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The White House Council of Economic Advisers (CEA) was created by Congress in 1946 to advise the president on ways “to foster and promote free competitive enterprise” and “to promote maximum employment, production and purchasing power.” President Truman, who signed the Employment Act of 1946 into law, was unenthusiastic about the Council and didn’t nominate members for nearly six months. Yet the CEA, comprised of three individuals whom Congress says are to be “exceptionally qualified,” has not only survived but also prospered for 70 years and remains an important part of the president’s economic policy decisionmaking.

On February 11, the Hutchins Center on Fiscal and Monetary Policy at Brookings marked this anniversary by examining the ways the CEA and other economists succeed and fail when they set out to advise elected politicians and tap the expertise of some of the “exceptionally qualified” economists who have chaired the Council over the past four decades.

You can join the conversation and tweet questions for the panelists at #CEAat70.

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• Panel 1: The CEA in Moments of Crisis
• Panel 2: The CEA and Policymaking
• Panel 3: Current Economic Policy Issues

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• The Council of Economic Advisers: 70 years of advising the president

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• Uncorrected Transcript (.pdf)

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• 20160211_economic_advisers_transcript

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In a close referendum last week, voters in the United Kingdom voted to leave the European Union, setting off financial and political shockwaves in Europe and around the world. British PM David Cameron has resigned, while Scotland has renewed calls for another independence referendum, global stock markets lost nearly $2 trillion on Friday, and the British pound is at a 30-year low. Many view the British referendum as commentary not only on economic and immigration trends in the UK, but as a possible forecast of the broader wave of anti-globalization and nationalistic political movements in the U.S. and Europe.

On June 29, Brookings hosted a discussion of the immediate fallout and medium- to long-term consequences of Britain’s departure from the EU. Panelists addressed how the process of exiting the EU might unfold, effects on the U.S.-U.K. and U.S.-EU security and trade relationships, on global development, and the future of the EU project.

Join the conversation on Twitter using #Brexit.

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• Brexit sends shockwaves: What now?

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• Brexit sends shockwaves: What now?

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• Uncorrected Transcript (.pdf)

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In his presidential campaign in 1928, Herbert Hoover promised to help impoverished farmers by increasing tariffs on agricultural products; after the election, he also asked Congress to reduce tariffs on industrial goods. In April 1929, well before Black Thursday, U.S. Representative Reed Smoot, a Republican from Utah, introduced a bill that passed the House in May. The bill increased agricultural and industrial tariffs at levels that had not been seen for a century. This was a relatively benign beginning of what would become one of the most tragic policy measures of the 1930s. Within a few months of the bill being passed in the Senate as the Smoot-Hawley Tariff Act, other countries in response raised their own trade barriers, which started a vicious circle of contracting world trade flows and economic activity, and rising unemployment from 1930 to 1933.

There are three main lessons from the policies mentioned above: 

1. “Beggar-my-neighbor” policies are bad.
2. Bad policies can have tragic consequences.
3. Beware of benign measures that can ignite uncontrollable chain reactions.

Indeed, these lessons have been in every policymakers’ mind since the Lehmann Brothers failure. In fact, the creation of the G-20 was a spectacular effort by the major economies of the world to cooperatively answer the challenges raised by the most severe financial crisis since the 1930s. The G-20 coordinated the management of strong macroeconomic policies, including huge deficits and easy monetary policies. These were bold decisions but not radical, and those who condemned government intervention have been rebutted by the urgency of these measures. And it is now widely acknowledged that these unconventional measures successfully avoided the transformation of the Great Recession into another Great Depression.

In the U.S., the recovery is at best shaky, unemployment is artificially reduced by the growing number of discouraged workers who have stopped looking for work, and the median income is dramatically lagging.

