analyst what the different entities and their administrativeunits have to do; therefore, the question of their capacity from the viewpoints of UIR, ORG, PPR,and SKL should be raised in a systematic way to ensure adequate identification of related capacitygaps, and to help design an ID plan that will actally help increase IC as needed. However, quiteoften the resulting ID strategy and action plan require fnancial resources. Whether these resourcesare substantial or not, and whether it is going to be provided from internal or external sources, it canbe implemented either independently, through TA operations for instance, or incorporated in full or(preferably) in part in specific investment projects that are designed to implement the developmentobjectives proposed. For instance, if ICGs have been defined from the ROG viewpoint in anagricultural sector adjustrnent operation, e.g., from the legislation and regulation viewpoints, someof them may be part of a PSIDC included in an agriculture services investment project, and anotherpart of the ICGs included in the IPSIDC of an irrigation project. Of course, it is desirable that thework carried out by specialists should be relevant to the subject matter included in all projectsincluding a PSIDC. But this should be considered optional and depends on the availability of severalinvestment projects within an acceptable time frame (See Diagram page 76)

73. In other words, ICA at macrolevels should lead to an assessment of the current IC whencompared to development objectives. The IC profile of a country or economic or social sector isprobably never at the level required to make across-the-board progress or in a particular sector. Thisis because IC does not have to be at a higher level than the current state of affairs requires. Butdecisionmakers who ignore the need for increasing IC in a manner that helps ensure effectivenessin their development undertakings are simply squandering public resources, and almost always getless overall wealth for their country at the end of the process. Most often they do this because theyonly consider their particular interests and the ones of the limited groups they represent. Suchbehavior is less costly at lower levels of IC when almost no transparency is allowed; however, realdevelopment,, meaning authentic achievement of stated objectives is simply not part of their agenda.Conversely, idecisionmakers enjoying true legitimacy, a situation that already implies a hihger levelof IC (in particular, for governance when ICII is acceptable), will do their best to make sure that:

(a) the State has a well-defined and accepted role; by implication the private sectorunderstands and accepts the environment created by the definition of the role of theState; the private sector is always given a chance to express any "better idea" it mayhave;

(b) the policy defined as a strategy to implement this role efficiently has been well definedand shared with concerned population groups. This implies, that cultural factors have

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been adequately considered, either to maintain them as they are or to modify them as

socially agreed, and that they have been installed in the development objectives;

(c) the constitution, legislation, and regulations have been checked for internal consistency

and a strategy and program defined to modify them as required by the development plan,

based on wide spread public approval;

(d) the implementing institutional universe has been duly identified and the correspondinginstitutional responsibilities clearly and correctly assigned;

(e) the implementing entity's IC has been diagnosed against responsibilities disaggregatedinto tasks, and an IC program has been established to increase specific IC to the level

required by new responsibilities; this implies that they have or will be given the

institutional, physical, and financial resources needed;

(f) the personnel policy and reward system (civil service or other) is adequate to enable theimplementing institutional universe to hire, fire, retain, and motivate all levels of staffrequired; and

(g) all those involved, whether decisionmakers, managers, professionals, technicians, thedirect beneficiaries of the developmem objectives at stake, as well as potential 'victims

of these objectives, will possess or will acquire all new skills necessary for them to

execute their tasks efficiently.

74. Of course, this list of 'conditions' will never be completely met or as ideally expressed.

However, well-intentioned decisionmakers, rulers, and managers should install their development

plans and activities within an institutional environment characterized by tendencies toward the various

situations defined in this list. ICADS should be considered as an instrument to help them do exactly

this: better define their objectives; make them transparent helping to reach a consensus; translate

them into technically sound work programs; and finally, ensure that the level of IC required will be

built over time. Therefore, ID cannot be successful if conducted in a piecemeal way, except for

short-term limited objectives that do not include sustainability efforts. Societies as a whole will take

long-term advantage of ID when dealt with from the perspective of improving governance, in

addition to the other IC elements. In other words, ID without progress in governance is not for the

long term-as ID should always be. In essence, ID without progress in governance is bound to fail.

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Institutional Cavactv Analysis and Develomnent SystemForestry Subsector Develooment Plan

Form B: Ascnrbing Institutional Responsibilities

Code(a)SS Description of Activity or Function(b) Institutional Responsibility(c)

01 01 Reornization of the Ministry of MAL/CabinetAgriculture and Livestock (MAL)'s

_ Fo ry Directorte

01 02 Definition of the role of the State ill Ministers Counselthe Forestry subsector: Poltical

01 03 Definiion of the role of the Su i c MAL's Forestry Directorthe Forestry subsector. Technical

01 04 Definition of a longer-term forstry MAL/Cabinetdevelopment policy

02 01 Definition of network of reationships MA1JCabinet/ME/Cabinetwith the Ministy of Environment

02 02 Proposed decentrlized net of MALUCabinet/ME/Cabinetrelationships: the Federal viewpoint

02 03 Proposed decntrlized network of Provincial governmentsreltionships: the provincial viewpoint

02 04 Ppatiqon of related legislation and MAL/Cabinetregulations

0205 etc.

(a) Use four digits: the first two come from Forim A (Component Objective) and next two are a number representing theactivity or the institutional responsibility.

(b) This is a description of the broad functions that must be camied out (initially and thereafter updated, to achieve thestated component objective. It is highly desirable that such a description include not only what to do but, in addition,what kind of result is expected from this activity/function.

(c) Activities/responsibilitics must be assigned to entities that will carry them out. It is necessary to indicate the specificadminitative unit responsible for a particular function ather than only the entity.

Observation. For some development activities, it may be necessary to add a fourth column to this tablerepresenting the amount of money allocated to the corresponding entity to enable it to implement its role efficientlyand effectivel,y. This will be the case when ICA establishes that additional resources are required for the entity toimplement the corresponding work programs."

'5Ltters refer to notes described below this Table.

"See LAWPS Occasional Paper Number 3, pages 12-14.

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Institutional Capacity Analysis and Develoment System

From Countrv to Investment Levels Diagram

~~ev eopment d

Cou ry r

1 4\~~~~~~~~~~~~~~~-

- / ~~~~~~Developmet IG*\;

Objec sObjectives

Dev lope IGIA Ob'r t/ es pc

Obetie ICGscor IG

* Institutional Capacity Gaps

** Project-Supported Institutional Development Components

ICGs are first identified against CDO. Then, at the sectoral level, against SDO.

Then investment projects are used as entry points to address related ICCs.

Or, self-standing projects can also be used as entry points or other kinds of operationssuch as policy-based lending, and conditionalities in general.

