51347




Departmental Papers Series, No.2




         NON-GOVERNMENTAL 

      ORGANIZATIONS AND WORLD 

      BANK-SUPPORTED PROJECTS IN 

        ASIA: LESSONS LEARNED 



                              by
                        Bhuvan Bhatnagar




Technical Department
Asia Region
World Bank                                  May 1991
         NON-GOVERNMENTAL 

      ORGANIZATIONS AND WORLD 

      BANK-SUPPORTED PROJECTS IN 

        ASIA: 'LESSONS LEARNED 



                             by 

                       Bhuvan Bhatnagar




Technical Department
Asia Region
World Bank                                May 1991
                               ACKNOWLEDGBMln



     The author ia extremely grateful to the ataff member a of the Aaia Region
and EXITE who took time off their extremely buay achedulea to comment on
aeveral drafta of thia report.
     The author would alao like to thank the aupport ataff of ASIVP for their
time and consideration.
                                   FOREWORD 


          For a wide variety of Bank-supported operations, the active
involvement of Non-Governmental Organizations (NGOs) in the design,
implementation and evaluation of such operations is an effective means to
strengthen their economic social and environmental impact. In recognition of
the valuable roles which NGOs can play, a systematic effort by the Bank was
launched several years ago to expand cooperation with NGOs, and to encourage
early engagement by NGOs in forthcoming Bank-financed projects. In parallel,
a number of reviews have been undertaken within the Bank of the settings in
which NGO involvement can be most effective, and the modes of involvement
which have been shown to be most productive. The present report is one such
effort, and it focuses on the Bank's experience in the Asia Region.
           The emphasis of the report is on lessons learned. These are drawn
from insights gained the summer of 1990 through the author's review of a
selected set of Bank-supported projects covering a range of sectors, and
through interviews of officials at various levels in the Bank and in the NGO
community.
          The views and interpretations set forth in the report are, of
course, the views of the author. However, by facilitating dissemination of
these views among Bank staff responsible for the design of lending operations,
it is hoped that they will be stimulated to adopt or adapt appropriate best
practices and innovative approaches identified in this report. The result, it
is expected, would be to enhance the effectiveness of our development impact
in the Asia Region.




                                                      Daniel Ritchie
                                 Tlble of Contents

                                                                   Page No.
EXECUTIVE SUMMARY •                                                   i
Introduction                                                          1
CHAPTER 1 - WHY NGOs? • •                                             3
CHAPTER 2 - NGO-RELATED "HOW to" ISSUES                              10
       A. 	 SINGLE-ENTITY ISSUES: NGO-CENTERED                       10
       B. 	 MULTIPLE-ENTITY ISSUES: NGO-GOVERNMENT-BANK
            RELATIONSHIP • • • • • • • • • • • • • • • • • • • •     16
       C. 	 INTRA-ENTITY ISSUES: NGO-RELATED PROCEDURES OF THE
           BANK • • • • • • • • • • • • • • • • • • • • • • • •      23

ANNEXES
1. 	   Sector-Specific Distribution of 39 Bank-supported
       Projects in Asia • • • • • • • • • • • • •                    29

2. 	   Preliminary Review of the NGO-Component of the
       National Sericulture Project (India)                          31
3. 	   References . • . • • . . • . . • • • • • • •                  35
                              EXECUTIVE SUMMARY 


1.        This study analyzes the role of Non-Government Organizations (NGOs)
in 39 Bank-supported projects, in 12 sectors, in 8 Asian countries, and
describes ~ has worked and why, so as to assist Bank Task Managers of
future projects to involve NGOs in the most effective and tested manner.
2.        The analysis is presented in a sequence of answers to nine logical
questions which Task Managers may have concerning NGOs. These questions are:
3.        Why is it necessary to consider NGOs? NGOs area means to
innovation; to target marginalized people, organize these marginalized people
into purposive groups, and facilitate the participation of these groups in
their own development. The targeting, organization, and participation of
marginalized groups is demonstrably linked to efficient, effective, equitable,
and sustainable development. NGOs are also a means to effective and
inexpensive delivery of services.
4.        NGOs may contribute to all phases of Bank project cycle
(identification and design; implementation; and monitoring and evaluation).
While, in Asia, the Bank is tapping the potential of NGOs to contribute
upstream to identify, design, and implement Bank-supported projects, the
potential of NGOs to contribute downstream to monitor and evaluate projects is
an important but underutilized development resource.
5.        Why is it necessary but not sufficient to consider NGOs? NGOs,
which often have significant disadvantages, may not always be the best
institutional mechanism to combat poverty. Certain government line agencies
in Asia serve as role models for facilitating participatory development and
delivering cost-effective services to marginalized populations. Similarly,
local governmental and semi-governmental institutions have proven to be
effective in Asia. Task Managers are advised to comparatively assess
available institutional mechanisms irrespective of the sector to which they
belong: private, public, or NGO.
6.        Comparative institutional assessment builds upon complementarily as
well as competition between institutional alternatives, and emphasizes
enhancement of participatory processes which work to empower and enrich the
poor. This assessment is ex-ante, demand-driven, and field-based.
7.        How to categorize NGOs? Bank collaboration with indigenous NGOs (as
opposed to international NGOs) is emphasized because development in the Third
World is an indigenous responsibility, developing country governments are
inclined to involve developing country NGOs rather than NGOs based in
industrial countries in Bank-supported projects, and indigenous NGOs are more
likely to have better local knowledge and understanding than international
NGOs.
8.        Integrating existing categories in the Bank, a functional topology
of indigenous NGOs is constructed. The Bank is limited in its capacity to
directly deal with grassroots organizations (one type of NGO) as these tend to
be small, unstructured, localized, and vulnerable, and sometimes utilizes
intermediary NGOs (another type of NGO) to bridge the gap between grassroots
organizations and itself.
9.        Intermediary NGOs are sub-divided into two functional categories.
Service-provider intermediary NGOs are being extensively used by the Bank in
Asia to generate demand or services provided by Bank-supported projects, train
beneficiaries and line agency staff, form and manage service-delivery
institutions, and deliver and expand services. Policy-advocacy intermediary
NGOs have the potential to contribute to Bank-supported projects by bringing
issues such as the environment, technical knowledge of local conditions, and
conCerns of disenfranchised people to the attention of the Bank, assisting in
                                    - ii ­

planning and design, acting as watchdogs during implementation, and providing
stimuli to corrective action.
10.       Sector-specific as well as cross-sectoral apex organizations (NOO
coordinating bodies) increase contract and collaboration among NOOs, provide
services to members, improve links with the government and external donors,
and augment resources available to NGOs.
11.       How to identify and select NGOs? Identification and selection
mechanisms for intermediary NGOs are important for four reasons. First, there
exist such a large number of NGOs in some Asian countries that selection
criteria prove useful to narrow the sample for operational collaboration. On
the other hand, in some Asian countries where there are virtually no NGOs in
particular sectors selection criteria help the Bank to identify the best NOO
from the limited sample. Third, selection criteria enable the Bank to
distinguish between genuine development NGOs and others. Finally, selection
criteria assist the Bank in working with a cross-section of NGOs.
12.       The Bank has formulated four well-defined strategies to select and
identify intermediary NGOs in Asia. These strategies which reinforce each
other include developing NGO databases, networking informally with the NOO
community, tapping the networks of government apex organizations. NGQ apex
organizations, and Bank-NGO committees, and utilizing the information systems
of well-established NGOs.
13.        How to facilitate Government-NGO relations? Generalizations about
government-NGO relations are complicated by the spectrum of orientations
towards government found among NGOs, even within a particular national
setting. Differences also exist among governments in both their commitment to
pluralism and their ability to enforce their will, resulting in a spectrum of
government orientations towards NGOs.
14.       But the Bank has to work primarily with and through the government
in any country, whatever its orientation may be towards NGOs. The inclination
of a government to support NGO involvement in the long-run is an important
precondition for the Bank to enhance government-NGO relations.
15.       Given the existence of this precondition, the Bank utilizes eight
strategies to facilitate government-NGO relations in Asia. The Bank
influences the government of a particular country in key policy areas to make
government-oriented studies to build up evidence of NGO success stories and of
successful government-NGO collaboration so as to operationalize measures for
implementing this collaboration. Since Bank involvement with NGOs depends on
the concurrence of the government concerned, Bank support for trilateral
(government-NGO-Bank) meetings proves to be a fruitful strategy. Efforts to
sensitize senior officials who matter in formulating and implementing state
policy helps create a "space" for NGOs. Similarly, using existing training
seminars to sensitize lower line agency officials to participatory development
paradigms enhances day to day operational cooperation with NGOs. Encouraging
movement of NGO staff into government line agencies injects a sense of
"ownership" of Bank-supported NGO-components directly into line agencies.
Using incentives to buy cooperative effort from line agency staff in NGO­
components is another successful strategy. Bank support for the creation of
sector-specific local-level government liaison cells to facilitate, support,
and co-ordinate NGO activities increases the role and scope of NGOs.
16.       How to facilitate NGO-Bank relations? While improved collaboration
between government and NGOs is more important than direct NGO-Bank relations,
the Bank employs several strategies in Asia to strengthen these relations.
17.       The Bank makes an effort to institutionalize NGO-related work by
assigning at least one staff member in the Resident Mission the responsibility
to network with NGOs and to monitor Government-NGO relations. The Bank
identifies and closely interacts with key individuals who strongly influence
                                   - iii ­

the MGO community in each Asian country. Bank-RGO Committees, like the one in
India, serve as a forum for routine discussion between the Bank and a sample
of NGO leaders. Exchange of perspectives between the Bank staff and MGOs is
facilitated by Asian RGO members who serve in the operational departments of
the Bank for limited time periods. COnsultations with RGOs upstream for
Sector Reviews helps the Bank elicit important insights and develop support
for its anti-poverty programs. A structured dissemination process of I§g
literature for its operations and policy formulation staff enables the Bank to
learn from these studies. The Bank "buys into a good thing" by scaling up and
multiplying successful small scale efforts led by RGOs.
18.        How to use Bank funding procedures to work with MGOs? It may be
appropriate for the Bank to consider quantity of loan disbursed as only a
minor indicator of the success of RGO-related projects, since these projects
emphasize self-financing and self-development and usually require small loans
over long periods of time. RGO-related projects may also require pre-project
funding due to pre-implementation community organizing activities they
undertake.
19.       IBRD loans and IDA credits are made to member governments, which
then pass these funds on to public or private implementing agencies like RGOs.
Government fund disbursing agencies usually lack extensive experience working
with RGOs, and tend to assume that RGOs can be incorporated in their
operations by following a "business as usual" approach. The Bank encourages
government agencies to develop transparent, ob1ective, and efficient financial
disbursement and grant processing procedures.
20.       The funding mechanisms the Bank uses to channel funds to MGOs in
Asia are: contracting RGOs as consultants, disbursing funds through
centralized and decentralized mechanisms, building upon existing institutions,
requesting other donors to co-finance or parallel finance RGO activities, and
directly funding RGO-related policy work.
21.       How to use Bank accounting procedures to work with RGOs? It is
advisable that an agreement on mutually acceptable procedures, based on
Operational Directive 14.70, should be reached by the Bank Regional Accounting
Advisor and his RGO counterpart before the RGO becomes formally involved with
the Bank-supported project. The degree of information revealed by the RGO
must meet the requirement of public scrutiny without compromising on the
independence of the RGO.
22.       How to use Bank evaluation procedures to work with MGOs? The Bank
plays an important role in applying pressure for performance on NOOs by
developing and applying relevant monitoring and evaluation systems to NOO­
components of Bank-supported projects. These monitoring and evaluation
techniques attempt to integrate quantitative and qualitative methodologies,
and institutionalize these methodologies in MGOs, especially in those RGOs
with whom the Bank is involved in a long-term relationship.
                                    - 1 ­


           Non-Governmental Organizations and World Bank-Supported 

                     Projects in Asia - Lessons Learned 


Introduction
     The main objective of this study is to assist Asia Region Management and
staff to contribute to future cooperation between the World Bank and Non­
Government Organizations (NGOs) by drawing lessons from past experiences and
analyzing current status. Specifically, 39 Bank-supported projects, in 12
sectors, in 8 Asian countries which have had or are having significant NGO
involvement are examined. The purpose of reviewing these projects is to
determine (apropos of the NGO component) what happened, why it happened and
what, if any, lessons may be learned.
     The analysis is presented in a sequence of answers to logical questions.
These questions are further sub-divided into two sets.
     The first set of questions relates to the efficacy of utilizing NGOs in
development. These questions are:
     1.   Why is it necessary to consider NGOs?
     2.   Why is it necessary but not sufficient to consider NGOs?
     The second set of questions discusses "how to" issues focusing on
impediments to and means of strengthening the participation of NGOs in the
process of socioeconomic change. These nuts-and-bolts issues constitute an
"entity" continuum from "single-entity" issues to "multiple-entity" issues to
"intra-entity" issues.
     First, "single-entity" issues focusing on NGO-centered themes are
studied. The questions scrutinized in this sub-set are:
     3.   How to categorize NGOs?
     4.   How to select and identify intermediary NGOs?
      Second, "multiple-entity" issues associated with the trilateral
relationship between NGOs, the government, and the Bank, are investigated.
The questions pertinent to this sub-set are:
     S.   How to facilitate Government-NGO relations?
     6.   How to facilitate NGO-Bank relations?
     Third, "intra-entity" issues relating to Bank procedures concerning NGOs
are examined. The questions discussed in this sub-set are:
                                    - 2 ­


     7.   How to use Bank funding procedures to work with NGOs?
     8.   How to use Bank accounting procedures to work with NGOs?
     9.   How to use Bank evaluation procedures to work with NGOs?
     It must be emphatically stated that there are no "right" answers to these
questions. (In fact, there may be no "right" questions., Employing a
question-answer format, this study attempts to identify contrasting approaches
the Bank has taken vis-a-vis NGO-related issues.
                                       - 3 ­


                                CHAPTER 1: WHY NGOs?
          NGOs are one (but not the only) viable institutional mechanism which
may be utilized by the Bank to promote socioeconomic change in Asia, since
NGOs have made significant contributions to Bank-supported efforts, in 12
sectors, in all stages of the project cycle, throughout Asia.

