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hindering the country's development. For instance, there was no ranking of the weaknesses that would have made it possible to prioritize and delimit the scope of the Bank's work in the country, thereby ensuring a higher return on investment. 2.7
Furthermore, partly as a consequence of the strategy’s space constraints, the description of weaknesses proved more a list of symptoms than an analysis of underlying causes. This is important, because attending to symptoms generally requires specific actions for each one, whereas tackling the causes may involve addressing more than one area in a single intervention or may necessitate policy changes. What is more, acting on the causes can increase the likelihood of achieving sustainable outcomes.17
2.8
The programming of operations was consistent with the weaknesses mentioned in the strategy and identified the actions to be undertaken in most cases. The fact that 50% of programmed projects were not approved (figures similar to the Bank average) might indicate that the strategy should have prioritized the sectors and areas that were strategically best suited for Bank intervention. This is mitigated, however, by the fact that most of the projects that were approved but not programmed maintain the intervention rationale established in the programming exercise, which suggests that, even with flexibility, the programmed lines of action were preserved.
2.9
Although the objectives of the strategy coincided with those of the government, there is no explicit integration between the activities programmed by the Bank and those of the country, and almost no mention whatsoever of Peru's resource allocation and planning systems, or of the government's evaluation and monitoring systems (or the possibility of strengthening them).
2.10
In terms of the use of the Bank’s toolkit, the strategy anticipated the country's financing needs and provided for the possibility of approving fast-disbursing resources to support the reform process. The approval of sector loans was tied to programming in terms of specific projects (the three programmed for the baseline scenario, and two that were not programmed, were approved), and to the general programming rationale. This notwithstanding, there was no exhaustive analysis of the sequence and priority of the reforms, nor a sound institutional analysis on which to base the reforms to be supported by this type of loan.18 In addition, the large
17
For example, in the case of modernization of the State, it was found that there was a “high degree of institutional disorder, as seen in the fragmentation of agencies, entities, and programs.” While this disorder does affect the country's development, dealing with it requires fully identifying the causes that have generated it. If the causes of disorder are merely low technical capacity and scarce resources, the recommended action will be different than if there are underlying political reasons and incentives, on which a mere disbursement of funds could have no impact.
18
A similar concern is reflected in the midterm strategy evaluation report, which recommends that the issue be discussed explicitly in the new strategy and that, as part thereof, a series of issues for programmatic and/or policy-based loans be prepared, to support an ambitious but realistic reform agenda that will be leveraged through those loans.