COUNTRY COUNTRY InstitutionalECONOMIC . _ a> DEVELOPMENT _ _ _ Capacity Analysis:WORK OBJECTIVES ICGs against CDO

(CDO)

S SECTOR Institutional |Sector D DEVELOPMENT Capacity Analysis: ;

I Work - OBJECTIVES ICGs against SDO i

(SDO)

Institutional

Investments I Project Capacity Analysis:_ _ _ ~Development ICGs against PDO,

Objectives PSIDC design(PDO) __

I|Self-Standing ID Projects KIPolicy-Based Operations

Lending conditionality

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Section m:ICADS as a Multipurpose Management Tool.

In troducti on

75. Thlus far, we have described ICADS as a tool to analyze the IC of the universe ofinstitutions with responsibility for achieving development objectives (ICADS as a ICA tool).We have seen that ICADS, while being used for capacity analysis, also simultaneously enhancesthe IC of these institutions (ICADS as an ID tool). In fact, ICADS goes beyond these twotools. It can be used for project identification and preparation (ICADS as a projectpreparation tool); for project appraisal, in particular feasibility aspects including risk assessment(ICADS as an appraisal tool); for the distribution of responsiblities at the interinstitutional leveland within every entity (ICADS as an organization tool); for organizing the work of staffmembers at all levels based on annual work contracts, leading among other things, to moreobjective performance assessment (ICADS as a personnel management tool); for thedisggregaton of implementation responsibilities into work programming (ICADS as aprogramming and monitoring tool); and for periodic and final evaluation work (ICADS as anevaluation tool). This multipurpose feature of ICADS as a management tool is explainedbelow. The most important feature of ICADS is that it can be used as one single tool for allthese purposes with few or no modifications.

ICADS as a Project Preparation Tool

76. In the use of ICADS as an ICA tool (as discussed in Section I), the starting point is whena decisionmaker can express what is to be achieved in terms of doing something better or doingmore, or a combination of both. However, instead of waiting for him/her to know in detailexactly what the development objective is going to be, it is possible to use Form A to set up theinitial version of a draft development objective as it occurs to decisionmakers. The way ICADSthree first forms must be filled out will greatly assist decisionmakers to determine how toexpress what they want to achieve. The quantification of desired improvements and the answersto the questions for what purpose? after every quantitative aspect, and Who will be thebeneficiaries? including their characteristics, location, etc., will facilitate understanding-evenif no answers are available at the early stages of project preparation and even if additionalstudies must be undertaken before decisions can be taken. Form A (objectives) is a valuable toolto press decisionmakers and their advisors to move faster with project preparation. Form B,where the financing is described by activity, and cost elements are disaggregated according tothe country accounting categories, leads decisionmakers to present in a straightforward way what

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goods and services are to be acquired to enable the implementing entities to achieve the expectedbenefits, as expressed in Form A.'5 Finally, the last column of Forn B, i.e., informationabout entities that will handle the financing of each "activity," forces decisionmakers todetrmine who will do what at an early stage of project preparation. This will help determinewhether the available institutional network's capacity is adequate for the kind of investments atstake, and whether it is sufficient to achieve the expected outputs-even before initiating an ICAexercise.

77. However, Form C offers the most innovative and efficiency-inducing feature of theICADS method. The spealists who advise the decisionmakers are asked to explicitly state howthe resources they recommend mobilizing will be transformed into the expected outputsdelineated in Form A. They usually do not do this in a sufficiently disaggregated manner. Evengood technical advisers seem to take this for granted; i.e., all that is required is to allocate theresources and define objectives for the implementing entities and staff as well as the beneficiariesto know exactly how to use the money efficiently and obtain the expected outputs. This is rarelyif ever the case. On the contrary, supervision reports describing what happens at implementationprovide ample evidence of the lack of understanding about how to get organized, the tasksthemselves, and how to execute them efficiently. Thus, ICADS requires that the followingquestion be answered by decisionmakers and their advisers, especially those who helped definedevelopment objectives, related inputs, and resources:

-Can you describe in detail who should do what to ensure that goods and services will beacquired anid used efficiently and their benefits sustained over the longer term?

Thus, time is saved while preparing a project since specialists must rationalize their technicalchoices at each stage of project conceptalization, and because Form C requires them to answerthe question on "task output expected," which is a check as to whether technical decisions madeat any stage are consistent with intended outcomes.

78. The URMap should further help decisionmakers determine whether the responsibilitiesassigned to given entities are covering all implementing requirements. In addition, there is anopportunity 'to initally organize the distribution of responsibilites among these entities, and veryearly in the process begin to consider whether the various entities in charge have the capacityto follow through. The assignment of a group of tasks (from Form C) to given entities may

65Forns B gains a lot in time and efficiency, and should be filled out in accordance with modem integrated accountingprinciples.

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trigger the idea that "this is too much for this entity," as a decisionmaker said on one occasion.Another decisionmaker was unable to allocate a task cluster to any entity because no entity couldperform the work as envisaged based on the functions implied by these particular tasks. Thefour first steps-finling out Forms A, B, and C, and preparing the IERMap-together representa conceptual device as well as a tool to improve and expedite considerably the projectpreparation process. They should also lead the decisionmaker automatically to start thinkingabout the ICA exercise. Iar, when the ICA process itself is underway, decisionmakers shouldbe more receptive to identifying capacity gaps and ultimately be better prepared to acceptinstitutional strengthening suggestions.

79. Natually, the use of Forms Di to Dv, even at an early stage of project preparation-andthereafter when supplementary information is available, and more complex decisions are made-will lead to improving these forms. This will, from the beginning, provide conceptual efficiencyand indicative perceptions that should improve the information included in Forms A, B, and C,and on the lIRMap. Indeed, questions about task feasibility from the various capacity elementsincluded in ICADS will help decisionmakers realize that a better idea or formulation is possiblethan the initial one. The resources necessary for each activity will be much better understoodand defined after the feasibility review is completed. The disaggregation of tasks also will bemore complete and accurate when the tasks are matched with real administrative units andindividual implementers. A review of the related ROG viewpoint will reveal that, e.g., certainobjectives or tasks are simply impossible to achieve if some aspects of the ROG are not changedat very early stages of project implementation. Therefore, as a project preparation tool, ICADSfacilitates a recurrent process that indeed, should start at project identification and not end untilProject objectives have been achieved or when available funds have been effectively spent.'6

ICADS as a Project Appraisal Tool

80. Although World Bank managers and mission members have carefully reviewed all thenecessary documentation before appraisal missions go to the field, often they have to supplementconsiderably the information available, as well as have the government staff answer manyquestions during the appraisal mission itself, which can distract mission members from theirmain purpose, i.e., appraising the government's proposal. This is because very rarely has thepreparation work been organized in such a way to provide quick answers to all possible inquiriesstaff generally have when appraising projects. However, if ICADS has been used for projectpreparation, as described above, and if, in particular, an effective capacity assessment has been

uSe= also MDF below pam 89.