Question 1: Wby is it necessary to consider HOOs?
1.        Contributions of NGOs: NGOs are institutions in neither the public
nor the private sectors whose goals are primarily value-driven (humanitarian
or cooperative) rather than profit-driven (commercial). Until recently,
development-oriented NGOs have figured centrally neither in the mainstream
theory nor the practice of development. This neglect is surprising when NGO
contributions to the process of socioeconomic change are taken into account.
NGOs have contributed to development by:
     (a) 	 Innovating: NGOs contribute to both the theory and practice of
           development by identifying issues, promoting initiatives,
           experimenting and testing new approaches, and initiating policy
           change by creating awareness and building a new consensus.
           Important nascent development concerns are often best explored by
NGOs. Such issues are not yet ripe for fitting into a program and being
administered in a structured manner by governments or large private
enterprises. Governments have to be concerned with consensus; therefore, they
find it difficult to explore directly new issues that have not reached a
minimal level of social import. These issues are "gray zones", or unexplored
areas of social concern. NGOs enjoy higher levels of flexibility and freedom
to experiment with "gray zones" because of their "special" position within
society, as NGOs answer only to those (popular) sectors to whom they are
committed.
     (b) 	 Targeting: NGOs usually choose as their "target groups" those
           sectors of the population known as the "marginalized". The
           "marginalized" have few basic resources or infrastructure and are
           often located in barely accessible places, where government programs
           are limited, do not exist, or are ineffective. NGOs are able to
           target "marginalized" constituencies since their criteria for
           choosing their intended constituency are rather particularistic and
           do not necessarily have to conform to the universalistic criteria of
           "good for everybody" adhered to by government agencies.
     (C) 	   Organizing: NGOs often induce disadvantaged people to purposively
             organize structures of group action for self-reliance and self­
             development. These groups are potentially useful for augmenting
             institutional development efforts designed to serve the needs of the
             "poorest of the poor". In the development process, these
             organizations of marginalized people serve to provide opportunities
             for beneficiary participation, facilitate planning and goal setting,
             increase resource mobilization, enhance resource management,
             influence external actors, maintain group solidarity, reduce risks,
             allow for economies of scale, and insure members against personal
             tragedy.
     (d) 	 Facilitating Participation: Within their projects, many NGOs
           attempt to create practical schools of democracy by promoting
           participatory practices at local levels. This implies taking into
           account local needs, local knowledge, local resources, local
           leadership, local status, local communication systems, and local
           religion by working through organizations of marginalized groups. A
           recent study concludes that the organization of marginalized groups
           correlates fairly strongly with participation variables:
                                    - 4 ­

          distribution of decision power, resource contribution, commitment,
          ownership, and capacity.
          But beneficiary participation in development projects is not an end
in itself. According to a 1987 Bank study, "participation" is a process for
achieving development which is effective, efficient, equitable, empowering,
and sustainable. A 1985 report from Operations Evaluations Department of the
Bank explicitly links beneficiary participation and project sustainability.
In the report, 25 projects are evaluated 5 to 10 years after project
completion. 12 of the 25 achieved some measure of long-term sustainability,
while 13 did not. The report finds that a major influence on sustainabi1ity
is the presence of grassroots organizations.
          Similarly, in 68 Bank-supported development projects which took into
account sociocultural variables like local needs, local knowledge, and local
organizations, the economic rate of return was twice as high as that of
socially insensitive projects. This indicates that paying attention to issues
of beneficiary partiCipation does payoff in economic terms.
          These Bank studies demonstrate the importance of participation to
project efficiency and viability. NCOs are one institutional mechanism
(means) for promoting beneficiary participation. By working through and
investing in organizations of disadvantaged peoples, they often contribute to
efficient, effective, equitable, and sustainable development (end).
     (e) 	 Delivering Services: Official donors have turned to NCOs out of
           "pragmatic considerations", seeing them often as "more efficient
           conduits of development inputs than the often discredited official
           agencies". The small size and manageability of NCOs, their freedom
           from bureaucratic process and delay, and the social commitment of
           their members often result in committed and effective delivery
           operations. Moreover, NCOs tend to have low administrative and
           operating costs, due to an ability to mobilize volunteer labor and
           tendency to use low cost technologies which result in cost-effective
           delivery.
          To sum up, NCOs, which have until recently been ignored both in the
mainstream theory and practice of development, may make valuable contributions
to the process of socioeconomic change in developing countries. NCOs are not
an end unto themselves, but rather a means to innovation; to target
marginalized people organize these marginalized people into purposive groups,
and facilitate the participation of these groups in their own development.
The targeting, organization, and participation of marginalized groups may be
demonstrably linked to efficient, effective, equitable, and sustainable
development. Finally, NCOs are a means to effective and cost-effective
delivery of services.
2.        Sector-Specific Contributions of NCOs: NCOs have contributed to
Bank-supported projects in many different sectors. The 39 Bank-supported
projects analyzed in this study are distributed across 12 different sectors.
The sector-specific distribution of these 39 projects is presented in Annex 1.
NCO contributions have been most significant in Population, Health, and
Nutrition; Irrigation and Resettlement; Urban Development and Water Supply;
Agricultural Productivity and Credit; Environment; Common Resource Management;
and MicrO-Enterprises.
3.        Project Cycle-Specific Contributions of NCOs: NCOs may play an
important role in all phases of the project cycle (identification and design,
implementation, and monitoring and evaluation). Analysis from the other
Regions suggests that the Bank generally tends not to involve NCOs upstream in
identifying and designing projects. But this analysis reveals that this is
not so for these 39 projects in Asia.
                                    - 5 ­


          In more than 50 percent of the 39 Bank-supported projects included
in the present study, NGOs were involved in the identification and design
stage of the project. While the record of the Bank is far from perfect in
this context, analysis of these 39 projects suggests that, in the Asia Region,
the Bank has increasingly been giving attention to involving NGOs upstream in
identifying and designing NGO-related projects, and has not been (mis)using
NGOs merely as "tools to implement projects". Selective examples are
presented to highlight the fact that the Bank has been utilizing NGO expertise
in identifying and designing Bank-supported projects.
          For example, WALHI, the environmental apex organization, used its
extensive knowledge of environmental issues in Indonesia to help the Bank
identify 10 endangered national parks.
          Similarly, MYRADA, an Indian NGO which was contracted by the
Karnataka state government, used its knowledge of local conditions to
contribute to the design of a socioculturally sensitive resettlement scheme of
the Upper Krishna II Irrigation Project. MYRADA started with a sound social
survey of the affected population and its needs, assessed the potential for
relocation, and prepared a much acclaimed resettlement plan, in cooperation
with government agencies.
          Similarly, the Bank had strong help from the World Wide Fund for
Nature Malaysia in the final preparation of the environmental management plan,
covering wildlife preservation and preparation of a conservation strategy for
the country, under the Subah Settlement and Environmental Management Project.
          In the Philippines Health Development project, which is presently
underway, the intention is to harness the complimentarities of NGOs and
Government in community organization and service delivery to bring about a
health system more responsive to demand and felt needs than was offered by the
largely supply-oriented health system of the past. The project was based
partly on the innovative work of a pioneering NGO in one province, and in as
many as 3 of the 4 provinces included in the project a large number (varying
from 12 to 26) of NGOs are now involved in the planning phase at the
provincial level.
          The process of involving NGOs in project design has accelerated due
to the stipulation laid down in the Environmental Assessment Operational
Directive for local consultation while designing environmentally sensitive
projects.
          This trend for involving NGOs in designing projects seems to have
gathered sufficient momentum in the Asia Region to encourage task managers to
experiment with innovative ideas. For example, an interesting strategy for
utilizing NGOs in designing projects is envisaged in the proposed Women, Rural
Administration and Poverty (WRAP) Project in India. About nine NGOs which
meet certain criteria of the Bank will be selected by PRADAN (an intermediary
NGO) to participate in a workshop orchestrated by PRADAN. These NGOs will
document the "what and how" of their development efforts to reach the poor.
These innovative mechanisms which stimulate the demands of the poor and enable
the poor to articulate these demands will be adapted and used to design the
WRAP project.
          Thus, NGOs have been important and useful sources of information and
input at the identification and design stage of Bank-supported projects in
Asia.
          A more appropriate criticism of Bank-supported projects in Asia
would be that involvement of NGOs downstream in the project cycle, i.e. in
monitoring and evaluation of projects, has been insignificant. Thus far,
whenever NGOs have contributed to monitoring and evaluation of projects in
Asia they seem to have been involved in a reactive rather than a pro-active
sense. These NGOs have contributed to Bank-supported projects by involving
                                             - 6 ­

and self-advertising themselves rather than being asked up front by the Bank
to monitor and evaluate projects. For example, several NGOs involved
themselves in the Sardar Sarovar Project in India by critically evaluating the
Gujarat Resettlement Scheme.
          The Bank needs to move in the direction of pro-actively involving
NGOs in monitoring and evaluation of projects in Asia. The proverbial first
step in the right direction was taken when two NGO-Bank Committee (India)
members were recently contracted to evaluate the Population VII Project.
          To sum up, while in a number of cases in Asia, the Bank is tapping
the potential of NGOs to contribute upstream to identify, design, and
implement Bank-supported projects, the potential of NGOs to contribute
downstream to monitor and evaluate Bank-supported projects is an important but
underutilized development resource.

Ques~ion   2:   Why is   i~   necessary   bu~ no~   sufficien~ ~o   consider MOOs?

          Although the first section built up the advantages of working with
NGOs, it must be stressed that NGOs are just one of the many institutional
mechanisms which may be utilized by the Bank in its work against poverty.
Market mechanisms, government line agencies, local government units, etc, are
others. There is a need for a case by case comparative assessment of
alternative institutional mechanisms before the Bank staff buys into the
rhetoric in support of NGO involvement. The rhetoric of NGO superiority is
clearly not always true in the areas of participatory development, delivering
cost-effective service, mobilizing hard to reach communities, etc.
          Certain government line agencies in Asia serve as role models for
facilitating participatory development and delivering services to marginalized
populations. A case in point is that of the National Irrigation
Administration (NIA), Philippines. The participatory programs of NIA
demonstrate that even large government programs can be implemented in ways
that empower local people to take active roles in their own development.
Similarly, the bureaucracy in Bangladesh was a powerful force in the original
small-scale Comilla project, and it remained so in the early stages when this
model was replicated. In 1977, in a community-based Reforestation project in
Nepal, the bureaucracy followed traditional procedures, exercising its control
function in banning exports, devising project schemes in furtherance of
national policies in light of local needs, and integrating the activities of
other agencies whose support of village development was required. A lesser
known case is that of the Canara Bank, a nationalized Indian Bank which has
successfully supplied credit and related services to disadvantaged people in
several states in India.
          Further, the significant role played by local governmental and semi­
governmental institutions in promoting grassroots development, like the role
of the "panchayats" in Karnataka and West Bengal, the "barangay" councils in
the Philippines, and the "saemaul" units in Korea, cannot be overlooked. In
general, such institutions seem to be more prevalent and effective in Asia
than in other regions of the developing world.
          Therefore, a seemingly trite but nevertheless important recommenda­
tion to the Task Manager is to consider the inclusion of the best institution
in the project regardless of the sector to which it belongs: private, public
or NGO. For example, the Bank is attempting a comparative assessment of
alternative institutional mechanisms in the Indian Integrated Watershed
Project, in order to select the best available alternative. A NGO ­
Development Alternatives- has been contracted in the design stage to evaluate
whether the "panchayats" or grassroots NGOs are better suited to organize
marginalized groups, act as intermediaries, and train farmers in various
districts of four states in India.
                                        - 7 ­

          Having indicated the need for comparative assessment of
institutional alternatives to combat poverty, this section will further
explore two related issues in this context: Why should a comparative
assessment of institutional alternatives be made? How should it be made?

