Our recently published Results and Performance of the World Bank Group 2023 (RAP) is the first annual review with a substantial number of projects that were implemented during the COVID-19 lockdown.
No surprise: The pandemic took center stage
Unsurprisingly, the pandemic featured prominently in our analysis of 459 World Bank Group projects. The COVID-19 pandemic was the most salient challenge for project implementation across the Bank Group during fiscal years (FY) 2020 to 2022.
In the case of the World Bank, we found that 212 out of 273, or 78% of the projects we analyzed reported having experienced challenges in implementation that were caused directly by the pandemic (Fig. 1).
Coronavirus-related lockdowns and mobility restrictions led to economic downturns and disruptions in public services and institutional operations. Most projects reported implementation delays caused by supply chain shortages and other logistical challenges that had a particular impact on projects involving civil works. The pandemic also led to the postponement of in-person activities, such as meeting with government counterparts or other project stakeholders and, in some cases, the reallocation of project funds (Fig. 2).
The RAP 2023 cohort faced some heightened challenges that were not directly related to the pandemic. These challenges, that were not particular to or directly attributable to COVID-19, seemed to be exacerbated for the cohort of projects we analyzed in the RAP 2023 as compared with previous years.
Fig. 1. Factors affecting project implementation: A comparative analysis
Fig. 2. Impact of COVID-19 pandemic on project implementation
In the Bank Group’s private sector arm, lockdowns, supply chain disruptions, asset quality issues, and economic slowdown caused by COVID-19 affected the implementation and performance of International Finance Corporation (IFC) investment projects. The lockdowns particularly affected investment projects in the real sector, shutting down or limiting the operations of hotels, hospitals, transportation companies, manufacturing facilities, and tertiary education providers. In addition to the lockdowns, the overall economic downturn also led to reduced demand for products and services in most sectors and for most IFC clients. The RAP cohort was also affected more negatively by country- and market-related factors than the prepandemic cohort (Fig. 3).
Fig. 3. Factors affecting IFC investment project performance: The Prepandemic cohort compared with the RAP 2023 cohort
For the Multilateral Investment Guarantee Agency (MIGA), the World Bank agency that insures against political risk, the COVID-19 crisis exposed its guarantee projects to unforeseen implementation challenges. Since lockdowns reduced the demand from consumers for public transportation and fuel products, they also diminished the demand for a few of MIGA’s infrastructure guarantee projects. Hospital projects in the Agribusiness and General Services sector also experienced reduced demand for health care services considered nonessential during the pandemic.
Resilience amid challenges
Remarkably, despite the manifold challenges, we found that overall, the RAP 2023 cohort of World Bank projects outperformed their prepandemic counterparts across all project ratings (Fig. 4).
Fig. 4. World Bank Project Ratings: The Prepandemic Cohort Compared with the RAP 2023 Cohort
How did they do it? Our report offers insights
Adaptation and course correction: Timely adjustments proved instrumental in steering World Bank projects through unforeseen challenges. Improved monitoring and evaluation (M&E) frameworks helped projects make course corrections in a timely manner. In fact, we found that projects that made course corrections earlier in the project cycle were likelier to achieve their development objectives than projects that adapted later. In addition, the M&E frameworks also helped provide evidence on the achievement of project objectives and targets and proved to be tools of adaptation and learning as much as of accountability.
For IFC and MIGA, there were no formal procedures for modifying the projects’ development objectives and targets to adapt to changing market conditions after the approval by the World Bank Boards of Executive Directors. However, the private sector responded quickly to the changing economic conditions, and showed resilience, adaptability, and flexibility. Capable sponsors with strong technical expertise helped projects adapt to the challenging circ*mstances created by the pandemic.
Improved monitoring and evaluation quality: Robust M&E frameworks equip teams with a deep understanding of project challenges, allowing them to address weaknesses, and make timely course corrections. In addition, the M&E frameworks also helped provide sufficient evidence on the achievement of project objectives and targets, proving to be tools of adaptation and learning as much as of accountability.
Limited exposure time to COVID-19: Many projects were well into implementation when the pandemic hit, limiting the severity of their exposure (Fig. 5).
Fig 5. Average exposure time of World Bank Group projects in the RAP 2023 cohort to COVID-19 pandemic
Sample selection bias: RAP 2023 might be leaning toward the winners. World Bank projects completing Implementation Completion and Results Reports (self-evaluations) and Implementation Completion and Results Report Reviews (IEG’s validations) shortly after closure tend to have higher ratings. This pattern also applies to RAP cohorts in the past. Also, the IFC cohort did not include investment projects that were severely affected by the pandemic, as assessed by IFC at the time of sampling—IEG agreed that IFC could defer the project evaluations for these projects. For MIGA, there were a few delays in the delivery of some MIGA self-evaluations that limited the number of guarantee projects analyzed in the RAP cohort.
A key lesson from RAP 2023
We highlight the valuable opportunity that the World Bank has in scaling up project monitoring, adaptation, and restructuring more generally beyond crisis scenarios. This will help maximize the resilience and performance of World Bank projects.
Not a full picture yet
The RAP 2023 provides emerging evidence on the pandemic’s impact, but given limited exposure and sample selection bias, it’s not the complete picture. Future RAP cohorts will likely offer a fuller, more accurate picture of the effects of the pandemic on projects across the Bank Group.
Stay tuned for the next blog as we uncover more insights from the RAP 2023!
