2.23
IDB has historically taken a relatively benign or low-profile approach to PSDrelated policy reform. Rarely has the Bank pressed for an improved regulatory environment for the private sector in infrastructure, even when such an initiative would attract investment, thereby freeing resources for the production of public goods such as preventive health care or primary education. In underusing its abilities to interface with and influence public sector institutions engaged in defining the policy regime within which the private sector operates (the “business environment”), IDB has missed opportunities to make its PSOs more effective. In addition, the evidence from the analysis of a sample of projects indicates that operations with coordinated SG and NSG activities and integrated objectives are relatively rare (see Box 6). Box 6. Level of coordination among IDB windows pursuing PSD
OVE looked for evidence of “attempts at coordination” during project design in two forms: (i) a member of another window was part of the project team (“Team” in table below);a and/or (ii) the project loan proposal mentioned one or more operations, undertaken by other windows, that preceded or complemented it (“Reference”). A low proportion of sampled projects met these criteria in PSD and PSO operations related to SMEs and financial markets. Coordination by window between 2008 and 2012 SMEs Financial Markets Team Reference Both None Team Reference Both 8% 33% 4% 73% 5% 20% 3%
SCF
None 54%
Total 100%
IFD
75%
6%
13%
6%
76%
10%
10%
3%
100%
OMJ
27%
60%
0%
13%
30%
60%
0%
10%
100%
Total
53%
22%
18%
7%
68%
14%
14%
4%
100%
Seven percent of PSD and PSO projects that support SMEs both included team members and mentioned projects of other windows in the loan document. OMJ met the coordination criteria more often (13%), followed by IFD (6%) and SCF (4%). Financial markets projects had a lower level of coordination, with 4% meeting both criteria—3% in OMJ and 3% in IFD and SCF. OVE’s analysis found evidence of coordination only in projects approved in 2008 and 2009, suggesting a decrease in the degree of coordination since 2010. SCF presents a particular decline from 13% in 2008 to 0% in 2011(see Table 11 in Annex B). _______________________ a The percentage of joint project teams (VPS and VPP) was one of the indicators suggested by Management to track progress regarding to “exploit synergies between PSD and PSO” in the action area of “enhanced coordination within the IDB”. See “Summary Private Sector Strategy 2011-2020, Table III, page 18, GN-2518-12.
2.24
Private sector operations have also been relatively autonomous in the Bank’s programming process and have not generally been meaningfully included in country programming documents. This IDB Group-wide view has led to a lowlevel equilibrium trap: the public sector programs its lending operations without focusing on constraints that limit private sector response, while the NSG side of the Bank responds not by structuring demand to match the supply-side efforts but by searching for clients on an ad-hoc basis, often irrespective of supply-side 16