1.          Why should a comparative assessment of institutional alternatives be
made?
          The reasons for stressing comparative assessment of alternative
institutional mechanisms for combating poverty are the following:
        (a) 	 Disadvantages of NGOs: The first reason for stressing the need for
              a comparative assessment of various institutional mechanisms is that
              NGOs have certain disadvantages, which may significantly reduce
              their "net" advantages. In fact, the strengths for which NGOs are
              acclaimed can also be serious weaknesses. For example, "small
              scale" can merely mean "insignificant", "politically independent"
              can mean "powerless" or "disconnected", "low cost" can mean ·under­
              financed" or "poor quality", and "innovative" can mean "temporary"
              or "unsustainable".
          It is suggested that Task Managers be aware of the potential
disadvantages of NGOs. Many NGOs seem to have limited ability to develop
grassroots organizations that are able to sustain themselves once the NGO
withdraws its special staff and resources; they usually have limited funding
as well as limited managerial and technical expertise; their activities may be
too small and localized to have regional or national impact; they often ignore
the larger context in which they operate, focusing only on the micro-level and
failing to recognize the extent to which the communities they serve are parts
of systems strongly influenced by other agencies or forces; their advocacy
role often injects a sense of antagonism in their relations with the
government; they may be hostile not only to governments, but to one another,
and their isolationist tendencies limit inter-NGO collaboration and sharing of
experiences which result in wildgoose chases, strategic errors, and attempts
to reinvent the wheel.
          Some NGOs claim to help poor people change their situation through
participation, democracy, and self-help and yet they themselves are non­
participatory, non-democratic, and entirely dependent on outside help for
their survival. Evidence is also emerging that many NGO-sponsored projects do
not reach the poorest sectors in developing countries, but concentrate (as do
nearly all official programs) on those easier to assist (and of lower risk)
who have some minimum of land, education, and capital. In addition,
grassroots participants (especially women) are often not involved in the
planning and design of projects, and frequently have little effective input
into the decision making process of NGOs that claim to represent them.
        (b) 	 Complementarity between Institutional Alternatives: Further,
              comparative assessment is task specific. In one component of the
              project NGOs may have an advantage and in another the local govern­
              ment may be the best choice. This should be assessed well in
              advance so that there is an interplay of institutions - public,
              private, and voluntary - in order to assist the poor to achieve what
              they consider to be a better life. Thus, division of labor based on
              the criterion of task specific comparative assessment builds on the
              complementarity of several institutional mechanisms.
          In the Shrimp Culture Project in Bangladesh, for example, the NGO
personnel and the PIU extension personnel each perform their essential
missions in cooperation with the other. The Extension Service has good
technical skills, while the NGO personnel concentrate on social work,
organizing and motivating farmers and maintaining the dynamic which helps keep
the Extension Service effective. Both types of work need to be done and the
                                     - 8 ­


coordination exhibited by both groups (in performing tasks in which each has a
comparative advantage) creates an effective symbiotic effect.
          Similarly, the effectiveness of division of labor between alterna­
tive institutional mechanisms according to task specific comparative advantage
is demonstrated in the Indonesian Irrigation Sub-Sector Project. LP3ES, an
intermediary NGO, was hired as a consultant to train government irrigation
inspectors ("juru pengirans") to become community organizers. These
government inspectors, in turn, organized farmers into water user
associations. The success of these water user associations is amply
demonstrated by the fact the 7000 hectares of irrigated land has been handed
over to them. Thus, not only is there successful division of labor but skills
are also passed from one type of NGO (intermediary) to "juru pengirans"
(government line agency staff) to another type of NGO (grassroots
organizations).
           The Philippines Health Development Project is also geared towards
the evolution of such cooperation between the Department of Health units,
local government units, and NGOs at the provincial level. This project builds
on the complementarities of each kind of institution - service provision and
finance from central through local health unit; education and motivation by
the NGO in the community; resource mobilization and ancillary public works by
local government. (SAR, May 25, 1989, p.25)
     (c) 	 Competition 'between Institutional Alternatives: This strategy of
           division of labor based on comparative assessment of multiple
           institutional mechanisms builds on elements of competition as well.
           First, it breaks the monopoly power of any single institutional
           mechanism. In addition to avoiding the risks and breaking the power
           of monopoly, a plurality of organizations also introduces
           competition and the added incentives that comes with it. In Korea,
           for example, church-sponsored groups succeeded in their mission of
           providing rural credit to independent village-level unions, only to
           encounter competition from the government because of their success.
           The government responded by setting up rival sources of credit,
           called "Village Money Boxes," under the semi-governmental "saemaul
           undong". The government groups competed for membership with NGOs,
           offering lower interest rates and providing special institutional
           support to members. By adopting devolved and participatory styles
           of programming, the "saemaul" was able to introduce major benefits
           to the rural population without undermining the citizens' ability to
           participate in making important local decisions.
          Moreover, if several organizations are operating in the same
environment, a comparative judgment of relative quality is fairly easy to
make. Competition thus provides consumers and suppliers with an efficient
source of information. Finally, when the poor are given a choice among the
organizations that serve them, they are empowered. Rather than having to
endure indignities and inefficiencies, they can "exit" the offending
organization and "enter" another one.
     (d) 	 Lack of Institutional Alternatives: Another reason for stressing
           the need for comparative assessment is to evaluate whether any
           institutional mechanism reaches the "poorest of the poor". Some NGO
           evaluators cast doubt on the extent to which even NGOs can reach
           this group. In such a situation, the institutional mechanism which
           has the best chance of reaching the bottom 20% of the population
           should be strengthened.
          In Indonesia, for example, the LKMD and PKK (NGOs) are weakest in
relatively remote areas where they are needed most, but official services may
be even less present in remote areas. Further, official services are less
respon.ive to local needs in remote areas than the LKMD and PKK, whose
officer. are local people. A Bank-financed study, for example, of KOD.,
                                       - 9 ­

government cooperative units in Indonesia, indicates that most KUDs are
dominated by relatively well-off people who use the monopolies that Government
of Indonesia has granted KUDs for private profit. Thus, a concentrated effort
is needed to strengthen the LKMD and PKK (NGOs) in low income areas to assist
them in contributing to making the "very poor", a little less poor.
        (e) 	 Institutional Development vs Process Enhancement: A final reason
              for focusing on comparative assessment of institutional alternatives
              is that such an assessment may pinpoint the common underlying thread
              running through these varied institutional alternatives. NGOs,
              government line agencies, and local governments all seem to use
              similar processes when they successfully facilitate grassroots
              development.
          Simply stated, a comparative assessment may help redirect the focus
of policy makers away from NGO studies or local government studies, towards
studies which emphasize enhancement of participatory processes which work to
empower and enrich the poor.

2.          How should a comparative assessment of institutional alternatives be
made?
        (a) 	 Comparative advantage should be assessed ex-ante, during sector
              review, identification, and design stages of the Bank's work, in the
              field, not merely at the appraisal stage through a desk-top study.
        (b) 	 Comparative advantage should be assessed relative to the needs of
              the beneficiary community. Therefore, intended beneficiaries,
              especially the poorest should be asked, what their needs are and
              only then should it be evaluated which mechanism would better serve
              these needs: NGOs, government line agencies, or local government
              units.
          The "lodging strategy" used by the Central Visayas Regional Project
(CVRP) community organizer in the Philippines is a good example of "listening
to the people" about which institutional mechanism serves them best and in
which particular context. By living in the community for six months the
community organizer can evaluate whether the "barangay" council is an adequate
mechanism for fulfilling the needs of the "poorest of the poor" within a
particular community or whether the extremely poor people need to be organized
into separate grassroots organizations.
          To sum up, a favorite term in the NGO community is "alternative".
NGO rhetoric often assumes that NGOs are the "best" alternative. Task
Managers need to continually question this assumption by comparatively
assessing available institutional alternatives to combat poverty, irrespective
of the sector to which they belong. This should be a exante, demand-driven,
and field-level assessment. The alternative assumption on which this
assessment should be based is that NGOs are one (but not the only) viable
institutional mechanism which may be utilized in the process of socioeconomic
change.
                                        - 10 ­


                    CHAPTER 2:   NGO-RELATED "HOW TO" ISSSYES

          Chapter 1 concludes that NGOs are one of the important institutional
alternatives which may be utilized by the Bank in Asia. Chapter 2 will
discuss "how to" issues focusing on impediments to and means for strengthening
the participation of NGOs in processes of socioeconomic change which the Bank
is supporting in Asia.
          These key issues will be organized along an "entity" continuum.
First, "single-entity" issues dealing with NGO-centered themes will be
analyzed. Second, "multiple-entity" issues associated with the relationships
between three central entities, namely, NGOs, developing country governments,
and the Bank, will be examined. Finally, "intra-entity" issues relating to
the procedures of the Bank concerning NGOs will be discussed.

A.   SINGLE-ENTITY ISSUES: NGO-CENTERED

Question 3:   How to categorize NGOs?
          This section will focus on the crucial roles played by indigenous
NGOs, as opposed to international NGOs, in their operational collaboration
with the Bank in Asia. An attempt will be made to spell out a functional
topology of indigenous NGOs which may assist the Bank in this operational
collaboration.
1.        "Indigenous" NGOs: This review of NGO experiences focuses on
indigenous NGOs for three reasons. First, indigenous NGOs rightly assert that
development in the Third World, from setting the development priorities to
implementing projects, is an indigenous responsibility. A founder of a Third
World NGO puts it succinctly, "Our friends in the international NGO community
seem to have a kind of mental block against accepting this fundamental option:
however poor or underdeveloped our countries are and however ill-managed or
non-professional our indigenous NGOs are in the South, the burden of
responsibility for development is ours and ours alone."
          Second, developing country governments more often involve developing
country NGOs in Bank-supported projects than NGOs based in industrial
countries. Since developing country governments are the primary partners of
the Bank and not NGOs, whether international or indigenous, the Bank must
respect the prerogative of these governments to choose which type of NGOs they
prefer to collaborate with.
          And finally, indigenous NGOs are more likely to have better local
knowledge and understanding than international NGOs. It is therefore
appropriate for the Bank, and this study, to emphasize collaboration with
indigenous NGOs.
2.        "Types" of Indigenous NGOs: Before embarking on a systematic
categorization of indigenous NGOs, a general point apropos of NGO topologies
needs to be made. There seems to be an inclination in the Bank to create new
topologies each time a study of NGOs is undertaken. Although thinking in
terms of "types" may help order a vast universe of NGOs, excessive stress on
creating new topologies may be an exercise in reinventing the wheel since
there already exist several good topologies of NGOs in Bank documents: Salmen
and Eaves; Korten and Brown; and EXITE. The emphasis should be on creatively
utilizing existing topologies, not on multiplying them.
          An example of creatively employing     existing topologies within the
Bank to demonstrate how these can compliment     each other is that of integrating
the EXITE topology with the Salmen and Eaves     topology. The EXITE topology,
gives the broad categories, while the Salmen     and Eaves topology, provides
                                    - 11 ­