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carried out against project tasks, as recommended in Section I above, the appraisal missionshould quickly have answers to all questions they may have once the preparation work has beencompleted. Form Ds include such information using "5" ratings that indicate no capacity gaphas been identified for specific tasks from any of the viewpoints considered in ICADS, whichcover all aspects of appraisal criteria generally used in Bank operations. If capacity gaps havebeen identified, the information included on these Forms helps appraisal mission membersunderstand the problems and verify easily whether the solutions proposed in the form ofcomponent inputs are relevant, technically accurate, and quantitatively and qualitativelysufficient. The most impressive achievement of ICADS in this regard is the use of Form Dvfor the identification of skill gaps of the universe of implementing individuals, from higher levelsof management and decisionmakers to the beneficiaries themselves. Indeed, nothing is moredifficult to appraise than training components for investment operations. With Form Dv, themission member in charge can immediately see the tasks assigned to specificimplementers/potential trainees, the identified skill gaps for these implementers, and whether thetraining proposed (its nature, content, and duration) are adequate to help bridge identified skillgaps. The same applies to specialist assistance (TA). Form C should normally provide a fulllist of tasks describing exactly what a consultant should do.67 Therefore, the entire ICADSForms and llRMap will help appraial missions before departure to verify that all the requiredinformation is available; then, in the field, together with government preparation teams, verifythe consistency and detailed justification for every project input to be financed.

ICADS as a Oranizational Tool

81. Wheni following ICADS steps, decisionmakers customarily have to assign institutionalresponsibilities within the interinstitutional implementing universe or within every particularimplementing entity. ICADS helps guide them in understanding the responsibilities to assignas a result of the nature and scope of specific development objectives and the inputs(activities/resources) to mobilize. In other words, this allocation of responsibilities has not beendone only functionally, but with an eye to what it takes technically to achieve the developmentobjectives. Usually there is some vacillating before a stable definition of the respectiveinstitutional roles can be obtained, and before they can ensure that entities with a role have thecapacity to implement it successfully. The same applies within entities, when managersdistribute work programs and tasks to their various administrative units and subunits.Furthermore, capacity gaps have been identified from both the inter-institutional and the

6'ndeed, this part of the task sequence explains how the sevice' (in this case a consultant) would be used: that is exactlywhat the consultan would do.

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organizational viewpoints. Strengthening measures have been designed and agreed with thedecisionmakers, which further aids the understanding of issues at stake, and the ways and meansto address them. The IIRMap should help visualie the interinstitutional implementing universethat leads managers to understanding what they can expect from other entities' role and workprograms, and what the other entities expect in return from the implementation of itsresponsibilities. In turn, this should help detect implementation issues faster and resolve themmore easily. Besides, it contributes to create a unified vision for implementing managers andstaff members about the whole project and its implementation strategy. Finally, it can leadoutsiders, such as independent auditors and/or evaluation teams, or simply newcomers such asimplementing authorities, to institutionaUy locate project implementation responsibilities moreeasily for productive work.

ICADS as a Personnel Management Tool

82. Forms C and D of ICADS are very efficient personnel management tools for virhtulyall aspects of this important function. Indeed, implementing institutions do have sufficientinstitutional capacity wherever their staff and the beneficiaries of their development activities arewell informed, knowledgeable, and skilled enough to understand and efficiently execute theirtasks. However, responsibilities and work programs are usually assigned by others who aregenerally decisionmakers at the political level. These managers should also be well informed,knowledgeable, and sufficiently skilled; thus, their decisions should genuinely reflect the bestinterests of the population, which should be well advised about how to make the most efficientuse of available resources at any given time within given international and national contexts.If, these decisionmakers accept all the risks, political and personal, of making changes in theinstitutional environment where development activities will be carried out-such as constitutional,legislative, or rules of the game--and, in addition, obtain the participation of all parties on anongoing basis during the process, then they should be considered completely competent toachieve what is in the best interest of their sectors or even of their countries. Therefore,ultimately institutional capacity is the result of well-intentioned and competent decisionmakers,the competence of implementers at all levels, as well as active involvement of the beneficiaries(or victims) themselves. This is why it is critical to use ICADS as a personnel management toolfor all levels of staff and beneficiaries. Indeed, ICADS includes two important features: itforces the analyst to be technically comprehensive, and it induces, if properly used, systematictransparency and accountability. The viewpoints of both technical supervisors and personneldepartments should be considered.

coureayDeveloame,t Actvity

kwitutlotaw Cfeacitv Anmlvla and Develoome Sytem

Form C: IndvduaI TaskRagmegfaLsk Imolementer: M.Pereirs, Computing Activities Specialist, Piocurement Division Staff Ccekr(See Form Dv page 43):

Task Task Description Task Output and Performance Indietors Monitoring and Perfornance EvaluationCode" (and date) Yes Explanstiona

0302017 Activate computenr and cormsponding softwre Sydeme working well; after the stff uing themIn Planning and Cadaster Divisions, have been trained, no deby will be accepted (09-

30-92). _ .

0302018 Prepare Operations Manuel for naintenence and Manual ready by 10-15-92. Memal so clear andprotection of computing equipment and software, didactic at no more thn a one-day interruption

per year would occur.

0302020 Provide computerized monitoring sydem to Firms have received it and immediately have kextension srvices firms. working smoolhly. Information flos available

In the upervision unit (09-30-92). o

Iraken from the sequential list of tasks (see page 17).

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83. Supervisor Viewpoint. 'Form C a basic element in using ICADS as a personnel managementtool, is slightly modified for this purpose (see examnple, next page). Forms A and B will be usedas a reference for task design and justification; thus, it is a means to understand rationales within thedecisionmaking process itself. The following steps describe how to use ICADS to manage personneladequately:

(a) after preparing a detailed list of tasks, sequentially listed, i.e., what should be donefirst, second, and so one9, Personnel Departmnent managers will ask individuals tofill out Form C. On the original Form C, a column should include implementers'names. We now need a Form C by implementer, in which the name of theimplementer will appear only on the Form heading, and the 'Task Implementer'column disappears (see example, previous page). Only the tasks of the implementermentioned in the Form heading will be listed. Every implementer will need a FormC;

(b) every manager at any level within an entity's organizational structure will need toreceive from his/her line supervisor a Form C for every staff member under his/herresponsibility as well as for beneficiaries with whom they have direct contact for anypurpose; in general, managers will have to prepare the first draft of the individualForm C, but their supervisor will have to ratify them formally;

(c) then, a manager (at any level) will call task implementers individually and tell themthe following:

"This is going to be your annual (or other'time interval) work program. Pleasereview it carefully. Tomorrow, we will have a discussion about these tasks. Youwill have to tell me three things: (i) Do you agree that this is the best way to achievethe outputs that I expect from you on the due date? If not, make suggestions forimprovement; (ii) Do you believe you can implement every one of these tasks withno difficulty of any kind? If not, propose suggestions or tell me whether you cannotexecute some or all of these tasks; (iii) after accepting them, with or withoutmodifications that might result from your answers to the two previous questions, Doyou understand that you will be accountable for the results, and professionallyevaluated against them."