Today, there are reasons of hope that have been eloquently described by Roger Altman [1]: it can be argued that in the U.S., and to a lesser degree in Europe, the crisis has inspired significant reforms that have pushed the economy closer to a sound and sustainable growth trajectory. However others rightfull so object that enormous challenges are still facing the populations and their respective governments. The price paid for curing the damages of the global financial crisis is extremely high everywhere. In the U.S., the recovery is at best shaky, unemployment is artificially reduced by the growing number of discouraged workers who have stopped looking for work, and the median income is dramatically lagging. In Europe, austerity is the name of the game in every country except Germany and despair is growing among the populace. Japan has been stuck for two decades in deflation. Many citizens around the world feel that the efforts have gone too far, yet the benefits and retribution have benefitted too few. Electoral frustrations are on the rise as demonstrated in Italy where Mario Monti’s wise policies have been followed by the success of the Five Stars Movement of Beppe Grillo. Italy turning ungovernable is a bad sign for democracies. Could we see a comeback of desperate national policy experiments like the ones that democracies were progressively pushed to adopt after facing insurmountable difficulties in the early 1930s?

Now, a really radical policy experiment is already taking shape in Japan with the introduction of what has been named “Abenomics” after the name of the newly-elected prime minister, Shinzo Abe. It has taken only one election and one nomination at the head of the Bank of Japan to really revolutionize monetary policy. This revolution can be qualified in two ways, one benign, one threatening.

There is first reason to rejoice. After two decades of failed policies, it’s finally good to see bold politicians ready to do whatever it takes to extract Japan from its deflationary trap. Should Mr. Abe succeed, he would unclench the domestic brakes to economic growth, which deflation has so lengthily opposed: declining prices in effect are discouraging consumption (goods will be better and cheaper tomorrow, why spend now?) and investment (facing massive excess capacity of production and weak final demand, why invest now?). The new mission of the governor of the Bank of Japan is to raise inflationary expectations to 2 percent, which would make Japan converge with the world average inflationary trend and monetary policy. Demand would restart and Japan would contribute to an improved global economic outlook. This is the view that the IMF chief recently endorsed. As expected, Mr. Kuroda last week unveiled a much more aggressive package of quantitative easing than what we have previously witnessed, with a view to double the monetary base. Japan’s central bank will buy more long-term government bonds, pushing private investors to invest more in risky assets. Since the election, the Nikkei has risen 34 percent. Different polls and surveys suggest that the public is positively reacting to Mr. Abe’s promises.

Is success already underway? That would be good news for Japan and for the world. But it is clearly too soon to celebrate because this virtuous circle can simply fail to happen. No central bank until now has ever tried to raise inflationary expectations and no one knows if this can turn to be a practical and manageable reality. Inflationary expectations could also easily turn out of control. Before exercising traction on the economy, they could impose higher interest rates that would have devastating consequences for the Japanese Treasury in the management of a huge public debt (more than twice the size of the GDP). But there is something worse than the risk of Abenomics having poor or adverse domestic consequences.

The other side of Abenomics is currency management, a much less propitious theme for a government to communicate in the weeks leading up to the IMF Spring Meetings in Washington. This aspect of the policy is not only bold, it’s actually radical. As a candidate, Mr. Abe made extremely clear that he was willing to help the manufacturing sector by depreciating the yen and that monetary policy would be designed with this goal in mind. Remember that Japan, despite all its woes, remains a formidable exporter with an external surplus close to ¥650 billion in February (approximately $6.5 billion). As my fellow economists at Brookings have recently shown [2], the Japanese bilateral surplus with the U.S., which is $23 billion according to reported trade statistics, would dramatically increase by 60 percent and reach $36 billion if measured in added-value terms. Mr. Abe’s message was well received by investors who quickly after the election started to short the yen. As a result, the yen has slumped 21.5 percent in the past five months— the worst (or the best?) performance among the currencies of the developed economies. Following last week’s announcement that the Bank of Japan was really acting to debase monetary policy, the yen weakened beyond 99 yen per dollar and dropped against 15 major currencies.

