International Reconstruction Fund Facility for Iraq (IRFFI) Stocktaking Review

1. International Reconstruction Fund Facility for Iraq (IRFFI) • Stocktaking Review • Presentation of Main Findings Donor Committee Meeting

2. Objectives of the Review Independent assessment to determine whether: IRFFI projects on track to achieve results Implemented in efficient & effective manner Providing value for money Effective mechanism Iraqi  donor dialogue Compare UNDG ITF and World Bank ITF Identify lessons learned Donor Committee Meeting 1

3. Methodology Donor Committee Meeting • Selection of projects; document review; interviews with UN, World Bank, donors and Iraqi Officials at various stages • Field work conducted by Iraqi consultants/ academics on sub-contract with Scanteam • Presentation of initial findings at 7th Donor Committee Meeting, Baghdad June 2008 • Circulation of drafts and finalisation of report • Main Report + Project Annexes Volume 2

4. Main Findings Donor Committee Meeting • Important point of engagement donors and Iraq • Rapid and effective mobilization of funding and political support • Most projects showed progress towards objectives and meaningful impact on lives of beneficiaries • Some projects strengthening GOI capacity, policy • No evidence of systematic corruption. Best practice for transparency • Accomplishments realized under extreme security conditions, unprecedented for an MDTF • Negative perceptions dominate/reporting 3

5. Project Findings: Overview Donor Committee Meeting 4

6. Efficiency: UNDG ITF Donor Committee Meeting • Technical quality of project design and planning uneven, improving over time • Value-added of Clusters to project design unclear • “Remote” management systems of varying quality, better with time; all projects used DEX • Monitoring systems at project-level: uneven quality • Individual project reporting: uneven, narrative • Average implementation delay 130%, affected by both conditions and agency management 5

7. Efficiency: World Bank ITF Donor Committee Meeting • Technical quality of Project Document good to robust • Quality of project planning good • Project management structures good (PMU, WB supervision); implementation difficulties in GOI • Project monitoring systems robust; independent monitoring agent • Quality of project reporting good • Average implementation delay 70% 6

8. Effectiveness: UNDG ITF-1 Donor Committee Meeting • High activity levels despite poor field conditions: 141 projects, USD 850 million disbursed • Most projects delivered tangible and quality goods and services to beneficiaries • Evidence of strengthening system/capacity and policy • Effectiveness undermined by implementation delays, mixed counterpart performance, reductions in scope and sustainability problems • Relevance uneven. ISRB not able to play robust priority setting/coordinating role to strengthen relevance with DEX modality 7

9. Effectiveness: UNDG ITF-2 Donor Committee Meeting • Portfolio had broad scope. In portfolio reviewed, three project types: • Two Quick Impact projects experienced significant delays. • Six short‐term “gap filling” or emergency service delivery projects contributed to basic service delivery • Five medium‐term recovery‐oriented projects delivered services, with stronger capacity development/policy focus • Limited “quick impact” effectiveness. Stronger outcomes with recovery-oriented projects. 8

10. Effectiveness: World Bank ITF Donor Committee Meeting • Delivered tangible goods of high quality and valued by beneficiaries • Important contribution to strengthening capacity of Iraqi institutions and systems • Single project type: support to Iraqi ministries for implementation of medium term recovery projects • Effectiveness eroded by implementation delays and changes in project scope, often related to situation inside of counterpart Ministries 9

11. IRFFI National Ownership Donor Committee Meeting • UNDG ITF meets all technical requirements of ownership, strengthening over time with changes to the decision-making process • Quality of ownership affected by capacity of GOI systems and UNDG ITF implementation pressure • Negative perception of ownership by some in GOI • WB ITF projects fully owned by GOI 10

12. IRFFI Performance: Overview Donor Committee Meeting • IRFFI: system linking ownership (recovery priorities), strategic direction and oversight, coordination, and implementation into an integrated system with broad implementation capacity, supported by significant financial and political resources. • Performance of individual projects influenced by performance of overall system 11

13. Performance: Start-up Phase Donor Committee Meeting • Significant achievements during start-up phase: • Effective and rapid mechanism for mobilizing broad-based international support for recovery • Two Facilities established and operational in timely manner, with high activity levels during early operational period • Broad scope of operations for addressing recovery issues • IRFFI delivers important political good: participation and inclusiveness in polarized situation 12

14. Operational Phase Donor Committee Meeting • Deteriorating conditions 2004-2007/8, with inaccurate assumptions and expectations • Increased risk, complexity. Administrators adjust systems, but objectives, strategy and expectations remain same. • GOI unable to fully exercise ownership of IRFFI • DC did not provide adequate strategic guidance, oversight during 2004‐2007 period • Reporting does not provide adequate situation analysis  negative perceptions of performance • Accountability concerns within UNDG model: lack central point of authority for oversight, QA 13

15. Lessons Learned I Donor Committee Meeting • MDTFs “best practice” in post-crisis situations: • Rapidly mobilize financial and political resources • Create dialogue space authorities  donors • Impartial platform in politicized environment • Multilateral Administrator with staff, systems in place for handling high-risk situation • Pools political, implementation risks, information costs across actors • May reduce overall transaction costs of imple- mentation, especially for national authorities (time wastage of particular importance) 14

16. Lessons Learned II Donor Committee Meeting • Strong fiduciary management, transparency, accountability (vs. bilateral: poor insight, inefficiencies, vulnerable to corruption) • Potential for common donor approach  spill-over from MDTF to bilateral activities  key value-added for national authorities • “Hit the ground running”: exploit own capacities, relations to stakeholders, political access • Ensures stable, predictable, flexible funding to recovery priorities; supports stronger local voice; enhances “big picture” planning for all parties 15

17. Lessons Learned III Donor Committee Meeting • MDTFs high-risk, high-cost environment: QA should be intensive  overheads higher • MDTFs are integrated systems, consensus built. Performance dependent on/vulnerable to • Ownership and leadership by authorities • Donor involvement – policy/decision making + substantive inputs (conflict analyses, poverty studies, gender & environment assessments…) • Built on trust  hostage to least flexible  time cost to find acceptable solutions can be high • Donor funding not always consistent with principles of MDTF (earmarking and visibility) 16

18. Lessons Learned IV Donor Committee Meeting • “Two window” MDTF potential: broader scope of needs than single administrator. IRFFI model not exploited: comparative advantages not identified, no division of labor • More focus on quality-reporting on higher-level results (Outcome)  better results frameworks, indicator systems, achievement verifications • UN model needs change: (i) remove conflicts of interest w/ independent project appraisal, (ii) create independent management point for accountability for quality and performance 17