'9Se Note (b) page 18.

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(d) after the discussion betweenr managers and every staff member to whom they assignwork programs, the implementers will understand better what is expected of them;they will have been given a chance to reflect on their own programs and formulatecomments; some changes may occur as a result of their comments; and the staffshould feel more confident, i.e., that they are trusted, and therefore are likely tobecome more enthusiastic about their work. However, if they fund it difficult toperform up to expectations due to skill gaps, they may discuss this with theirsupervisors and obtain a tailor-made training program to acquire or improve thenecessary skills. All this must be made explicit by the supervisor while conductingthe interview with staff;

(e) once everything is clear and agreed, the supervisor should add:

'Every two weeks, you will make a copy of your task form and fill in theinformation required in the last two columns, which relate to the monitoring of yourwork. What I need from you is the following information for every task, withiin theagreed period of time (e.g., previous 15 days) (i) Did you do the work as describedin the task description column? (ii) If so and the task output is now available asdescribed by the due date, check the left subcolumn of the monitoring column; (iii)If not, enter into the observation sub-column the following information:

-in what way is the task different from what was initially planned anddescribed on your task form?

-why was it different?

-what do you suggest doing about these differences? Should I accept thesedifferences as more efficient in terms of achieving the correspondingobjectives (Form A7)? Or can I do something to help you redress thesituation created by these differences, which may not be desirable? If so,what should I do? In other words, how do you think that these differencesin achieving particular tasks may threaten project implementation?

(f) Such an approach will certainly increase, at the same time, awareness of theimportance of the work of the task implementer, and also give him(her) more

"Remember the first two digits of a task code refer to the corresponding objective this task is supposed to achievc.

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opportunities to think and propose improvements, in addition to enhancingaccountability mechanisms; he/she should be made aware of this process from theoutset of any work program implementation.

84. Personnel Department Viewpoint. Whenever supervisors have detected skill gaps duringdiscussion of the individual task form, as described above in (c), (d), and (e), he/she immediatelyprepares an individual Form Dv71 so the particular staff member can describe as fully as possible theexact skill gaps, as assessed by both of them, against every relevant task. These individual FormsC and Dv are then passed to the Personnel Department chief for action. This action can include asimple training activity to provide the particular staff member with the information, knowledge,and/or practical skills that are missing to implement his/her work program; or the correspondingtasks can be given to other implementers when a training activity would take too long to yield anyeffect when compared to the date by which the task output should be obtained. Or a consultant couldbe hired for a short period of time just to implement a task that no one else in the entity can performadequately9. Finally, individual Forms C are used for performance evaluation yearly, or at agreedintervals. Since these forms must include the total responsibilities and tasks of any given staffmember, including managers, it is easy to use them for reviewing performance as well as for thenext work program cycle'. Therefore, ICADS used as a personnel management tool actuallyoffers an integrated approach to personnel management, including professional/technical aspects andadministrative aspects. Thus, it is a tool that is helpful in selecting appropriate staff, and devisingsubsequent performance evaluation, including organization and work programming.

ICADS as a Work Pro2ramminB and Monitoring Tool

85. As described above, Form C and the IERMap should provide a detailed description of thework to be done to achieve given development objectives, and how the govermnent will becomeinstitutionally organized to inplement the work efficiently. In fact, increasingly Bank-assistedprojects now include an annual work program (POA74 ), which is an ICADS-generated programming

71see cxample page 91.

72when Form Dv includes -1r mtings, that is when it has been identiried that there ar vacant positions in the entity, theChief of the Personnel Depastment should use the professional profile described in the 'description of skill gaps"-column of thisForm, to start the identification and sokection process. While selecting candidates individual Forms C for the correspondingpositions can aso be used very efficicntly for both the selection process and for assigning the work program to the new staffmember, including assessment of his(her) skills and possible need for training.

7'See Attachment 3 for a different approach to staff/managers perfonnance "objective' evaluation, also based on ICADSprinciples.

74From its Spanish and Poitugucsc meaning: Programa Operativo Anual, that is Annual Operational Prgram.

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and monitoring tool. Indeed, the sequence of tasks describing what to do to acquire goods andservices fmanced out of project proceeds, how to use them efficiently, and how to ensuresustainability of benefits obtained (including individual'benefits, as described above para 81-83), areinstruments that can be used for the presentation of a thorough description to managers, politicaldecision-makers, or to financing source administrations of what is going to be accomplished with theresources spent in the most cost-effective manner. POAs, done annually by definition75, areextremely useful to: (a) agree on detailed work programs before the financing is actually disbursed;(b) review the previous year's performance before the next cycle of programs can be accepted; and(c) help monitor progress if the individual Form Cs are used as described above and consolidatedat the level of every implementing entity thereafter, before being commnunicated to all interestedparties. The disaggregation of tasks by year has made it easier for project implementationmanagement to obtain suggestions for improvement from implementing staff or other interestedpardes in the country. Furdtermore, quite often agreements reached in this manner between WorldBank negotiating teans or supervision missions and project implementation managers have ledspecialists on both sides to agree on possible technical improvement to the way things will be carriedout. This is because, in the POAs, the tasks are thoroughly described, instead of using the limitedinvestnent information generally included in more traditional annual work programs.

86. Finally, the POA can be used as a monitoring tool just as individual Forms Cs are used forindividual performance reviews, as described above. No ottier monitoring tool or device is necessarywhen ICADS has been developed as described in Section I and the corresponding informationtranslated into more detailed annual tasks in the POAs-including specific measurable performanceindicators. Some modifications to ICADS (as described in Section I) should be made to enhance theefficiency of the POA as a programming and monitoring tool. Form A, for instance, should beslightly modified to include information on the specific year in question in confrontation with boththe overall project objective (generally a five-year objective) and what has been achieved thus far.Therefore, Form A on the first page should include the information shown in the example on page92. The other pages of the POA Form A should list the component objectives just as in thedescription of this Form on page 8. However, as the corresponding information will describe whatis intended to happen during a single year, it should be more precise and realistic. Indeed, both thequantitative indicators (targets) and the expected impacts should provide measurable outputs and helpevaluate the year's performance in implementing the project. The same applies to Form B in POAs.It should include a description of the activities and resources to be made available during the yearto enable implementing entities to achieve the yearly objectives. No change in the format of FormB in requiredl compared to what is shown on page 13. Finally, Form C should also have the sameformat as shown on page 17 (the sequential version), except that now tasks should be individual and

75However, other time periods can be used.