depth to the broad EXITE categories by breaking them down further.   The
resultant functional topology of indigenous NCOs is the following:
     (a) 	 Grassroots Organizatiops: These are defined as groupings of rural
           and urban dwellers, with some formal structure, directed towards
           increasing the economic productivity of members as well as
           facilitating the development of local social and economic
           infrastructure.
          Grassroots organizations are membership organizations in the sense
that they are formed to meet the direct and specific needs of their
membership. Examples of development-oriented grassroots organizations in Asia
include religious groups, kinship groups, ethnic groups, caste groups,
cooperatives, age groups, gender groups, friendly societies, village dancing
societies, funeral societies, village assemblies, neighborhood associations,
water user groups, herders' groups, rotating credit associations, mutual aid
societies, and so on.
          Some NGO critics argue that direct Bank interaction with grassroots
organizations will make them "vulnerable". An official of a reputed
international NGO comments, "I have serious reservations about the Bank moving
too far toward dealing directly with community-based organizations. Because
of the Bank's money and power the relationship would be so unequal that the
integrity of the local group could easily be damaged and undermined. I think
NGOs should instead encourage participation through intermediary
organizations. Such intermediaries could offer a measure of protection both
from the government and from the power of the Bank."
          Further, these grassroots organizations tend to be small,
unstructured, and localized. This limits the ability of international
institutions like the Bank to directly interact with grassroots organizations.
     (b) 	 Intermediaries: Regional or national NGOs often serve as a bridge
           between macro-level developments and grassroots organizations, and
           are referred to as "intermediaries" (between grassroots
           organizations and the Bank). Their intermediary character is
           reinforced by the fact that a majority of their programs are
           basically for others rather than their own membership.
These "intermediaries" may be further sub-divided into the two functional
categories laid out by Salman and Eaves:
          (1) 	 Service-Providers: Service-providers do not merely perform the
                narrow function of delivering cost-effective services as their
                name implies. The Bank uses service-provider NGOs to perform a
                variety of tasks. These tasks include generation of demand for
                services provided by the project, training of beneficiaries and
                line agency staff, formation and management of service­
                delivery institutions, delivery of services, and expansion of
                services.
         (ii) 	 Demand Generation: A case in point is the Jakarta Sewerage and
                Sanitation Project where a detailed community development
                effort was undertaken by the project team in assistance with
                community-based NCOs. Over a short period of two and a half
                months (from the commencement of project involvement by NCOs),
                in three "kelurahan", 8 individual and group toilets were built
                with more than 350 applicants having taken the first step in
                making applications for credit. Demand rose substantially
                because of the active community development process undertaken
                by NCOs.
        (iii) 	 Training: PKK, an Indonesian national women's association, in
                the case of the Nutrition Development Project, now organizes
                                    - 12 ­

               systematic gatherings of village women and children at which
               mother-and-child health services are provided and health
               information is disseminated. Swanirvar, an established
               Bangladeshi NGO, in the case of the Population and Health
               Project II, allowed its established infrastructure to be used
               to add on training about health and family planning. By
               "piggybacking" new services onto this NGO's ongoing program,
               over 24,000 persons were trained.
          The Second Elementary Education Project, in the Philippines, has
been recently designed to introduce an innovative non-formal summer preschool
program with NGO involvement as a dropout prevention measure in elementary
schools selected from the poorest municipalities in six regions of the
country. This program will focus on school readiness skills for students
entering first grade in the target communities, a creative approach to prevent
dropout in elementary schools which is being spearheaded by NGOs in the
Philippines. NGOs having experience in similar programs are expected to
assist in developing the program structure, content and appropriate materials,
and in training teachers. (SAR, p. 17, May 30, 1990).
          NGOs have not only contributed to training beneficiaries but also
government line agency staff. For example, in the Rural Development II
project, in Bangladesh, three NGOs - BRAC, PROSHIKA, and VERC - were employed
under contract to the Bangladesh Rural Development Board to provide training
to its staff engaged in the Rural Poor Program.
         (iv) 	 Formation and Management of Institutions: In the Philippines
                Third Urban Development Project, the Philippines Business for
                Social Progress, a local NGO, used the traditional concept of
                "pakiksama" (togetherness) to form mutual guarantee
                associations for credit, resulting in a model financially
                viable small scale enterprise project in the country, financing
                over 450 microenterprises.
The Fifth Population Project in India included a component to provide grants­
in-aid to NGOs in Bombay and Madras, not only to establish but also to manage
selected health clinics.
          (v) 	 Delivery and Expansion of Services: NGOs, in some cases, have
                contributed to service-delivery quite literally. The Project
                Completion Report (PCR) of the Yogyakarta Rural Development
                project mentions that one of the reasons the implementation of
                this project was unsatisfactory in the first two years was
                because of shortage of vehicles. Being acutely aware of this
                problem, YIS, an Indonesian NGO, managing a component of the
                project, provided transport facilities -at no cost to the
                project- to deliver urgently needed construction materials.
          The importance of the role played by NGOs in providing cost-effec­
tive service-delivery is recognized by the Bank as efforts are made to work
with NGOs to expand these services. The Third Population and Health Project
represented a fourteen fold increase of funds <as compared to the Second
Project) to Bangladeshi NGOs to expand and intensify service-delivery
activities within existing structures or by setting up branch organizations in
rural areas.
          The PCR of the First Population Project, Korea, hits the nail on the
head when it concludes that, "the inclusion of NGOs (in this case Planned
Parenthood Federation of Korea) in the project was beneficial, since it
permitted not only significant expansion of service availability beyond the
government sector but also the testing of new methods of expanding and
upgrading services.II These new methods included establishing a self-reliant
studio to produce family-planning videos for training provincial and local
government officials, sponsoring a one-child family club as a support group to
                                    - 13 ­


one-child parents, developing materials for youth for educational .
broadcasting, operating a sex education center, and initiating a workshop for
overseas participants.
          Thus, service-provider NGOs work with the Bank to translate benefi­
ciary needs and knowledge of local conditions to the Bank and translate
project guidelines to the communities; target and organize beneficiaries to
take advantage of project benefits; establish and manage delivery
institutions; and deliver and expand services.
         (vi) 	 Policy Advocacy Groups: These NGOs bring issues such as the
                environment, technical knowledge of local conditions, and the
                rights and concerns of people who are politically and economi­
                cally disenfranchised to the attention of policy makers.
                Policy advocacy NGOs are liable to be ignored by the Bank
                because some staff members regard them as "gadfly organizations
                that are unconstructively critical with scant regard for the
                facts".
           Actually policy advocacy NGOs may play three interconnected
"constructive" roles in Bank-supported projects in Asia: contributing to
planning and design; acting as watchdogs during implementation; and providing
stimuli to corrective action. A case in point is that of the Gujarat
Resettlement Scheme in which policy advocacy NGOs play all three roles. The
Gujarat Resettlement Scheme has been redesigned partly due to the initiative
and criticisms of certain policy advocacy NGOs regarding allocation of land to
eligible oustees, programs to deal with landless and tribals, and the need for
a through assessment of the environmental aspects of the Sardar-Sarovar dam.
Further, some of these policy advocacy groups, like Anand Niketan Ashram of
Rangpur; Narmada Vahini Punarvasan Sangathan of Mangrol; and Shramik Vikas
Sansthanof Baroda, who were earlier critical of the project, are now
assisting the Bank in implementing the redesigned resettlement policy by being
actively involved in the Land Purchase Committee, educating tribals about
their rights apropos of the scheme, and assisting oustees in resettling.
          Another significant case in Asia where the Bank has learned much, in
the areas of forced migration and environmental degradation, from the
criticisms of policy advocacy NGOs is the Transmigration Project in Indonesia.
Similarly, in the Singrauli area of India, the Bank and the Indian government
are taking steps to correct environmental problems caused by intensive
industrial and energy development (including a Bank-financed power project)
after policy advocacy NGOs voiced their concern.
     (c) 	 Apex Organizations: These coordinating bodies are membership
           organizations that operate at the national level in Asian countries.
           They perform the function of increasing contact and collaboration
           among NGOs, providing services to members, improving links with
           government and external donors, and augmenting resources available
           to NGOs.
           According to one study, the apex organizations which are most
effective in Asia are sector-specific coordinating bodies. A case in point is
that of WALHI, the Indonesian environmental apex organization. While WALHI
has decided that it will not serve as a contractor for Bank-supported
projects, it has closely collaborated with the Bank on many other matters,
including assisting the Bank in identifying 10 endangered national parks in
Indonesia.
          In the experience of the Bank even cross-sectoral apex organizations
have contributed to its operations in Asia. The Bank has worked closely with
ADAB in Bangladesh. AVARD has been a key interlocator in India. The Bank has
on-going dialogue with ANGOC in the Philippines. ADAB, AVARD, and ANGOC are
all cross-sectoral apex organizations.
                                     - 14 ­


          To sum up, this study focuses on indigenous NGOs. Further, using
existing categories in the Bank, a functional topology of indigenous NGOs is
constructed. The Bank is limited in its capacity to directly deal with
grassroots organizations (one type of NGO) and sometimes utilizes intermediary
NGOs (another type of NGO) to bridge the gap between grassroots organizations
and itself. These intermediary NGOs may be further sub-divided into two
functional categories. While service-provider intermediary NGOs are being
used extensively by the Bank, policy advocacy intermediary NGOs also make
useful contributions to Bank-supported projects. Finally, the role of NGO
apex organizations is emphasized.

Question 4:   Bow to identify and select intermediary NGOs?

          Identification and selection mechanisms for intermediary NGOs in
Asia are inlportant for four reasons. First, there exist such large numbers of
intermediary NGOs in some Asian countries that by sheer necessity some kind of
selection has to be made to narrow down the options for collaboration. For
example, by even conservative estimates there exist at least 12,000 and 16,000
NGOs in India and Philippines, respectively.

          Second~ selection of NGOs becomes important because some NGOs are
created to manipulate the profitable possibilities generated by external
funding of NGOs. Therefore, it is imperative for the Bank to be able to
distinguish between genuine development NGOs and others.

          Third, if the Bank limits its sample of NGOs by choosing to work
with only the well-established ones then the Bank may be limiting itself to
work with only a handful of like-minded NGOs.

          Fourth, sometimes there may not even exist a handful of intermediary
NGOs in a particular country or a particular sector. Therefore, it becomes
important to have some criteria to select which NGO to work with. For
example, a Bank mission to Malaysia for the Non-Formal Education Project
discovered that there hardly exist any well-established indigenous
intermediary NGOs in Malaysia which are non-ethnic and not closely affiliated
with government. Therefore, the mission decided that its two criteria for
selecting a relevant NGO from the limited sample would be widespread
grassroots presence and some autonomy from the government.

          Thus, it is important for the Bank to have strategies for selecting
and identifying intermediary NGOs to work with in Asia.  Four strategies which
are utilized by the Bank in Asia are:

1.        Develooina NGO Database: Existing NGO database(s) in the Bank are
the EXITE database and AS4CO database on NGOs in India with 2500 entries.
EXITE also maintains other information services including a collection of some
400 published NGO databases and Bank reports on NGOs in various countries and
sectors. These rosters have the following categories of data about NGOs:

     (a)   sector(s) in which the NGO operates and specialization of
           activities.

     (b)   Region (state, district, villages) in which the NGO operates.

     (c)   Past history of NGO.

     (d)   User-base of NGO/Scale of operations.

     (e)   Staffing in terms of managerial and technical skills.

     (f)   Linkages with other donors, international NGOs, national NGOs, and
           apex organizations.

     (g)   Financial information.
                                     - 15 ­



     (h) 	 Relationship with government.
          There are three inherent difficulties in maintaining a database.
First, for certain countries like India and Philippines, with large numbers of
NGOs, it is impossible to compile exhaustive listings of all NGOs. Second,
NGO-related information keeps on changing and therefore a NGO database has to
be constantly updated. To accomplish regular updating a feedback mechanism
needs to be created by which Task Managers and Resident Mission staff
constantly feed new information into this database. An attempt to continually
feedback information into a central NGO database is an extremely labor­
intensive task which may be difficult to institutionalize in the Bank. Third,
NGOs may view this Bank effort to obtain information which can be fed into a
central database with suspicion. The net result may be alienation of NGOs.
          While it is not advisable for the Bank to exclusively rely on any
database for identifying and selecting NGOs, these rosters have served the
function of a good starting point for staff wishing to gather names and
addresses of NGO contacts in particular Asian countries.
2.        Networking with NGOs: Informal networking and building of contacts
with NGOs by Task Managers, Resident Mission staff, and country Department
staff is extremely important.
          The "test of voluntarism", which involves asking the NGO questions
such as the following, is an additional category of information (apart from
those categories already listed in the sub-section on the database) which may
be quite helpful to staff members in establishing the track record of an
intermediary NGO:
          (i) 	 Does the organization have a well-defined sense of its mission,
                and has there been continuity in its basic commitments over the
                years?
         (ii) 	 Is there evidence that the staff, and especially the leaders,
                work for the mission primarily because they believe in the
                mission?
        (iii) 	 Has the staff accepted adverse working conditions, when
                necessary, to pursue that mission - including working at
                salaries below the market rate for people of their education,
                ability and performance?
          These types of judgements are subjective and are unlikely to be
recorded in any computerized database. Since these tend to be governed by
personal experience and passed on by word of mouth, they are more likely to be
accumulated through informal networking with NGO contacts.
3.        Working through NGO Ouasi-Markets: It is suggested that publicity
may be given to Bank-supported projects where NGOs have a role to play through
NGO quasi-markets, thereby creating a demand for NGO services. Further, NGOs
willing to participate in Bank-supported projects may communicate this
intention to the Bank through the quasi-market mechanism, thereby providing a
supply of NGO services.
          The mating of demand and supply could either be accomplished through
a government apex organization (eg. CAPART in India) or through a NGO apex
organization (eg. ANGOC in the Philippines) or a Bank-NGO Committee or all
three. For example, according to one Bank report, much of the Bank
information on NGOs in Indonesia comes from the NGO apex organizations for
environment (WALHI) and population, health, and community welfare (FISKA).
4.        Utilizing NGO Information Svstems: A well-established NGO may be
contracted to conduct a field-level search to identify NGOs which meet the
                                     - 16 ­


relevant criteria for involvement in a particular project. This search may
utilize inter-NGO information systems and enable NGOs to identify each other.