A weakening yen also poses challenges for China, complicating the China’s strategy to reach its 8 percent target growth for this year; it could also trigger huge capital flows into China destabilizing the delicate control of financial stability

This is where Mr. Abe and Mr. Smoot cross ways: both are local politicians inspired by the difficulties facing their countries; both are willing to use every available policy tool to soften these difficulties; neither is willing to shock the global economy, which has never been the case when arguing in favor of protectionism or competitive devaluations. But these measures are nonetheless radical because they have the potential to ignite uncontrollable chain reactions. South Korea for one already declared itself very concerned by this aggressive policy, which is totally understandable. For instance, when Toyota and Sony take some advantage of Abe’s policy, the ones that would likely be first to suffer are Hyundai and Samsung. South Korea has vital interests at stake and, over In the last five months, it has been struggling with a pernicious appreciation of its currency. A weakening yen also poses challenges for China, complicating the China’s strategy to reach its 8 percent target growth for this year; it could also trigger huge capital flows into China destabilizing the delicate control of financial stability; SAFE, the financial institution that manages China’s huge official reserves, last week published its yearly report for 2012. Commenting on the global environment, the report emphasized that “a yen’s depreciation can’t solve Japan’s structural problem, … [but] could turn out of control and trigger a suspicion about its sustainability,… and finally have dangerous spill-over-effects”[3]. Chinese officials at the Boao Forum also expressed similar concerns.

We still don’t know the end. Hope is that we could see the positive interpretation of a bold Japanese policy experiment contributing to a better functioning world economy. Experience should nonetheless make us cautious. What the movement by the Bank of Japan does is to increase an already huge excess liquidity, inundating global markets. In addition, the Japanese government has added a dangerous touch of currency manipulation. Both aspects should be alerts for the IMF rather than too quickly fuel the artificial satisfaction of promises regarding higher inflationary expectations and increased domestic demand. In the end, competitive devaluations always prove inefficient and dangerous because they inevitably provoke reactions and retaliations. “Currency wars” have made headlines from time to time in the recent years but these were skirmishes. This time it could be for real, and this should be a major concern for the United States. It is a great thing that Japan recently expressed interest in joining the Trans-Pacific Partnership, but these are words with long delayed potential results. A more constructive and immediate task is to continue the cooperative global approach of exchange rate policies and to strongly discourage any temptation of national radical policy experiments. This should be a central issue next week during the IMF Spring Meetings in Washington.

[1] Roger C. Altman: “The Fall and Rise of the West”, Foreign Affairs, January-February 2013

[2] Kemal Dervis, Joshua Meltzer and Karim Foda: “Value-Added Trade and its Implications for International Trade Policy”, Brookings Opinion, April 2, 2013

[3] http://www.safe.gov.cn/resources/image/076044004f1fb34a9da59ff675a23beb/1365377817854.pdf?MOD=AJPERES&name=2012年中国国际收支报告.pdf

Introduction

Ninety years after the foundation of the Turkish Republic, Ankara appears to be on the verge of a paradigmatic change in its approach to the Kurdish question. It is too early to tell whether the current negotiations between Ankara and the Kurdish Workers’ Party (PKK) will manage to accommodate Kurdish cultural and political demands. Yet, for perhaps the first time in its history, the Turkish Republic seems willing to incorporate Kurds into the political system rather than militarily confront them. For decades, Turkey sought to assimilate its sizable Kurdish minority, about 15 million people, or around 20 percent of its total population. From the mid-1920s until the end of the Cold War, Ankara denied the ethnic existence of Kurds and their cultural rights. It took a three-decade-long PKK-led insurgency – which started in 1984 and caused a death toll of 40,000 – for the republic to start accepting the “Kurdish reality” and introduce cultural reforms. This perhaps explains why the PKK’s jailed leader Abdullah Öcalan is a national hero in the eyes of significant segments of Kurdish society.

