Download Report - Independent Evaluation Group - World Bank

xvcountry conditions that had been accumulated over several years, and it was supervisedflexibly, especially in the face of shocks. However, there were shortcomings in theBank’s performance, it continued to overestimate government's commitment andunderestimate institutional weaknesses. In addition, it became too absorbed by theprivatization program at the expense of issues of resource allocation and povertyreduction, where virtually no progress was made as noted above. Borrower performanceis rated moderately unsatisfactory because of lukewarm commitment, a reactive attitudeto Bank's presence, and a lack of vision to address poverty reduction by systematic andcoherent policies.8. The following lessons emerge from the assessment.• The record of fragile political stability in Madagascar pleads for designing policydevelopment operations in a flexible manner based either on a menu-based approachto tranche release, or preferably, on a programmatic series of one-tranche operationswith prior actions.• Given Madagascar's relatively low absorptive capacity, TA operations forsupporting reforms should be well focused and have limited objectives initially aimedat implementation bottlenecks.• Νew institutions in Madagascar need continued assistance from the donorcommunity. Establishing new institutions does not ensure their effective operations.Continued support is required, for example, to strengthen the different regulatoryauthorities created in the public service sectors and competition in general, as well asthe business framework. Similarly, continued assistance is needed to strengthen thejudiciary, which is a long-term undertaking.• Consideration should be given to revive the Private Sector Support Fund, whichproved successful prior to the 2002 crisis, or to set up a similar scheme to promotePSD.• The domestic revenue collection in Madagascar is particularly low. Much greaterattention than in the past should be given by the authorities and by the Bank torevenue mobilization and reallocation of public resources for poverty reduction,without which recent improvements in social indicators will not be sustained.Vinod ThomasDirector-General, EvaluationIndependent Evaluation Group