          A case in point is that of the Integrated Watershed Project in India
where Development Alternatives was contracted to identify grassroots NGOs in
four states involved in common resource management activities. Similarly, the
WRAP Project will use PRADAN (an intermediary NGO) to identify other NGOs
working at the grassroots level.

          A weakness in this approach is that the lead NGO(s) is likely to
identify other NGOs of its own ilk ideologically or in its own networks. The
Bank and governments often want to work with a cross-section of NGOs which is
broader than existing NGO networks.

          Using these four strategies together should be emphasized, since
none is perfect by itself and each one reinforces the other. A case in point
is the National Sericulture Project in India. The Bank is attempting to
channel funds to NGOs through the Central Silk Board to implement sericulture
activities, and the project implementing agencies are relying primarily on
Department of Social Welfare NGO lists to identify NGOs which are to be
assisted. Apart from running the risk of working with GONGOs (government
organized - NGOs) , the project implementing agencies are also significantly
reducing the total population of NGOs they can collaborate with in this
project. Scrutinizing the EXITE and AS4CO databases, tapping the information
resources of NGO apex organizations (like AVARD) and the Bank-NGO Committee
(which has offered to provide a list of at least 20 sericulture NGOs to the
Bank), and utilizing the networks of a well-respected sericulture NGO (like
Asian Institute of Rural Development, Bangalore) are additional strategies
which may be employed by the implementing agencies to identify sericulture
NGOs. (Refer to Annex 2 for a detailed account of the National Sericulture
Project).

          To sum up, the Bank has formulated four well-defined strategies to
identify and select intermediary NGOs. These strategies, which have to be
employed in a mutually reinforcing manner include developing NGO databases,
networking informally with the NGO community, working through NGO demand and
supply mechanisms and utilizing inter-NGO information systems.


B.   MULTIPLE-ENTITY ISSUES: NGO-GOVERNMENT-BANK RELATIONSHIP


Question 5: How to facilitate Government-NGO relations?

           Generalizations about government-NGO relations are complicated by
the spectrum of orientations towards government found among NGOs, even within
a particular national setting. Differences also exist among governments in
both their commitment to pluralism and their ability to enforce their will,
resulting in a spectrum of government orientations towards NGOs in Asia.

          For example, government legislation coordinating indigenous NGOs in
Sri Lanka and the Philippines is minimal.   In India, the focus of registration
is monitoring of foreign donations to NGOs.   In Bangladesh, the government
goes further by asking for a review of NGO programs and their approval by a
standing committee.  In Nepal, a council not only coordinates but helps decide
on the priorities and programs of NGOs.   In Malaysia, NGOs have been subject
to police surveillance and several NGO leaders were arrested at a moment of
political tension. Similar differences can be detailed with regard to other
critical policies that various Asian governments formulate and implement
towards NGOs. Having made this important qualification about the diversity of
NGO and government orientations towards each other in Asia, one hard fact
needs to be emphatically stated. The Bank has to work with and through the
government in any country, whatever its orientation may be towards NGOs.
                                    - 17 ­


Therefore, the Bank cannot and should not try to "go around" the government by
working independently with NGOs.
           The government should be inclined to involve NGOs in the process of
development. This inclination to involve NGOs is an important precondition
for the Bank to encourage a cautious but willing government to walk faster on
the collaborative path it has already chosen. The existence of this
precondition in Asian countries has been rightly highlighted in numerous Bank
documents.
          For example, a recent Bank report indicates the willingness of the
Malaysian government to involve NGOs in the Non-Formal Education sector.
This willingness to involve NGOs on the part of the Malaysian government is
significant because it signals some relaxation of long-standing mistrust
between the government and NGOs in Malaysia. But what is even more critical,
and still remains to be tested in the case of Malaysia, is that government
commitment to NGO involvement must be sufficient to carry through to
implementation of the project, otherwise it may spell doom for the NGO-related
project. For example, the NGO component of the Municipal Development and
Housing Reconstruction project in Nepal ran into implementation difficulties
due to government reluctance.
          Given that the government of a particular country indicates to the
Bank that it is willing to support NGO involvement in the long-run, eight
strategies employed by the Bank to enhance government-NGO collaboration in
Asia are detailed. These are:
1.        Using Access to Government: It is suggested that the Bank may
"influence" the government in certain key policy areas to make Government-NGO
collaboration a highlighted issue. These key issues include government
accreditation and evaluation of NGOs; administration of government funds to
NGOsi tax and duty exemption for NGOs; regulation of foreign donations to
NGOsi provision of incentives for NGO activity like tax incentives that
encourage private voluntary financing of NGOs; creation of outreach desks
within government line agencies to liaise with NGOsi establishment of clear­
cut criteria for using NGOs as subcontractors in implementing Government
programs and decentralization to provincial and local levels of government
(which makes it easier for local NGOs to negotiate roles appropriate for local
situations) •
          For example, efforts have been recently made by the Bank to provide
for the legalization of grassroots groups so they can legitimately manage an
activity and eventually have ownership of it. Two projects in FY90, the India
Integrated Watershed Development (Plains) and Nepal Bhairawa Lumbini
Groundwater Irrigation III have provided for the legalization of irrigation
groups. In the India Project, user groups will be legalized through
appropriate legal arrangements to enable user management (jointly with local
government) of non-arable lands. In the Nepal Project, water user associations
would be legalized for deep tubewell operation and maintenance.
          The influence the Bank exercises is a double-edged sword, which has
to be wielded by the Bank with extreme caution. Governments may clamp down
harder on NGOs because the Bank is making an effort to create "space" within
which NGOs can operate. In Bangladesh, for example, the Bank tried to
overcome government sensitivities regarding NGOs with little success. If
anything, the trend in Bangladesh, for a period of time, was in the direction
of tightening the control on NGO activities.
2.         Undertaking Policy-Oriented Studies: It is advisable to undertake
policy development studies as a part of Economic and Sector Work to utilize
the budgetary resources available. The focus of such studies should be
threefold:
                                    - 18 ­

     (a) 	 Building Up Evidence of NGO Success Stories: IDA's evaluation of a
           number of Bangladeshi NGOs has indicated that the approaches used by
           them have been significantly rewarding (for example, BRAC and
           Grameen Bank); this is evidenced by high recovery rates of their
           credit programs and a significant improvement in the income of their
           borrowers.
          While these facts about BRAC and Grameen Bank should be widely
publicized, attention must also be given to expanding the sample of well­
documented NGO successes in the Bank. There seems to be an inclination in the
Bank to examine and re-examine the same NGO success stories again and again.
For example, this reviewer came across at least seven repetitive Bank studies
about the Grameen Bank and discovered that at least two more major Grameen
studies were under way. Apart from regenerating the same data allover again
and duplicating efforts, this tendency to focus on the "chosen few" among NGOs
creates an artificial divide in the NGO community among supposed "superstars"
and "extras".
     (b) 	 Building Up Evidence of Government-NGO Collaboration: Accumulating
           this evidence will assist the Bank in spelling out rationales for
           future Government-NGO collaboration. In Indonesia, for example, the
           Bank's Poverty Assessment and Strategy Report notes the
           contributions which community groups have made and urges government
           to allow more scope for community initiative and participation.
     (c) 	 Operationalizing Measures for Fostering Government-NGO
           Collaboration: It is critical to keep in mind that good intentions
           on the part of the Bank staff to foster closer ties between the
           government and NGOs are necessary but not sufficient. These good
           intentions have to be backed up by mechanisms which can
           operationalize these intentions into reality.
          A case in point is the Health Sector study in India which focused on
patterns for collaboration which would facilitate improvements in both
quantity and quality of Government-NGO collaboration in health and family
planning. A similar study of municipal institutions, including their
relationship with NGOs, is proposed in the Urban Health and Nutrition Project
in the Philippines to provide baseline information from which existing
institutional relationships will be strengthened as well as new ones created.
The Bank reports on Nepal and Indonesia highlighted this issue by including a
section on NGOs, with suggestions for Government and NGOs regarding concrete
steps to further strengthen NGO impact.
3.        Sponsoring Trilateral Forums: Since Bank involvement with NGOs
always depends on the concurrence of the government concerned, Bank support
for "trilateral" (government-Bank-NGO) meetings has proved to be one of the
more fruitful approaches. One example is the Nusa Tenggara Agricultural
Support Project in Indonesia which was stimulated in part by a trilateral
workshop on "Participation of NGOs in the National Development Process in
Indonesia" held in Indonesia, in 1985. The meeting, co-financed by the Ford
Foundation and the Bank, was one of the first steps toward a more
collaborative relationship between the Indonesian Government and NGOs.
          To avoid duplication among NGO and Government efforts in Family
Planning and Health, trilateral workshops were organized in the Philippines.
A similar workshop was organized by the Bank's Population, Health, and
Nutrition unit on "Urban Family Welfare Strategies" in Bangalore, in India.
          But, in some situations, when NGOs have reason to be fearful of
government, formal or informal meetings between Bank staff and NGOs may be
more candid and fruitful than government-Bank-NGO meetings.
4.        Sponsoring Workshops to Sensitize Senior Officials: State policy is
crucial in determining the character and capacity of grassroots growth.
                                    - 19 ­


Therefore, efforts of the Bank to sensitize "those who matter" in formulating
and implementing state policy may help create a "space" for NGOs to perform on
the national development stage.
          The Bank's Economic Development Institute, for example, is planning
an International Training Program to strengthen the participation of NGOs in
development programs. This is not a training program in the sense of
communicating skills. Instead the emphasis will be placed on changing
attitudes of senior government officials towards the involvement of NGOs.
5.        Using Existing Training Seminars to Sensitize Lower Officials: The
Non-Formal Education Project in Malaysia proposes to sensitize local
government line agency staff to participatory development paradigms.
Sensitizing lower layers of government is essential since local officials
directly deal with NGOs in day to day operations. These officials are more
likely to be uncooperative with NGOs as they view NGO involvement as usurping
their responsibility. The Project Performance Audit Report for the India
Dairy Project states that "without (state government's) negative influences,
the outcome of Operation Flood and the Bank-assisted project doubtless would
have been greater than that actually attained."
6.        Encouraging Movement of NGO Staff into Government Line Agencies:
This integration of staff was attempted in the Central Visayas Regional
Project (CVRP) in order to merge the two teams (government line agencies and
NGOs) under a single line of decision making at the local level. Projects
which run semi-independently through consulting contracts (for NGOs) may not
be regarded as "owned" by the line agencies concerned. This may work strongly
against the goals of sustainability and replicability (as government
programs). Therefore, movement of NGO staff into government line agencies, as
was successfully attempted in the CVRP, injects a sense of "ownership"
directly into line agencies.
7.        Using "Incentives" to "Buy" Cooperation: Until recently, for
example, civil service salary scales in the Philippines were quite low.
Consequently, the best government permanent staff quite frequently
supplemented their salaries through outside consultancies, membership on
committees of organizations which paid honoraria, etc. Travel allowances also
became a device for supplementing official pay when extra effort was required
of government personnel (even the government departments concerned paid such
allowances). The CVRP used such "incentives" to "buy" cooperative effort from
line agency staff in NGO-related components.
          A problem with this approach is that bolstering the salar~es of l~ne
agency staff selectively may result in intra- and inter- l~ne agency staff
resentment. Also, from the point of view of replicability of the project
"buying" cooperation may prove to be an expensive exercise.
8.        By Creating NGO Liaison Units: Under the West Bengal Fourth
Population project, the Government of West Bengal created a voluntary Agency
Cell, headed by the Additional Director of Health Services, which is
responsible for facilitating, supporting, and coordinating voluntary agency
activities in the state. With the establishment of this Cell, it is expected
that the role and scope of NGOs in the West Bengal family welfare program will
be substantially increased.
           To sum up, the primary relationship of the Bank is with governments
and not with NGOs. In case a government is willing to work with NGOs, eight
strategies have been adapted by the Bank in Asia to facilitate government-NGO
relations.
                                    - 20 ­