Of the approximately 30 million Kurds in the Middle East, about half live in Turkey. Kurds also constitute a significant minority in neighboring Iraq, Iran and Syria. The Palestinians are often referred to as the most famous case of a “nation without a state” in the Middle East. But the Kurds, who outnumber the Palestinians by a factor of five, are by far the largest ethnic community in the region seeking national self-determination. The future of Turkey - and the Middle East - is therefore intimately linked to the question of Kurdish nationalism.

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As Turkey prepares for highly-contested elections on November 1, concerns are growing about the country’s politics, economy, security, and foreign policy. Just a few years ago Turkey was recognized as a model of democracy and beacon of stability and economic growth in a challenging region. However, more recently, Turkey’s economy has lost its dynamism, its leaders’ commitment to democratic principles seems to be eroding, and doubts are emerging about the country’s interests and engagement in the region. Even more disturbing, as the conflicts in Syria and Iraq continue unabated and massive refugee flows spill over into Europe, violent Islamic extremism has now surfaced in Turkey. With the government and opposition trading accusations, the horrific, recent bombing attack in Ankara has further polarized an already deeply-divided and anxious country.

On November 2, the Center on the United States and Europe at Brookings will host a discussion on the Turkish elections. Panelists will discuss how recent events might influence voters what the election results might portend for Turkey’s strategic orientation. Panelists will include Ömer Taşpınar of the National War College and Brookings; Gönül Tol of the Middle East Institute; Kadir Üstün of the SETA Foundation; and Robert Wexler of S. Daniel Abraham Center for Middle East Peace. Brookings Turkey Project Director and TÜSİAD Senior Fellow Kemal Kirişci will moderate the discussion.

After the program, panelists will take questions from the audience.

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• Transcript (.pdf)

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• 20151102_turkey_elections_transcript

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From “American Crossroads” to “Americans for a Better Tomorrow, Tomorrow,” so-called "super PACs" have emerged as the dominant new force in campaign finance. Created in the aftermath of two landmark court decisions and regulatory action and inaction by the Federal Election Commission (FEC), these independent spending-only political action committees are collecting unlimited contributions from individuals, corporations and unions to advocate for or against political candidates. The legal requirements they face—disclosure of donors and non-coordination with the candidates and campaigns they are supporting—have proven embarrassingly porous. Increasingly, super PACs are being formed to boost a single candidate and are often organized and funded by that candidate’s close friends, relatives and former staff members. Their presence is most visible in presidential elections but they are quickly moving to Senate and House elections.

On March 1, on the heels of the FEC’s February filing deadline, the Governance Studies program at Brookings hosted a discussion exploring the role of super PACs in the broader campaign finance landscape this election season. Anthony Corrado, professor of government at Colby College and a leading authority on campaign finance, and Trevor Potter, nonresident senior fellow at the Brookings Institution, a former chairman of the FEC and lawyer to Comedy Central’s Stephen Colbert, presented. 

After the panel discussion, the speakers took audience questions. Participants joined the discussion on Twitter by using the hashtag #BISuperPAC.

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• Full Video: The Rise of Super PACs
• Why Corporations Spend on Elections
• GOP Likely to Benefit Most from Super PACs

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• Campaign Finance in the 2012 Elections: The Rise of Super PACs

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• Uncorrected Transcript (.pdf)

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By most metrics, the 1991 Gulf War, also known as Operation Desert Storm, was a huge and rapid success for the United States and its allies. The mission of defeating Iraq's army, which invaded Kuwait the year prior, was done swiftly and decisively. However, the war's impact on soldiers who fought in it was lasting. Over 650,000 American men and women served in the conflict, and many came home with symptoms including insomnia, respiratory disorders, memory issues and others attributed to a variety of exposures – “Gulf War Illness."