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not aggregated, and involve several implementers. That means that the disaggregation should helpdescribe exactly what every individual will do.76

IC-ADS as an Evaluation Tool

87. The combination of the information in Forms A, B and C can be used for any evaluationwork. First, at any time during project implementation, or at the end, one can use the performanceindicators and information included in the "Quantitative Indicators" and "Expected Impacts" of FormA, as well as the "Task Output" column of Form C, to organize and carry out the evaluation work.Indeed, globally, for the entire duration of the project life, and/or annually, using the POAinstrument (see para. 85), it is possible to see what was supposed to be achieved, how it wasachieved, as well as the current outputs. When these are not up to the standards set (which shouldbe indicated on Form A), one can refer to Form C used as a monitoring tool (see para. 84) tounderstand exactly what in the process caused the differences or failures to occur. Taskimplementers' recommendations about the differences found can also be important sources ofinformation about understanding what happened and why. Furthernore, the infonnation on activitiesand resources (Form B) can help determine afterwards whether the resources were sufficient whencompared to ambitions, and whether they were actually mobilized and spent. Form C providesinformation about whether the money available has been well spent. Therefore, from both thesubstantive and financial viewpoints, Forms A, B and C facilitate carrying out a typical evaluationwork with no additional tools. However, it is important to stress that the quality of the evaluationwork depends essentially on the quality of the information included on these forms. Therefore, itis of the utmost importance to have decision-makers, as well as the specialists who advise them,exercise care when defining their expected inpacts and task outputs. In fact, throughout thisManual, we have emphasized the importance of obtaining quality, accurate information, at every stepof the ICADS process. Indeed, the quality of ICA (that identifies and formulates the problems) andof PSIDC (that offers possible solutions) really depends on how much and how clearlydecisionmakers and their advisers understand what they are doing. An important element andcondition of IC in itself.

'min this respect,ICADS, through its POA feature, is able to help comply with Mr. Preston's exhortation about thc need forhelping imnprove implementation: 'Successful implementation of Bank-financed operations far outweighs new commnitments asthe principal indicator of the Bank's development effectiveness, the Bankl's capacity to daw lessons from ongoing and completedopcmtions, and the expeditious integration of this knowledge into the design of country assistance strategies and new operations'(Lewis T. Preston, February 5, 1992).

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ICADS as an Overall Risk Assessment and Management Tool

88. All the above uses of ICADS combined make it a useful device to assess risks and managethem in such a way as to clear the way, the institutional way in the broader sense, for achievingdevelopment objectives in the most cost-effective manner. Indeed, ICADS requirements to makeexplicit, in a disaggregated way, what decision-makers want to achieve, and how this is going to bedone in practice, in addition to the systematic review of capacity gaps allow for not only identifyingpotential risks, but also determining what to do to eliminate or nitigate them. The concepts of kanalysis and risk mang mn are good proxies for all that ICADS can do to encourage developmentactivities in general, and for the development of the institutional capacity of the public sector, inparticular. However, to enable ICADS to provide an integrated contribution, it should be managedby a designated function, responsible for it, from all viewpoints. This is the institutionaldevelopment function, explained below.

The Insttutional Development Function (IDF)

89. This Manual has made it clear how important it is for any level of entiy to constantlymonitor IC and address ICGs as they are detected, without which the work program and the pursuedobjectives will be in vain, or obtained at much higher costs-both social and financial. Theresponsibilities that stem from ICADS principles and actual implementation, should be locatedsomehere in the entity. It must be seen as a management function as it has to do with the verydecision-making process and the improvement of the decisions made as prograrns are implemented.The Institutional Develooment Function is in fact the responsibility of a high-level organizationspecialist who should act (confidentially when necessary) on behalf of the general manager of theentity. He (she) should work as an "observation post' constantly monitoring the external and internalinstitutional context in which work programs are implemented, and in which development objectivesare to be achieved. He (she) first must activate ICADS initially for the preparation of ICA and thedesign of PSIDC, in addition to the multipurpose use of this tool mentioned above. Then, therequirement of constantly updating the information included on all ICADS' Forms will lead him (her)to review the institutional environment to detect any other ICG that may have been hidden to theanalyst, or that may arise unexpectedly thereafter. When this happens the available capacity isimmediately reduced. This should be reflected, formulated, and possibly visualized in thecorresponding forms. Almost automatically, he (she) should formulate recommendations to his (her)manager about how to mitigate the forthcoming ICG to save the current work prograrn's objectives,if they are still maintained. The constant updating of ICADS Forms includes, obviously, a relatedadaptation of the tasks and sometimes a new formulation of the objectives themselves.

-_o-

90. lCGs that may occur at any time during implementation. They may come from externalitieswhere world events transform the current objectives into something obsolete, impossible, or simplynot desirable. The decisionmakers must then reconsider their development strategies and actionprograms and make new decisions. Sometimes, major events may occur within the country itself,leading decisionmakers to question objective and possibly redesign their strategies. ICGs can beinduced by the country institutional context, sometimes dictated by the economic situation (e.g., afreeze in hiring public servants or on public spending), or social disturbances (e.g. public serviceprice increases or a general tax increase), or by political interference (e.g., a request for favoritism,for instance the hiring of a politically connected professional who does not have the skills requiredto implement the tasks assigned to the position he (she) is going to capture), and so on. ICADSforms can help minize the negative impacts resulting from such ICGs7. Of course, ICADSForms cannot eliminate ICGs resulting from political interference. But they have proven a very-efficient device for minimizing the impact, because they can increase decisionmakers' awarenessabout the consequence of their decisions when these are exclusively based on political considerationsor on narrow self-interest. ICADS helps activate the "efficiency viewpoint" for every eventuality.

91. In the case of development projects, including identifying financing sources, such as a Bank-assisted project, the specialist holding IDF is, in addition, responsible for the implementation ofPSIDCs or all types of ID action programs. During project implementation, he (she) can beinstitutionally located within the project implementation unit. However, the corresponding function(1DF) should then progressively be shifted to the permanent structure of a ministry, secretariat,public enterprise, or other responsible entity. In summary, any entity or administrative unit with awell-defined role and/or work program to implement to achieve identified development objectivesshould install IDF in its structure. As a management function, IDF would gain in efficiency beingplaced at the highest possible hierarchical level, to give it the maximum leverage, and for it to beunderstood by everyone in the entity as a real management function.

77For instance, in an actual project, after a year of implementation, a senator asked a minister to install a protected,candida in a non-vacant position, for political reasons. The miruster transferred the request to the Project ImplementationUnit's chief. The chief went to se ethe minister with the individual Form C of the staff member holding the position in question.He explained that the current task irnplenenter had been trained for three weeks to be able to implement the particular taskslisted in his Form C, and that he now was fully able to perform the job. He added that he would be hesitant to release theposition unless it could be proven that the newcomer would become immediately able to perform the same tasks, given the duedate of the corresponding task outputs as also shown on Form C. The minister immediately forwarded this information alongwith the corresponding documentation. The senator answered that after having shown these documents to the candidate, he gaveup altogether the idea of joining the Project Implementation Unit.

Count"vDevelomment Activiy

Institutional Camacltv Analvs, and Develonment System

Form Dv: Individual Skill-Related ICo.