Question 6; How to facilitate ROO-Bank relations?
          EXITE's NGO work-strategy Discussion Paper (March 8, 1989) stresses
that improved collaboration between Government and NGOs is much more important
to the effectiveness of the development process than direct NGO-Bank
relations. Any steps taken to develop and cement NGO-Bank relations must be
taken keeping in mind that these are only possible with the consent of the
government.
          Having reiterated the importance of the role played by the
governmant in determining the relationship between the Bank and NGOs, nine
strategies may be employed by the Bank to strengthen NGO-Bank relations in
Asia. ~hese strategies are:
1.        Hiring a Local Institutional Development Specialist: Informal
networking and building of partnerships with the NGO community by the Resident
Mission staff, country Department staff, and Task Managers have been hitherto
undertaken on a case by case basis in Asia. One way of institutionalizing
this necessary contact building exercise would be to assign at least one staff
member (preferably a local able to serve as a bridge between the Bank and the
NGO community) in the Resident Mission the responsibility (and the associated
rewards) to network with NGOs, to monitor Government-NGO relations, and to
help Task Managers design, implement, and monitor NGO-COmponents of Bank­
supported projects.
          Apart from hiring a local institutional development specialist, the
Bank is also urged to give incentives to other staff to work with NGOs, not
replaCing but reinforcing commitment. This implies revisions in the budgeting
of time and money - as well as the criteria which are brought to bear on staff
evaluation. Staff associated with NGO-related assignments should be able to
spend more staff hours and have incentives to innovate. These incentives do
not necessarily have to be remunerative. Signals and recognition from
management would be important steps in the right direction.
2.        Targeting Key NGO Individuals: Th~ NGO community in each Asian
country is strongly influenced by certain key individuals. The Bank should
identify these key individuals and foster close relationships with them.
Failure to form these important partnerships may someti~es prove to be costly
for the Bank. An easy way to avoid incurring these unnecessary costs may be
to compile an inventory of key NGO-related contacts. In fact, EXITE has
identified some especially influential NGOs worldwide and is sending them
periodic mailings. Asia staff may use and revise the Asian NGO names that are
on this list.
3.        Establishing and Co-ordinating Bank-NGO Committees: A case in point
is that of the Bank-NGO Consultation Committee in India which was created to
provide the Bank with a forum for routine discussion with a varied sample of
Indian NGO leaders and currently serves three useful functions.
          First, regular meetings of the Bank-NGO Committee (India) are held
at the New Delhi Office (NOO) once prior to the World Bank-NGO (Global) Full
Committee meeting and twice prior to the two steering Committee meetings.
This provides a mechanism for feeding India-specific Bank-related NCO concerns
into the Global Committee. Another reason for organizing meetings prior to
Global meetings is that the progress of the India Committee is reported to the
Global Committee.
          second, several sector-specific meetings have been organized between
the Bank staff and NGO members. Selected environmentalist NGOs met with the
Senior Vice President (25 October, 1988), population and human resources NGOs
met with the Division Chief, Population and Human Resources (25 January,
1989), environmentalist NGOs met with the Director, Environment Department (28
April, 1989), NGOs working in the field of Forestry and Wasteland Development
met with the Bank Mission on the subject (13 July, 1989), cross-sectoral NOOs
                                    - 21 ­

met with Executive Director, India, just prior to his joining the Bank (20
July, 1989), NGOs working on women issues met with Bank staff dealing with
Gender and Poverty issues (24 October, 1989), etc. While these sector­
specific consultations lead to a useful exchange of perspectives, some NGOs
suggest that institutionalizing a formal follow-up mechanism may provide the
necessary "bite" to this exchange.
           Third, attempts are being made through the Bank-NGO committee to
organize consultations of the Bank staff with grassroots organizations in the
field. A NGO representative organized consultation of a Bank Mission with
local people in the Himalayan region. This meeting increased the awareness of
local people about the conditionalities of the Bank's Watershed Management
Project. The staff of the project implementing agency became more careful as
they felt that beneficiaries were monitoring them. In fact, as a follow-up to
the visit of the Mission, NGOs organized a training program to assist project
implementing agency staff to actively take into account beneficiary needs.
This directly resulted in beneficiaries having a "say" in the species being
planted under the project. The NDO is urged to inform NGOs in advance about
when a Bank Mission is expected to visit India. The timely availability of
such basic information provides NGOs on the Committee with the lead-time
necessary to organize meetings between the Mission and their local partners in
the field.
4.        Establishing NGO-Bank staff Exchange Programs: One way of
institutionalizing the relationship between NGOs and the Bank would be to
create a limited number of positions in the operational departments of the
Bank, which may be permanently filled, but on a rotating basis, by staff from
indigenous NGOs. The other aspect of this arrangement would be a process
whereby Bank staff could systematically be exposed to a period of work at the
grassroots in NGOs, as part of the Young Professionals Program, for example,
but also for mid-career staff.
5.        Involving NGOs in Policy Formulation: It would be highly desirable
if NGOs are involved in the upstream stages of policy formulation, not merely
relegated to a role in their execution. Consultation with NGOs on social
costs of adjustment policy questions may elicit important insights and develop
political support for the adjustment program generally, and especially for its
anti-poverty dimensions.
          In Nepal, for example, the Bank consulted with several NGOs during
the Social sector Review and sought their view on the suitability of some of
the policy reform recommendations. Similarly, in the Education sector Review
in Bangladesh there were extensive consultations with NGOs to investigate
opportunities for reaching the extremely poor through NGO sponsored non-formal
education. An innovative attempt to involve NGOs upstream in policy
formulation was recently tested in the Metropolitan Environmental Improvement
Program (MEIP). On a recent MEIP mission to Sri Lanka, a member of the
Environment Foundation, an active Sri Lankan NGO, was contracted to accompany
Bank staff members in their policy dialogue with senior government officials.
6.        Assaying and Disseminating NGO Literature: It may be desirable for
the Bank to create a structured dissemination process of NGO literature for
its operations and policy formulation staff. For example, in Indonesia, the
INGI study on the Kedung Ombo dam documented problems there nearly a year
before they became an explosive issue. This 1987 INGI study detailed that a
large percentage of the affected 5390 families were refusing to migrate from
the 37 villages comprising the project area. Yet not all the Bank staff who
were working in areas related to the INGI studies on Bank-supported efforts in
nucleus estates, shrimp for export, and the Kedung Ombo dam were aware of
these studies.
7.        Sponsoring Participatory Pilot Projects: The Bank is limited in its
ability to directly deal with grassroots organizations and therefore has to
reach them through intermediaries, often NGOs. Given this limitation, it is
                                    - 22 ­

still necessary for the Bank to sponsor special pilot projects, in cooperation
with intermediary NGOs, to learn how to facilitate the most effective
strategies that may be employed by intermediary NGOs to strengthen the
participatory nature of grassroots organizations. Required, therefore, in the
Bank, is a considerable increase in experimentation, a number of false starts
and a willingness to change current practice.
8.        Scaling and Multiplying NGO Efforts: NGO critics argue that, unless
the Bank is willing to change its current practices determined by the tight
constraints on Bank staff-time per dollar of lending, the Bank will continue
to have limited ability to initiate the aforementioned micro-level pilot
action. In this case, the comparative advantage of the Bank will remain in
appraising and financing rather than innovating and implementing at the micro­
level. Thus, the direction the Bank chooses to take, in the absence of any
dramatic change in its current practices, may be to "buy into a good thing",
not necessarily to create it. This would involve:
     (a) 	 identifying and understanding successful small-scale efforts led by
           NGOs or other institutions;
     (b) 	 scaling up the small efforts to a larger scale; or
     (c) 	 enabling a "thousand flowers to bloom" by supporting replication of
           successful but small efforts.
          It should be stressed that identifying and understanding which NGO
effort may be successfully scaled up or multiplied is no mean task.   Purther,
drawing NGOs into the project cycle without co-opting (and hence alienating)
them is a delicate task which has to be performed in order to forge
"partnership" type working relationship between the Bank and NGOs. This can
be done by creating a strong sense of ownership among NGOs about the
mechanisms of the project.
          The WRAP project proposes that a workshop conducted by a NGO
(PRADAN) for other NGOs (selected by PRADAN) would serve as the central device
through which actual mechanisms to be used in the project would be designed.
It is of utmost importance that the consortium of NGOs will be formed by NGOs
themselves (in this case PRADAN). The Bank is correctly limiting its role to
that of a catalyst because a Bank attempt to impose an arrangement among NGOs
may create divisiveness among those organizations and resentment towards the
Bank.
          Pinally, how the scaling up and multiplication operation of the
successful pilot project is conducted is critical because dealing with small,
widely dispersed schemes requires scaling down of the Bank's operations. The
Bank can learn a great deal about "how to scale down in order to scale up"
from the experience of some Asian NGOs. These NGOs successfully demonstrate
that it is possible to work effectively with the poor starting at the village
level and expanding to the national level. Por example, BRAe (a Bangladeshi
NGO) has scaled up its oral rehydration training programs to cover 90\ of the
households in Bangladesh. Similarly, Sarvodaya (a Sri Lankan NGO) has
successfully multiplied its community development efforts from a handful of
shramdana camps in the 1950s to over 5000 villages in all parts of Sri Lanka,
including the ethnic strife stricken North and the East, in the late 1980s.
9.        Utilizing Punding, Accounting and Evaluation Procedures: The
flexibility of Bank funding, accounting, and evaluation procedures may be
utilized to adapt them for Bank collaboration with NGOs. These three
procedural points will be discussed as part of the separate sub-chapter
dealing with "intra-entity" issues.
                                     - 23 ­


C.   INTRA-ENTITY ISSUES: NGO-RELATED PROCEDURES OF THE BANK

Que.tion 71   Bow to use Bank funding procedure. to work with MOOs?

          This section on Bank funding procedures will be divided into two
sub-sections. The first sub-section will deal with funding imperatives and the
second sub-section will deal with funding mechanisms.
1.        Funding Imperatives: Three points need to be emphasized about Bank
funding imperatives concerning NGO-related activity. These are:
      (a) 	 Yardstick to Judge Success: The primary reason for involving NGOs
            in Bank-supported projects is to work through an alternative
            institutional mechanism in order to target marginalized sectors of
            the population and ameliorate their conditions. Thus, the prime
            yardstick for evaluating NGO-related Bank projects should be the
            facilitation of the process to alleviate poverty.
          A case in point is the Bangladesh Poverty Alleviation Project. The
outcome of this project is the subject of considerable debate within the Bank.
Some Bank staff believe that the project did not achieve it's essential
objective as no loan was negotiated and approved. These staff members argue
that ultimately the Bank ~s a "bank" and its primary business is to disburse
loans.
          Others argue that vis a vis the "development barometer", this
project achieved two highly desirable objectives. The two major objectives of
the project were to influence the government to deregulate NGOs and to
establish a semi-autonomous NGO Foundation. Both goals were accomplished,
largely due to the efforts of the Bank staff. Further, these Bank officials
argue that for the Bank's vision to be enduring, it would be preferable to
ensure that the Foundation's resources for poverty alleviation were self­
sustaining and self-replenishing. Thus, they argue that the Bangladesh
Project achieved its two major objectives of making the environment for NGO
activity less constrained and of establishing a self-sustaining and self­
replenishing Foundation.
          In fact, several senior staff members in the Bank are of the opinion
that the Foundation is going to seek support from the Bank at a later date
when it feels that it has built the capacity to absorb a large financial
package. The refusal of the Foundation to accept a large loan at the moment
of its creation may be seen as a sign of the potential strength of an
institution which the Bank help set up. It demonstrates the ability of the
Foundation to realistically evaluate the limitations of its own capacity to
channel such large amounts of money at this point of time.
      (b) 	 Smaller Loans for Longer Time Periods: There are four reasons for
            emphasizing disbursements of smaller amounts of money to NGOs.
            First, NGOs may have a limited capacity to absorb money.
          Second, NGOs are extremely cautious about maintaining their
independence. The good intentions of the Bank to give them a large loan may
be construed by NGOs as an effort to co-opt them.
          Third, NGOs may not want to rely exclusively on Bank funds, as it
may be difficult for NGOs to sustain activity after the Bank stops providing
funds.
          Fourth, NGO-related projects or project components are typically
very inexpensive, partly because they consist mostly of assistance in
organizing communities and partly because the best NGOs are usually interested
in developing community self-reliance (as opposed to dependence, which is
probably the main source of sustainability of the best NCO projects).
                                    - 24 ­


