The Factors affecting the Projects Performance

The Independent Evaluation Group reported on the factors affecting the performance of the World Bank Group Projects and grouped the related issues into three broad categories: two at macro level (country level & political economy ) and one at micro (Project preparation & supervision); there isn’t any doubt about the importance of the listed elements that determine whether the success or the failure of the intervention: https://ieg.worldbankgroup.org/evaluations/rap2017.

However, there is a preliminary question that in our view should be answered: A successful Project for who? There are different Actors around a project: Stakeholders, Governments, Communities whose objectives, interests, expectations aren’t necessarily the same and therefore there is a continuing negotiation to reach a common agreement. The below Figure visualised the role played by them (Figure is taken from FINANCIAL INCLUSION – Give people a job, not a loan https://itunes.apple.com/us/book/id1116912686).

Picture 11

Assuming that a Project should serve the Community, there is a wide consensus on the core business of whatsoever intervention: sustainability for the providers, affordability for the beneficiaries, transparency of the interventions along with a tangible impact on the related communities. In the field reality, a compromise is a necessary step to make it the Project running and it isn’t rarely the fact that the objectives of a Stakeholder are prevailing to detriment of the others, and this factor is well-known to the Project Managers.

In our assignments we tried to apply the “Behaviour of the Actors”, which  is a very important element that affects the Project’s performance and can be synthesized as follows:

–      Lending partners’negative response and/or insufficient interest in managing the change,

–      Donors’unsuitable intervention and late reaction to emerging & changing conditions

–      Government’sweak commitment to providing an enabling environment

–      Management Unit’lack of expertise to reconcile interests, objectives, demand and expectations of the actors along with management practice not always equal to the task

–      Borrowers’unviable requests for loans, bad repayment.

The holistic approach related to three inter-related levels:

–      Enabling environment

–      Organisational level

–      Individual level

The enabling environment does affect the behaviour of the organisations through the incentives it creates. Every businessman faced the challenging to carry out any activities in an environment that, as a matter of fact, has disincentives. In this respect it is well-known that an incentive system helps and promote initiatives; this is why it is important to create a more enabling environment.

The organisational level again influences the organisation. To make it really happen the organisations of the institutions have to understand the market they want to serve.  Accordingly, this shall be reflected in the tasks and responsibilities of the staff, namely the job descriptions.

The individual level deals with the individual capabilities and competencies of the staff and, accordingly, the training component has a special role to play.

Moreover, there is a Fourth Factor to make it a successful Project, namely the experience and expertise of the Team in charge to run the field operations on the grounds that they have to find out a welding point to get a shared consensus among the Actors. This does mean that the Project Leader should have experience and expertise in the Project related matters well above the ground.

Taking from our field experience in the related issues – in Project Evaluation – Impact assessment Supervision – Governance – in Netherlands Antilles, Cameroon, Mali, Caribbean, Kosovo, Guinea-Conakry, Azerbaijan, Malawi, Bosnia, Montenegro, West Indies, Niger, Algeria and Morocco (2), we spent most of our time talking to each one and every Actor either directly involved in the Project or external influential persons. This was a very useful approach to understand the reasons behind the management’s decisions.

We do recall cases on the matter: in Malawi (1994) and Uzbekistan (1996) for Projects sponsored by, respectively, by the WB Group and UNDP/FAO. There was a lot of discussions on interest rate level to apply to the Project’s Beneficiaries, sustainability being at stake; eventually, we proposed to have the Inflation Factor published by the Central Bank as a reference in point, which was appreciated by the GVT Authorities and accepted by the other Stakeholders despite its level didn’t completely protect against the probable credit risk.

• Talking about project management could be an endless conversation, so many are the cases to report and put under the spotlight as a lesson to learn. However, there are a number of situations that can be grouped under a common denominator, namely the behaviour of the sponsors/funding agencies, whatever it is either a government or a donor or a development agency. The way these Entities “guide” the field operations does make it the difference and influences the Project’s performance. This is a well-known factor to the Managers/Evaluators and indeed the Entities work out the mandate providing the objectives to achieve, but difficult to attain because of ambitious goals for the lack of a receptive environment, GVT economic policy not in line with the forecasted increase employment, cut poverty, etc. 
Besides, there are the field’s changing aspects, which the mandate can’t determine a priori, but they can be overcome with a smart management.
Indeed, aren’t infrequent the cases where the Managers/Evaluators have been more or less openly told “we don’t think that the Sponsor will agree on that” or “The Sponsor will allow to do it because of unwritten rules”. 
Having said that, let’s talk about business or the influence of the environment on the Projects, namely the rules of the project game. We will do it with particular reference to microfinance, which has dominated the last century’s field activities in the developing economies as a way to alleviate poverty. 

The game’s rules have been depicted in the above Figure: bringing together the Project’s Actors who although have the same objective, namely to make it happens the field activities having in mind the stated goals, in practice it isn’t easy to resolve the equation of conflicting interests like outreach and sustainability and so on.

• Going through the field activities carried out by the microfinanciers, the probability to default will be directly proportioned to the spread between outreach either horizontal (number of clients reached) or vertical (services provided) and sustainability: higher is the spread, highest is the probability of non-repayment. This does mean that the credit providers should be well aware of what they are doing and therefore the expected project failure/success can be predicted. It should be noted that the micro finance’s decision makers haven’t yet updated the way of doing business in line with SDGs and most likely in the battlefield, there are two armies guided by the cultural legacy and the cultural supremacy, respectively, belonging by Financiers and Technologists.

Autore: graziosiascanio

I am doctor in Economics. I am based in London (+44 7943286549) and Rome (+39 3273211887). I do have a banking background and specialization in Microfinance, Project Management-Monitoring-Evaluation, Risk Fund. I have accumulated more than 30 years of experience in 28 Countries and collaborated with the major international development organizations such as World Bank Group, Ministry of Foreign Affairs-Italian Co-operation, European Union, Danish Cooperation, FAO, UNDP and Others in East Europe, Caribbean, Central Asia and Africa.
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