Individual Nnam: Position: CateLory (a leter from page 80, the individual C Forn): dministmtive Una:

Task Description of Your Skdll Gaps Skil Gap Severity Action Taken Final OutcomeCode Information Knowledge Know How 2 3 4 5

. _ I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I

_~ ~~~~~~~~~~~~~~~ . _ - ,

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CountrDevelopment Activity

Institutional Capacitv Analysis and Development System

Annual Work ProgramForm A: Objectives (Page 1 of-Pa=es)

Overall Project Objective: Poorest farmers able to use new farming technology transferred to

them through obtaining credit, because they now have a land title that makes them feel secure

(180,000 such farmers)

Already Achieved Thus Far from the Above Global Objective: The target beneficiarypopulation has already been identified; legal aspects of the titling program underway (a

consultant is currently working on this); consultants' terms of reference to design a

computerized system to administer the program, have been designed and are in the process of

being approved by the Minister.

S-cific Obiective to be Achieved by the Current Year End: First 10,000 titles delivered inRegions V, VII, and VIII; all legal problems solved; computerized system in place to

program and supervise the land titling process; and system already working for preparing

next year activity and budget

Observations: Detailed component objectives, and measurable performance indicators, including

expected impacts, follow.7

7In the subsequent pages of same Form A.

Institutional Capaitv Analyvsis and Development System (ICADS)OpMrational Manual

Attachment One

Checklist ror the Analyst

ChecklistPage 1 of 4

Institutional Capacity Analysis and Development (ICADS)

Checklist for the Analyst

When analyzing the institutional capacity (IC) of any institutional universe', aiming at designing aninstitutional development (ID) action plan (such as a project-supported ID component), the followingsteps should be followed:

1. help decisionmakers clearly formulate their development objectives at stake (Form A)

2. obtain information on allocated financial resources per category of development input to be

acquired with these funds (Form B) for the achievement of the stated development objectives

3. help describe thoroughly how these funds are going to be used in the form of a list of tasks(Form C), that is, describing who2 is going to;

i. acquire the goods/services for which financial resources have been allocated inaccordance with information included in Form B;

ii. use them efficiently towards achieving development objectives as described in Form A;and

Wii. ensure minimum sustainability of the benefits obtained through using efficiently thecorresponding goods/services.

4. ensure wide circulation of the three forms thus defined so as to obtain comments to beincorporated if accepted by the decisionmakers, and that all parties, directly or indirectlyinvolved or interested in the development benefits or having to suffer from its possible

'Warning: rcad the definition of this concept within the Manual main text: it means, in particular, one or more entities withtheir installed organizational, managerial, physical and financial capacitics, and the institutional enviromnent in which it (they)implement their development program, and/or their mandate: governance, legislation, norms, civil service, distribution of inter-institutional rsponsibilities).

2 This wwho' may refer to entities globally (whm development objcotives are at the macro level of a country economy orat a sectoral level), or to administrative units (specific mandates, or functions, or even circumstantial rok/work program), orto individuals (in parficular, when it is time to distribute work programs for actual implcmentation.

ChecklistPage 2 of 4

negative side-effects, will have been informed and given a chance to participate in the decisionprocess

5. prepare an interinstitutional relationships map showing the exact universe of entities and theiradministrative units in charge of carrying out the work program defuied in Form C, using thefunds described in Form B, to ultimately achieve development objectives set in Form A. Thismap should also mention the precise role of every entity/administrative unit, how therelationships are going to work, and what is the legal or regulatory basis for them to work asdescribed.

6. identify uinformants" per capacity element that is going to be analyzed. Usually this wouldinclude informants in the following areas:

i. governance3, legislation, regulations

ii. interinstitutional relationships

iii. organization and internal distribution of functions

iv. civil service issues and personnel policies in general

v. skills'

7. carry out the institutional capacity analysis (ICA) using Forms Di to Dv, ensuring that theinfornation obtained accurately describes a potential (or actual) problem (institutional capacitygap: '[CG) that is going to affect the execution of a task; in what way it is going to affect theexecution of the final task output; and the severity of the particular ICG identified.

3 However, the sources of information for governance-relatd capacity gaps can be diverse. In particular, when the analystknows that the decisionmakers in govemment are not likely to provide accurate/objective information, or authorize him (her)go and ask membe of the political opposition or to the private sector in general. Most oftcn the analyst must use commonsense and judgmnct, and information gathered in the media to get an idea as to whether the current system of govemance isgoing to affect various parts of the development objectives at stake.

4 Informants to determine the skills are the administmtive unit chiefs for the people working under them; or the individualsthemselves for higher levels of managers or executives or professionals. Finally, informants on the 'beneficiaries' skills shouldbe carefully selected in accordance with specific circumstances (for instance, if the bcneficiaries are part of the rural world, tryto intervivw agriculture extension agents, etc.).

ChecklistPage 3 of 4

8. consolidate the information thus obtained from the viewpoint of nonskilled- related ICGs(Form Ei) and of skilled-related ICG (Form Eii).

9. discuss findings with decisionmakers until they recognize the accuracy of the consolidatedICGs.5

10. propose to and discuss with the decisionmakers a synopsis of possible solutions to theidentified ICGs (Form F) with or without modification the initial development objectives.

11. prepare a working paper where the ID action plan for the elimination or mitigation of theidentified ICGs is thoroughly described. Ideally, such a working paper should have an outlinesinilar to the following example:

i. Background information:

- development objectives(description and rationale)- lack of IC to achieve them (general statement and description of information

included in Forms Ei and Eii)- decision to include an ID action plan to mitigate ICGs, and possibly, at the same

time reduce or somehow modify initial development objectives.'

ii. II) Action Plan:

government decisions, that is activities not requiring any additional efforts inacquiring specific goods/services, but simply specific decisions from theexecutive or the legislative powers, including where and how the correspondingmeasures are to be effectively taken.

-- specialist assistance for those ICGs that require that the entities in charge"import" some kind of "technology' to resolve them.

- atraining activities to eliminate most of the ICGs listed on Form Eii.

S When they do not agree, fuither work is necessafy on the part of the analyst and/or the decisionmaker himself, who mayhave to ducuss matrs directly with the infonmants until an agreed formulation of the corresponding ICGs is reached.

6 Typically, the whole set of forms used during the preparation process can also be used for the preparation of thisbackground section of any ID working paper, either in the form of annmxes or incorporting the most impoint informationitems within the main text, or a combination of both.

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- funding to eliminate ICGs related to physical/financial -capacity.7

iii. Project Management and the ID Function

- project management organization and functions- the )ID Function (IDF) as a management tool for:

* preparing the anmul work prograrn (POA)* distributing the tasks to every individual within a unit* monitoring and periodic evaluation activities* personnel management* IDF for the monitoring of the institutional environment and

updating of the available IC.

iv. ID Action Plan, Detailed Costing and Financing.

7 This may include financing for construction/physical repair, acquisition of equipment or consumable goods, or for thepayment of cesain salaries temporarily, and so on.