Projects in which the NGO role is central (for example, where sustained [not
subsidized] adoption of new practices by households is the central objective)
may have difficulty in finding things to disburse large sums against without
destroying the very self-reliance which NGOs are supposed to instill.
          This may call for some modification of typical Bank project design.
For example, in the Philippines Environment and Natural Resource SECAL/HYBRID
Project, an attempt is being made to (a) limit the "goodies" which project
beneficiaries typically receive; (b) make them non-automatic (for example, not
targeted on specific communities, but available for qualified applicant
communities, whether or not target sites); and (c) make them the fruit of
successful community organization by requiring community contributions of
labor and a "qualified" grassroots organization as applicant or guarantor.
However, all these innovations make for a lower-cost and slower-disbursing
project.
     (c) 	 Pre-Project Funding: In projects where NGOs are involved there is
           usually the need for pre-implementation community organizing
           activities. This implies that Bank-supported projects either should
           recognize that full implementation and disbursement will be delayed
           by necessity for organization, or should seek pre-project funding
           (from another agency) for community organizing work during project
           preparation stage. As there is a country cost to having a Bank loan
           committed but unused (commitment charges), the latter is preferable.
          The Asian Development Bank has used its grant TA funding for such
preparation activities, but the World Bank management has so far decided
against significant grant funding to NGOs for operational purposes, even when
it would help them contribute to regular Bank-supported projects.
          To sum up, it may be appropriate for the Bank to consider quantity
of loan disbursed as only a minor indicator of the success of NGO-related
projects, since these projects emphasize self-financing and self-development
and usually require small loans over long periods of time. NGO-related
projects may also require pre-project funding due to pre-implementation
community organizing activities they undertake.
2.        Funding Mechanisms: IBRD loans and IDA credits are made to member
governments, which then pass funds on to public or private implementing
agencies like NGOs. NGOs may not like this arrangement. Their primary
objection is not to receiving funds through government channels but to
receiving funds which are subject to normal government procedures, which are
often dilatory, inefficient, intrusive, and on occasion expensive. Therefore,
channelling Bank funds through government agencies may be acceptable to NGOs,
provided that procedures for access to, and utilizing, such funds are
transparent, efficient, and objective, the objectives are pre-determined, and
the government can be kept out of the day-to-day affairs of NGOS.
          For example, a Preliminary Progress Review indicates that in the
Philippines Health Development Project collaboration between government line
agencies and NGOs is not working out as smoothly as was hoped by the project
designers. The momentum of this component has been adversely affected in two
provinces by delays in the preparation of proposals for the initial planning
phase and in the processing of grants once the proposals have been made (6
months and 5 weeks, respectively). This delay has been attributed to the fact
that the good intentions of the project designers to channel Bank funds to
NGOs through government agencies were not backed by specific mechanisms to
operationalize these intentions. In this case, no clear-cut guidelines were
prepared to assist NGOs to make proposals and the process of reviewing
proposals at the Department of Health was not streamlined.
          Similarly, in the National Sericulture Project in India funds are to
be disbursed to support NGO operations in sericulture, but the mechanisms to
decentralize the financial structure of the central silk Board, to facilitate
                                      - 2S ­


the preparation of proposals by NGOs, and to streamline the processing of
grants by the State silk Board Committees have not been worked out. (Refer to
Annex 2).
          The lesson to be learned from the Philippines Health Development
Project and the Indian Sericulture Project is that government project
implementing agencies, whether the Philippines Health Department or the Indian
Central Silk Board, usually lack extensive experience working with NCOs before
the Bank-supported projects, and tend to assume, naturally but incorrectly,
that NGOs can be incorporated in their operations by following a "business as
usual" approach. Therefore, the nuts-and-bolts of developing the process of
channelling Bank funds to NGOs through government agencies need to be
adequately appraised by the Bank staff. Keeping in mind the need to develop
streamlined funding mechanisms, the following funding mechanisms will be
elaborated in this sub-section:
     (a) 	 Funds to NGOs as Consultants: The Bank has channeled funds to NCOs
           by hiring them as consultants on a contractual basis. The Bank's
           official co-financing office is committed to arranging trust fund
           monies to hire developing country NGOs as consultants, and several
           industrial country trust funds allow the Bank to do so.
     (b) 	 Funds to NGOs through other NGOs: For example, in India, in the
           Gujarat Water Supply and sewage Project, the Gujarat Water Board,
           backed by active support from the Bank, contracted a NCO as a
           consultant. This NGO contracted 62 other grassroots NGOs to set up
           latrines in Gujarat. The grassroots groups were given the
           additional incentive of receiving Rs.1DD for every latrine they set
           up (by the contractor NGO).
     (C) 	   Funds to NGOs through Centralized Institutions: The Bank has
             attempted to strengthen existing government institutions in order
             to channel funds to NGOs. A case in point is the WRAP project. The
             Council of people's Action and Rural Technology (CAPART) is a wing
             of the Indian Ministry of Rural Development but does not indicate
             this on its letterhead. CAPART has managed to maintain reasonable
             legitimacy among the diverse Indian NGO community by keeping the
             profile of a quasi-NGO and is often called a QUANGO. It disburses
             funds directly to NGOs for projects related to rural development
             including programs to organize the poor. The WRAP project intends
             to make block grants to CAPART which in turn could make smaller
             grants to regional and local NGOs. This project aims to strengthen
             CAPARTs capacity to perform this task by streamlining CAPART
             procedures for grant making. Further, an attempt will be made to
             give CAPART a local presence (not just in Delhi), so that many
             "pygmy" CAPARTs can directly reach NGOs in their program areas,
             where one "giant" CAPART is now unable to.
     (d) 	 Funds to NGOs through Decentralized Mechanisms: The Bank has
           encouraged central governments to establish funds at the local level
           (district) which can be utilized by government line agencies, local
           government units, and NGOs depending on their comparative advantage
           at performing various functions. For example, in the Philippines
           Health Development Project, a Community Health Development fund is
           now operational. This is possible in the Philippines because the
           existing health financial system is already decentralized to the
           district level. This high level of decentralization provides a base
           upon which the Bank can build such a fund at the district level in
           the Philippines.
     (e) 	 Funds to NGOs through External Institutions: The Bank may attempt
           to set up external (to the government) funding mechanisms. I argue
           that setting up "new" institutions should be the last option
           exercised by the Bank. Even where these new institutions work, they
                                      -   26 ­


           may function because they have been staffed and resourced at the
           expense of existing ones. Therefore, attempts to establish external
           funds should be made, not in opposition to existing institutions,
           but where institutional mechanisms already exist upon which these
           funds may be firmly built.
          For example, a new semi-autonomous social investment fund may be
possible in the Philippines because of the political will for such a fund,
close relationship between the NGO community and the government, and the
existing institutions in place upon which such a fund may be erected.
          President Aquino demonstrated political will by publicly asking the
Department of Finance to study the feasibility of a Social Transformation
Foundation. Further, NGO leaders have joined President Aquino's government in
both the traditional government departments, in new commissions, and various
task forces set up to suggest and implement developmental reforms. Moreover,
there already exist well-functioning semi-autonomous NGO funds in the
Philippines which may be merged to form this social investment fund. Since
these already existing funds have gathered some momentum, the fund created by
merging them will not have to build absorptive capacity to channel large funds
from scratch. Finally, there exist decentralized mechanisms which may be
utilized for channeling support to NGOs at the provincial level in the
Philippines. Similarly, the Bank is considering supporting a fund in the Non­
Formal Education Sector in Malaysia, which can be firmly grounded in the
existing institutions and political will.
       (f) 	 Funds to NGOs through other Donors: The Bank has requested other
             bilateral, like CIDA, or multilateral, like UNDP, donors to make
             grants directly to NGOs (co-finance or parallel finance NGO
             activities) because of their emphasis and comparative advantage in
             this area.
       (g) 	 Funds to NGOs Directly: The Bank does disburse $400,000 a year,
             mainly to NGOs, through its External Grants Program, which is
             administered by EXITE. This program is focused on supporting
             contributions to development policy debates. It is of limited use
             for normal operational work, but has funded policy work by
             indigenous NGOs in Nepal and Thailand for example, upon the
             recommendations of operational staff. In FY 90, the Bank also made
             several grants through the Women in Development (WID) Division to
             institutions working on women-in-development issues, one of which
             was in Nepal.
          To sum up, the funding mechanisms the Bank uses to channel funds to
NGOs in Asia are contracting NGOs as consultants, channelling funds through
centralized and decentralized mechanisms, building upon existing institutions,
requesting other donors to co-finance or parallel finance NGO activities, and
directly funding NGO-related policy work.

Question 8: How to use Bank accountinq procedures to work with lGOs?
1.        Ex-Ante Agreement on NGO Accounting Requirements: Operational
Directive 14.70, on cooperation with NGOs, includes advise on appropriate
accounting and auditing procedures when NGOs receive funds from Bank-financed
projects. In any case, itlis advisable that an agreement on mutually
acceptable procedures should be reached by the Bank Regional Auditing Advisor
and his NGO counterpart before the NGO becomes formally involved with the
project. If this agreement is left until the end of the project then it may
become extremely difficult for the Bank to verify how funds were used by the
IGO.

          For example, in the Korean population Project the NGO kept yearly
composite accounts of all its projects, while the Bank wanted to see separate
                                     - 27 ­

accounts for the particular Bank-supported project. Since no ex-ante
agreement had been reached on how the NGO would keep the accounts it was too
late for the Bank to obtain the necessary information.
2.        Balancing NGO Accountability and NGO Freedom: NGOs fearing that
their autonomy is being threatened may not want to reveal their accounts to
the government and therefore to the Bank.
          On the other hand, accounting transparency helps to reduce abuses,
and the Bank and the government have a right as well as a responsibility to
insist on transparency of NGO accounting received from a Bank-financed
project.
          The degree of information revealed by the NGO should meet the
requirement of public scrutiny without compromiSing on the independence of the
NGO. A suggestion in this context would be that the Bank and the government
be allowed to examine the accounts for that particular project, but not all
the NGO's account.
          Maintaining the balance between keeping the NGO accounts transparent
and building adequate checks on the power of the government to interfere in
the affairs of the NGO is a delicate exercise. The nitty-gritty of this
should be agreed upon to the mutual satisfaction of the Bank, government, and
NGO at the very outset of the project.