On June 16, the Center for 21st Century Security and Intelligence at Brookings and Georgetown University Medical Center co-hosted a discussion on Desert Storm, its veterans, and how they are faring today. Representative Mike Coffman (R-Col.), the only member of Congress to serve in both Gulf wars, delivered an opening address before joining Michael O’Hanlon, senior fellow at Brookings, for a moderated discussion. Joel Kupersmith, former head of the Office of Research and Development of the Department of Veterans Affairs, convened a follow-on panel with Carolyn Clancy, deputy under secretary for health for organizational excellence at the Department of Veterans Affairs; Adrian Atizado, deputy national legislative director at Disabled American Veterans; and James Baraniuk, professor of medicine at Georgetown University Medical Center.

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• Desert Storm after 25 years: Confronting the exposures of modern warfare

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• Uncorrected Transcript (.pdf)

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• 20160616_desert_storm_transcript

A key objective of the United Nations Development Programme (UNDP) is to assist its member countries in meeting the Millennium Development Goals (MDGs). UNDP pursues this objective in various ways, including through analysis and advice to governments on the progress towards the MDGs (such as support for the preparation and monitoring Poverty Reduction Strategies, or PRSs, in poor countries), assistance for capacity building, and financial and technical support for the preparation and implementation of development programs.

The challenge of achieving the MDGs remains daunting in many countries, including Tajikistan. To do so will require that all development partners, i.e., the government, civil society, private business and donors, make every effort to scale up successful development interventions. Scaling up refers to “expanding, adapting and sustaining successful policies, programs and projects on different places and over time to reach a greater number of people.” Interventions that are successful as pilots but are not scaled up will create localized benefits for a small number of beneficiaries, but they will fail to contribute significantly to close the MDG gap.

This paper aims to assess whether and how well UNDP is supporting scaling up in its development programs in Tajikistan. While the principal purpose of this assessment was to assist the UNDP country program director and his team in Tajikistan in their scaling up efforts, it also contributes to the overall growing body of evidence on the scaling up of development interventions worldwide.

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Editor's Note: The World Bank’s Independent Evaluation Group (IEG) recently published a self-evaluation of its activities. Besides representing current thinking among evaluation experts at the World Bank, it also more broadly reflects some of the strengths and gaps in the approaches that evaluators use to assess and learn from the performance of the international institutions with which they work. The old question “Quis custodet ipsos custodes?” – loosely translated as “Who evaluates the evaluators?” – remains as relevant as ever. Johannes Linn served as an external peer reviewer of the self-evaluation and provides a bird’s-eye view on the lessons learned.

An Overview of the World Bank’s IEG Self-Evaluation Report

In 2011 the World Bank’s Independent Evaluation Group (IEG) carried out and published a self-evaluation of its activities. The self-evaluation team was led by an internal manager, but involved a respected external evaluation expert as the principal author and also an external peer reviewer.

The IEG self-evaluation follows best professional practices as codified by the Evaluation Cooperation Group (ECG). This group brings together the evaluation offices of seven major multilateral financial institutions in joint efforts designed to enhance evaluation performance and cooperation among their evaluators. One can therefore infer that the approach and focus of the IEG self-evaluation is representative of a broader set of practices that are currently used by the evaluation community of international financial organizations.

At the outset the IEG report states that “IEG is the largest evaluation department among Evaluation Capacity Group (ECG) members and is held in high regard by the international evaluation community. Independent assessments of IEG’s role as an independent evaluation function for the Bank and IFC rated it above the evaluation functions in most other ECG members, international nongovernmental organizations, and transnational corporations and found that IEG follows good practice evaluation principles.”

The self-evaluation report generally confirms this positive assessment. For four out of six areas of its mandate IEG gives itself the second highest rating (“good”) out of six possible rating categories. This includes (a) the professional quality of its evaluations, (b) its reports on how the World Bank’s management follows up on IEG recommendations, (c) cooperation with other evaluation offices, and (d) assistance to borrowing countries in improving their own evaluation capacity. In the area of appraising the World Bank’s self-evaluation and risk management practices, the report offers the third highest rating (“satisfactory”), while it gives the third lowest rating (“modest”) for IEG’s impact on the Bank’s policies, strategies and operations. In addition the self-evaluation concludes that overall the performance of IEG has been “good” and that it operates independently, effectively and efficiently.