Institutional Capaity Analvsis and Development System (aCADS)Operational Manual

Attachment Two

ICADS Set of Blank Forms

Country

D-voeoment ActivityInstitutional Capacity Analysis Dcvelooment Sestem

Form A: DevelopMent Obioctives

General biectivce

xComponent ;- - ,, ,

Development Objective Description Quantitative Indicatos Expected Impacts Beneficiaries/Victims

03

-_; =_

SUSUS 222

_ __ _ _ _ -__ _ _____ __ ._ _ _ _ __I~~~~~~~~~~~~2

SUg00W~~~~~~il

h0FR000~~~~~~~~

i: I a ------

In -T T -

''#g11WI

! A

M,Sg.|==

Countn

Develotment ActivityInstitutional Canacity Analysis and Development Svstem

Form Di: ICGs from the ROG Viewpoint

Task Code Description of ICG and cxDlanation about their nefative imnacts ij 2 3 4t S1 2 3 45

01 01 001

CountryDeveloument Activity

Institutional CaDacity Analvsis and Development System

Forn Dii: ICGs from the HIR Viewvoint

Task Code DescnDtion of ICGs and exDlanation about their ne2ative imgacts 1 2 3 4 S

1 2 3 4 5

01 01 001

m. *-- -- -- =

CountrvDevelorment Activitvy

Institutional Canacity Andysis and Decveloomcnt SYsten

Form Dlii: iCGs from the ORG VieWoint

Task Code Descrirtion of lCOs and exobnations about their ngrative imnnacts ICG Scvcrit12 3 4 5

01 01 001

I _ = = == =

CountnDevelopment Activity

Institutional Capacity Analysis and Development System

Form Div: ICGs from the PPR Viewpoint

Task Code Description of ICGs and Exilanation about thcir negative impacts ICG Severitv

1 2 3 4

01 01 001

0 ___ _ T T T 1~= *

CountryDeveloDmnt ACtivity

Institutional CaDacitV Analysis and Develonment System

Form Dv: Skill-Related ICGs

Task Number and Category of Staff Description of Skill Gaps Skill Gap Severity cCode

A B C D P. F G InftoTnation Knowledge Know-how _ 2 3 4 5

X~… -t= -

01 0 1 002 _ e _ _ _ _ _ _ _ _ _ _ _ _ _

- ----- I ~~~~~~~~J -__F I

CountryDevelopment Activity

Institutional Cavacitv Analysis and Development System

Form Ei: Consolidation of Non-Skll Related ICGs

ICG ICG Description Affected Tasks (Codes) ICG Averagc SeverityCode

1 2 3 4 S

DiOl

etc.