Question 9:   Bow to use Bank evaluation procedures to work with ROO'?
          The environment within which NGOs function, especially in Asia,
today is relatively resource rich. Private funding agencies as well as the
state are keen to finance grassroots NGOs, especially those who are
politically non-controversial and whose work is development-oriented. As a
result, the survival of NGOs may become delinked from their performance.
Further, the poor as the client system for development NGOs are not prone to
or in a position to put pressure on NGOs to perform. Given such a context, it
is necessary to build surrogate pressures for performance on NGOs not provided
by the market.
          The Bank has a critical role to play in applying such pressures for
performance on NGOs by developing and applying relevant monitoring system. to
NGO-related components of Bank-supported projects. There are three critical
issues underlying the development and application of NGO evaluation and
monitoring systems by the Bank. These are:
1.        Integrating Ouantitative and Qualitative Methodologies: The Bank
tends to have a quantitative bias in its monitoring and evaluation
methodologies. Many members of the NGO community believe that there is a
limit to the usefulness of assessing the effectiveness of their contribution.
merely according to quantifiable criteria, since qualitative objective. are
equally important -enhancing self-confidence of the poor, increasing their
participation in critical decisions that affect their lives, furthering their
awareness of wider structural problems underlying poverty, and empowering them
to take action to confront these.
          Quantitative indicators need to be supplemented by qualitative
methods which are collected by conducting field-level studies. Informal self­
evaluations by the beneficiaries, dialogue among themselves, and with
personnel of indigenous NGOs overseeing the projects are means of providing
the numbers which the Bank collects with meaning, representing the perspective
of those about whom understanding is sought.
          Therefore, qualitative methods should be designed to provide both
credible data which can be quantified and the more in-depth explanation of the
various and diverse factors, both cultural and otherwise, that explain and
                                    -   28 ­


give meaning to the facts. In fact, the issue regarding the incorporation of
qualitative along with quantitative learning in the Asia Region is not one of
feasibility but rather widespread adoption leading to eventual
institutionalization. Several research methods which integrate quantitative
and qualitative methods of learning have been used successfully in the Asia
Region, including rapid rural appraisal, social feasibility analysis,
beneficiary assessment ( which has been used in projects in India, Thailand,
and the Philippines), and process documentation. For example, the WID unit is
currently designing a proposal to do process documentation and impact
monitoring of innovative NGO credit programs (several in Asia) using in-depth
qualitative data with quantitative indicators about payment rates, loan size,
coveraga, etc.
2.        Time Dimension of Evaluation: Bank-supported projects often take
seven to eight years to complete after the loan has been approved. The Bank
usually conducts an evaluation six months after project completion (i.e., a
PCR). PCRs only make updated projections of future benefits based on trends
which can be observed at project completion. Many development practitioners
argue that participatory development (the process which NGOs are attempting to
implement) is a longer-term process. Components of NGO work like community
building, empowering local communities, and non-formal education are usually
barely complete by project closing, and any linkages to project economic
benefits may have had too little time to show themselves.
           For example, in the past, in the Population Sector, NGO activities
have been evaluated in terms of numbers of sterilizations and/or acceptors
motivated - an approach that NGOs find narrow and restrictive. NGO efforts to
mobilize women's groups as a step toward increasing demand for and utilization
of family planning services may not "payoff" in terms of new acceptors in the
time frame the Bank typically assesses "target achievements". Therefore, an
ex-post field-level assessment several years after the PCR is highly
desirable.
          There is a provision in the Bank for subsequent project audits some
years after project completion, but it is us~d. Such assessments may be
possible specially in cases where the Bank is involved with a NGO for a series
of projects for a period of 15-20 years.
3.        Institutionalizing Self-Evaluation in NGOs: E.fforts should be made
by the Bank to assist NGOs in their efforts to institutionalize self­
evaluation methods like participative review meetings, introduction of
planning systems, and demand-oriented response systems.
          Institutionalizing self-evaluation methods in NGOs, with whom the
Bank is engaged in a long-term relationship, will have a payoff in terms of
contributing to the Bank's efforts to monitor and evaluate the efficacy of
these NGOS in Bank-supported projects. Finally, if the Bank assists certain
NGOs in developing monitoring and evaluation techniques, it may be inclined to
pro-actively contract these NGOs to monitor and evaluate Bank-supported
projects. Utilizing NGO monitoring and evaluation skills is a critical
development resource which must be better deployed by the Bank tn Asia.
          To sum up, the Bank has an important role to play in applying
pressures for performance on NGOs by developing and applying relevant
monitoring and evaluation systems to NGO-related components of Bank-supported
projects. These monitoring and evaluation systems should attempt to integrate
quantitative and qualitative methodologies, and institutionalize these
methodologies in NGOs, especially in those NGOs with whom the Bank is involved
in a long-term relationship.
                                    - 29 ­

                                                                 ANNEX 1
                                                                 Page 1 of 2

      Sector-Specific Distribution of 39 Bank-supported Projects in Asia

1.        Population, Health and Nutrition: West Bengal Fourth Population 

Project (India) (Cr.'1623); Population Project V (India) (Cr.'1931); 

Population Project VII (India) (Cr.'2133, Ln.'3199); Population and Health 

project II (Bangladesh) (Cr.'92l); Population and Health Project III 

(Bangladesh) (Cr.'1649); Second Nutrition and Community Health Project 

(Indonesia) (Ln.'2636); Health Development Project (Philippines) (Ln.'3099);

Urban Health and Nutrition Project (Philippines).; First Population Project 

(Korea) (Ln.'1774-5). 

2.        Irrigation and Resettlement: Sardar Sarovar Project (India) 

(Cr.'1552, Ln.'2497); Upper Krishna II Irrigation Project (India) (Cr.'3030,

Ln.'20l0); Bhairawa Lumbini Groundwater Irrigation III project (Nepal) (Cr. 

2144); Transmigration project (Indonesia) (Ln.'2288); Kedung ambo Multipurpose 

Dam and Irrigation Project (Indonesia) (Ln.'2543); Irrigation Sub Sector 

project (Indonesia) (Ln.'2880); Philippines Communal Irrigation Administration 

Project (Philippines) (Ln.'2173). 

3.        Urban Development and Water Supply: Municipal Development and 

Housing Reconstruction project (Nepal) (Cr.'1988); Jabotabek Urban Development 

(Indonesia) (Ln.,2932); Yogyakarta Rural Development (Indonesia) (Cr.'946); 

Jakarta Sewerage and Sanitation Project (Indonesia) (Ln'2236); Third Urban 

Development project (Philippines) (Ln.'l82l). 

4.        Environment: Metropolitan Environmental Improvement Program (Sri 

Lanka)·; Sabah Land Settlement and Environmental project (Malaysia) 

(Ln.'3039); Philippines Environment and Natural Resource SECAL/HYBRID Project 

(Philippines)·. 

5.        Common Resource Management: Watershed Development Project in Hills 

(India) (Cr.'2l00, Ln.,3l75); Watershed Development project in Plains (India) 

(Cr.'213l, Ln.'3l97); Central Visayas Regional project (Philippines) 

(Ln.'2360). 

6.        Agricultural Productivity and Credit: Poverty Alleviation and Rural 

Employment (Bangladesh)., Rural Development II (Bangladesh) (Cr.'1384), Nusa 

Tenggara Agricultural Support Project (Indonesia) (Ln.'2638). 

7.        Micro Enterprise: Dairy Project (India) (Cr.'1859, Ln.'2893); 

National Sericulture project (India) (Cr.'2022, Ln.'3065); Shrimp Culture 

project (Bangladesh) (Cr.'l65l). 

                                        - 30 ­


                                                                     ANNEX 1
                                                                     Paqe 2 of 2

8.        Bducation: Semi-Formal Literacy Project (Halaysia)*; Second
Elementary Bducation Project (Philippines)*.
9.        Rural Water Supply and Sanitation: Gujarat Water Supply (India)
(Cr.,1280).
10.       Women in Development: Women in Rural Administration and Poverty
Project (India)*.
11.       Forestry: Second Forestry Institutions and Conservation Project
(Indonesia) (Ln.,3243).
12.           Bnergy: Second Sinqrauli Thermal Power Project (India) (Cr.' 1027).

*   I   Credits aDd/or Loa.s have .ot bee. approved yet.
                                    - 31 ­


                                                                  ANNEX 2
                                                                  Page 1 of 3

               Preliminary Review of the NGO-component of the 

                     National Sericulture Pr01ect (India) 

1.         As a part of my project on the role of NGOs in Asia, I visited the
New Delhi Office (NOO) of the World Bank, on a privately-financed trip, from
September 1 to September 21, 1990. My Terms of Reference for the India trip
stated that I discuss with the RDO staff the current status of the NGO­
component of the National Sericulture Project, after analyzing pertinent NDO
documents.
2.        The NGO-component of this project is designed to expand NGO
activities in sericulture in five states in India. These sericulture
activities are: promoting participation of women, landless, and other
underprivileged groups in sericulture, obtaining access to cultivable
wasteland for mulberry cultivation, organizing groups to adopt improved
equipment for rearing, silk utilization, establishing chawki rearing centers,
etc. The Bank will channel funds to NGOs through the Central Silk Board (CSB)
to implement these sericulture activities. This is the first Bank-financed
Agricultural Project in India where Bank funds are directly supporting RGO
activities.
3.        The CSB and the states are relying primarily on Department of Social
Welfare RGO lists to identify NGOs which are to be assisted in the five
states. Some members of the Indian RGO community with whom I spoke argue that
apart from running the risk of working with GONGOs (government organized -
RGOs), the project agencies are also significantly reducing the total
population of NGOs they can collaborate with in sericulture. Scrutinizing the
EXITE and AS4CO databases, tapping the information resources of NGO apex
organizations (like AVARD) and the Bank-NGO committee (which has offered to
provide a list of at least 20 sericulture NGOs to the Bank), and utilizing the
networks of a well-respected sericulture NGO (like Asian Institute of Rural
Development, Bangalore) are additional strategies which may be employed by the
project agencies to identify sericulture NGOs.
4.        Further, although funds are to be channelled through the CSB to
NGOs, the mechanisms, to decentralize the financial structure of the CSB, to
facilitate the preparation of proposals by NGOs, and to streamline the
processing of grants by the State Silk Board Committees, have not been worked
out.
5.        The reason for emphasizing the need to develop the process of
disbursing funds to NGOs through the CSB is that normal government procedures
are often dilatory, inefficient, intrusive, and on occasion expensive. RGOs
may not only find it difficult but also be reluctant to access these funds
unless the procedures for access to, and utilizing, such funds are
transparent, efficient, and objective, the objectives are pre-determined, and
the CSB can be kept out of the day-to-day affairs of these NGOs.
                                    - 32 ­


                                                                 ANNEX 2
                                                                 Page 2 of 3

6.        It is advisable for the Bank to encourage the eSB to develop
transparent, efficient, and objective financial disbursement and grant
processing procedures, otherwise it is possible that existing eSB procedures
may further delay the disbursement of funds to NGOs. NGOs will facilitate
group formation in the National Sericulture Project. Group formation requires
pre-implementation community organizing activities, and pre-implementation
community organizing activities usually require pre-project funding. But
existing eSB procedures may delay disbursement of funds to NGOs even during
the implementation stage, thus severely hampering group formation and its
timely impact.
7.        The National Sericulture Project also plans to undertake "a
pioneering program to evaluate the impact of the project on intended
beneficiaries using beneficiary assessment (BA) techniques". The eSB has
contracted academic consultants to undertake BA. The NDO staff support eSB's
contention that BA is an academically rigorous methodology grounded in Rural
Sociology which NGOs are not qualified to undertake. Since this is the first
Bank-supported project in India to have a BA component, the NDO staff support
the eSB's desire not to "muddy the waters" by introducing new, and perhaps
inappropriate, actors into this component.
8.        NGOs, on the other hand, argue that while BA may require certain
amount of academic rigor, the critical element determining the success of BA
is the ability to target the beneficiaries whose opinion is being sought
through this exercise. Sericulture NGOs are in close contact with these
beneficiaries, especially "marginalized" constituencies like women. Thus,
NGOs argue that they should play a central role in taking into account needs
and knowledge of the intended beneficiaries (with whom they have a well­
established "trust" relationship) so that they can constantly feedback
beneficiary concerns into the project.
9.        Further, analysis of scholarly literature on BA and similar
methodologies reveals that academic rigor should not be over-emphasized. A
case in point is the emphasis Robert Chambers lays on the appropriateness of
"quick and dirty" evaluation techniques (usually employed by NGOS) as opposed
to the "long and clean" techniques (usually employed by Political Economists,
Sociologists, and Social Anthropologists) in his widely acclaimed book
"Putting the Last First". Similarly, Lawrence Salmen, widely regarded as the
"father" of BA in the Bank, argues in "Listen to the People" that the ability
to target marginalized sectors of the population and to listen to them (a
well-recognized quality of NGOs) is more important than in-depth knowledge of
anyone discipline.
10.       After much urging from the NGO community and pressure from senior
Bank staff knowledgeable about NGOs, the eSB appointed MYRADA to be a member
of the Steering Committee overseeing BA (but not to be one of the agencies
actually conducting BA in the field).
                                   - 33 ­

                                                                MUI2
                                                                Page 3 of 3

11.       To sum up, I have three suggestions for enhancing the Noo-component
of the National Sericulture Project. First, NCO databases of the Bank and
information networks of NCO apex organizations, the Bank-Noo Committee, and
well-established sericulture ROOs may be utilized to identify additional
sericulture NCOs. Second, an attempt to streamline the financial disbursement
and grant processing procedures of the CSB may reduce delays in channeling
funds to NCOs. Assistance to NCOs to formulate "acceptable" proposals for
these funds may also prove to be helpful. Third, directly involving NOOs in
BA to reinforce the on-going work of academic consultants is advisable for
field-level monitoring and evaluation.
                                    - 35 ­

                                                                 ANNEX 3
                                                                 Page 1 of 4

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                                     - 36 ­

                                                                  ANNEX 3
                                                                  Page 2 of 4

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                                                                  MUX3
                                                                  Page 3 of 4

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                                    - 38 ­


                                                                 ANNEX 3
                                                                 Page 4 of 4

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