L - m- -

L -- -- - a- - - -SA

_ ___ _ __ _ 2 2 n ~_ =__ _- _ _ _ _ 3 - ir z iF~~

_ _ _ _ _ _ _ _ _ _ a ? _ z 0

~~~~~~~~~~~~ _ . ig'

_- _ _. -* _ s_

Institutional Capacity Analysis and Devdopment SystemFonn F: ID Strateav and Action Plan Synopsis

ICG Code ICG Sub- Institutional Development Slrtaegy and Action PlanCategory

Government Decisions Technical Assistance Training Activities Others

DiOl

- --_

Institutional Capacity Analvsis and Development System (ICADS)Operational Manual

Attachment Three

"Obiective" Performance Evaluation'

'ICADS Form C in its individual version (see Manul, pages 82-86) is normally sufficient to carry saff perfornance evaluation. However,

for higher levels of professionals and for mnagers at all levels, the following mechanism can be used to mach maximum objectivity in assessingperformance. This mechsntsm is slightly different from the one baed on individual Form Cs, but equally inspired by ICADS principles (seepage 3).

ANNUAL INDIVIDUAL PERFORMANCE PLANNING AND EVALUATION CRITERIA MATRIX(Read Manual before filling out)

Annual AssirnmentsA1 a OWN MANAGED TASKS SUPPORT TO CODs & SODs STUDIE IREVIEWS/E W/OTHERSa t Act.Code Act.Name Alloc.}/w Act.Code Act.Name Alloc.s/w Act.Code Act.Name Alloc.s/w

c I

atP

e Total Alloc. staff/weekst Total Alloc. staff/weeks: Total Alloc. staff/weeks:d

Own-Managed Tasks Support to CODs & SODs Studies/Reviews/ESW/OthersCrit ( t )(tCode Criteria Totals

Maximum IPP Ne- Annual MAximum IPP Ne- Annual Maximum IPP Ne- AnnualAllowed gotiated Evaluat. Allowed gotiated Evaluat. Allowed gotiated Evaluat.

A Intellect/Practic. SkillsAA Leadership(Stateoftheart)AB Level in SpecialtyAC Accuracy in Planning ownAD and mission's timingAE Communication skills gen. 1AF English lAG Spanish/Port./French lAH Negotiating skillsAI Support Requ.from Mngt.AJ and from lower level st.AK Sense of organizationAL Problem solver(MainlySPN)AM General Culture

Total Points....... 30

B BehavioralBA Leadership(leading peopl)BB InitiativeBC Risk-Taking,BD Resource Person 0

Total Points.: .......... 20

C Output DeliveryCA QualityCB Innovative/ImaginativeCC VolumeCD TimelyCE Loan AmountCF Project Generator

Total Points ........... 40

D Contribution to LATDA DisseminationDB Sugg.to impr.Div.Chf MngtDC Coaching Bank's staffDD Coaching Borrowers'staffDE Relev.Trg Act. to W.Prog.

Total Pointsn...... 5

E HardshipEA Difficult counterpartsEB Difficult placesEC Field days in excess

Total Points ........... 5

Totals * *................. 100

Observation. Ratings are as it follows:

90 to 100 points - outstanding80 to 89 points - better than satisfactory70 to 79 points - satisfactory60 to 69 points - less than satisfactory

less than 60 points - disappointing

0

ON

ANNUAL INDIVIDUAL PERFORMANCE PLANNING AND EVALUATION CRITERIA MATRIXMANUAL

Introduction

An agreed list of evaluation criteria is necessary to minimize subjectivity which can often be substantial when

evaluating staff performance at any level. The current list must be agreed by all managers and staff in LAT as a matter

of principle. However, it offers flexibility in the ones selected and the weight given to the different criteria as a

result of a work plan discussed between Division Chiefs and individual staff at IPP time. This Manual provides guidelines

to help understand the concepts used and possible procedures to use them operationally.

Procedures

Step One

LAT Management Team fills the "Maximum Allowed' Column of the matrix to decide on what weight should be allowed to

the different criteria in accordance with what should receive the highest priorities during the FY under consideration.

This of course, will depend on LAT's business plan and objectives and possibly to management style.

Step Two

At IPP time, the individual staff prepares a matrix in which he or she will enter first his proposeed work program

in the three upper boxes showing his tasks during the FY to come. This should make it clear what the expected outputs are

for the particular FY.

Step Three

Then he will select evaluation criteria which at this time, must be considered as inputs necessary to produce the

expected outputs. He must be careful in selecting only the criteria that are directly relevant to particular aspects of

his work program. For instance if he is terribly good in French or has a terribly high professional level in his

specialty, these criteria will receive 0 point if he does not need either of these inputs to perform his tasks.

Step Four

He will then weight the selected criteria in such a way to make it transparent what he thinks to be the order of

importance of these inputs to produce the expected outputs on an effective and timely manner.

Step Five

He now can discuss the content of the draft matrix and negotiate with his superior in line to reach a final

agreement on the work program itself, the selected criteria and respective weighing. His superior will pay particular

attention to the relevance-to-the-work-program of the selected criteria. OS

Step Six

Whenever there is need to change any aspect of the work program a revised matrix should be prepared and discussedanew with the superior in line. Updates may be necessary and should be allowed more than once during the particular FY.

Step Seven

At AE time, the indivudual staff member fills the last, updated versioni of his matrix showing what he thinks hisperformance has been against every criterion for which there has been an entry at IPP time. He also prepares a short memoor note to elaborate on the reasons for his ratings and to explain any substantial differences with what had beenplanned. AE Review form (Form ) is filled at this time and the matrix will be atached to it. The whole package issent to his supervisor in line in accordance with Departmental deadlines.

Step Eight

Supervisor in line sets up a meeting and discuss with the individual staff member performance in general and theratings in particular. An agreement must be achieved so as to allow for a final version of the matrix to be prepared. Ifno agreement is reached (which should be bad for both the individual staff member and his supervisor...), the Director orsupervisor in line's boss should designate any other LAT Division Chief to review the case and present his conclusions tothe Director who will then, make a final decision..

0

Concepts (Alphabetical Order)

CONCEPTS Code DEFINITIONS/OBSERVATIONS

ACCURACY IN OWN PLANNING AC At IPP time, staff member has planned un given number of staff weeks for himself. Hashe been accurate7 At AE time, this should be rated '0I if there has been a substan-tial difference, even if this has been explained (Weight here should be low)

ACCURACY IN MISSION TIMING AD Same as above but relating to other staff members' or consultants'work(Weight higher)

COACHING BANK'S STAFF DC Frequency and quality of support provided to colleagues in processing their own tasks

COACHING BORROWER'S STAFF DD Same as above but for Borrowers' staff. Assess effectiveness and quality of outputs

COMMUNICATION SKILLSsGENERAL AE Easiness and clarity in expressing thoughts and conveying messages

COMMUNICATIONs ENGLISH A? Does he need support to write reports, memos?...Does he speak fluently?

COMMUNICATIONtSPAN.PORT.FRE. AG Both oral and writing skills must be assessed, but only in so far as they are clearlyrelevant to the particular part of the work program against which they are rated

DIFFICULT COUNTERPARTS EA Points should be awarded to staff having dealt with well-known difficult counterparts

DIFFICULT PLACES EB Points should be awarded to staff having worked in difficult places to implementtheir work program

DISSEMINATION DA Since this is an important element of LAT Functions, staff having contributed to dis-seminate new ideas, processes, etc. of their own production or not, should be awardedpoints. This should not apply only to those carrying out research, reviews or ESWtasks

FIELD DAYS IN EXCESS EC When work programs demand long missions and/or a total number of days out during theFY under consideration, points should be awarded

GENERAL CULTURE AM Ability to put issues in perspective. Can be versatile and handle very different task

INITIATIVE BB Staff consistently take initiatives in conducting his work program instead of constantly taking problems to his supervisor in line's consideration for solution. This '

also applies to situations in the field

INNOVATIVE/IMAGINATIVE CB This is when staff deliveredtheir expected outputs with important elements of innova- '

tion in so far as these increase quality and efficiency of the particular outputs

LEADERSHIP (LEADING PEOPLE) BA Self-explanatory. What should be assessed is the relevance of efficiently leadingmissions (for instance) to the achievement of the particular work program

LEADERSHIP(STATE OF THE ART) AA Relates to intellectual leadership. as measured through well-established recognition

LEVEL IN SPECIALTY AB Rather than whether the individual staff member holds a PhD or uses to publish a lot,what should be assessed here is the usefulness of his specialty in delivering theexpected outputs that particular FY

LOAN AMOUNT CE Staff handling responsibilities for larger loan amounts can be grantes special points

NEGOTIATING SKILLS AH Has demonstrated particularly helpful skills in difficult negotiations in the Bank orin the field which resulted in facilitating following steps. He is a problem solver

PROBLEK SOLVER AI Uses to handle issues of any kind with apparent ease. Recognized as facilitator whilein mission work

PROJECT GENERATOR CF When staff are able to see project opportunity while processing or supervising projec

QUALITY OF OUTPUT CA Did not need guidance or support to deliver outputs that would be difficult or impos-sible to improve

RELEVANCE OF OWN TRAINING DE Can demonstrate that the substance of his won training was a key factor in his perfor

RESOURCE PERSON BD Uses to help others in Division or in LAT in general. Known to be ready to provideinformation to CODs' and SOD's staff in general, upon request

RISK-TAKING BC Not afraid to undertake difficult tasks although outcome is uncertain

SUGGESTIONS TO IMPROVE SUPE- DB During the IPP exercise, Division Chiefs should encourage individual staff members toRIOR IN LINE'S OWN PERFOR- formulate suggestions so as to make it clear how they would consider their boss couldMANCE improve his management and how this would have a positive impact on their own perfor-

mance for the timely delivery of the expected outputs

SUPPORT REQUIRED FROM MANAGE AI Points should be awarded when quality and timely outputs have been delivered withoutMENT support from management

SUPPORT REQUIRED FROM LOWER AJ Points can be awarded when there has been no need for extraordinary secretaries'LEVEL STAFF (or else) additional support

TIMELY _ CD No delays as compared with timetable deadlines. Generally considered as fast worker a

VOLUME CC Ability to produce more than usual amount of outputs

Other Reports in the Seres

No. 1 Governance: Experience in Latin America and the Caribbean, March 29, 1991

No. 2: State-Owned Enterprise Reform in Latin America, July 25, 1991

No. 3: Systeme D' Analyse De Capacite Institutionnelle Pour L' Ajustment Structurel,December 26, 1991

No. 4: A Preliminary Analysis of the Bank's Approach to Core Ministry Restructuringwith a Focus on LAC Activities, February 25, 1992

No. 5: Computeization of Core Financial Systems in Government, April 15, 1992

No. 6: Civil Service Reform in Latin America Lessons from Experience, May 1, 1992

No. 7: Institutional Development in the Latin America and Caribbean Region: Lssonsof Experience and Recommendations for Improvement, June 23, 1992

No. 8: Performance Measurement in the Public Sector, July 9, 1992