The report makes a number of recommendations for improvement, which are likely to be helpful, but have limited impact on its activities. They cover measures to further enhance the independence of IEG and the consistency of evaluation practices as applied across the World Bank Group’s branches – the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA) –; to improve the design of evaluations and the engagement with Bank management upstream for greater impact; and monitoring the impact of recent organizational changes in IEG in terms of results achieved. The report also recommends that more be done to evaluate the Bank’s analytical work and that evaluations draw on comparative evidence.

Assessment

In terms of the parameters of self-evaluation set by the prevailing practice among the evaluators on international financial agencies, the IEG self-evaluation is accurate and helpful. From my own experience as an operational manager in the Bank whose activities were evaluated by IEG in years past, and as a user of IEG evaluations (and of evaluations of other international aid organizations) for my research on aid effectiveness, I concur that IEG is independent and effective in meeting its mandate as defined. Moreover, the self-evaluation produces useful quantitative evidence (including survey results, budget analysis, etc.) to corroborate qualitative judgments.

However, the self-evaluation suffers from a number of limitations in approach and gaps in focus, which are broadly representative of the practices prevalent among many of the evaluation offices of international aid agencies.

Approach of the IEG self-evaluation

The core of the self-evaluation report is about the evaluation process followed by IEG, with very little said about the substance of IEG’s evaluations. The following questions could have usefully been raised, but were not: do evaluations cover the right issues with the right intensity, such as growth and poverty; environmental, governance, and gender impacts; regional dimensions versus exclusive country or project focus; effectiveness in addressing the problems of fragile and conflict states; effectiveness in dealing with global public goods; sustainability and scaling up; etc. Therefore the report does not deal with the question of whether IEG effectively responds in its evaluations to the many important strategic debates and issues with which the development community is grappling.

Related to this limitation is the fact that the report assessed the quality of IEG’s mostly in terms of (a) whether its approach and processes meet certain standards established by the Evaluation Cooperation Group; and (b) how it is judged by stakeholders in response to a survey commissioned for this evaluation. Both these approaches are useful, but they do not have any basis in professional assessments of the quality of individual products. This is equivalent to IEG evaluating the World Bank’s projects on the quality of its processes (e.g., appraisal and supervision processes) and on the basis of stakeholder surveys, without evaluating individual products and their impacts.

Gaps in the Self-Evaluation and in Evaluation Practice

Careful reading of the report reveals six important gaps in the IEG self-evaluation, in the prevailing evaluation practice in the World Bank, and more generally in the way international financial organizations evaluate their own performance. The first three gaps relate to aspects of the evaluation approach used and the second three gaps relate to lack of focus in the self-evaluation on key internal organizational issues:

1. Impact Evaluations: The report notes that IEG carries out two to three impact evaluations per year, but it sidesteps the debate in the current evaluation literature and practice as to what extent the “gold standard” of randomized impact evaluation should occupy a much more central role. Given the importance of this debate and divergence of views, it would have been appropriate for the self-evaluation to assess IEG’s current practice of very limited use of randomized evaluations.

2. Evaluation of Scaling Up: The report does not address the question of to what extent current IEG practice not only assesses the performance of individual projects in terms of their outcomes and sustainability, but also in terms of whether the Bank has systematically built on its experience in specific projects to help scale up their impact through support for expansion or replication in follow-up operations or through effective hand-off to the government or other partners. In fact, currently IEG does not explicitly and systematically consider scaling up in its project and program evaluations. For example, in a recent IEG evaluation of World Bank funded municipal development projects (MDPs) , IEG found that the Bank has supported multiple MDPs in many countries over the years, but the evaluation did not address the obvious question whether the Bank systematically planned for the project sequence or built on its experience from prior projects in subsequent operations. While most other evaluation offices like IEG do not consider scaling up, some (in particular those of the International Fund for Agricultural Development and the United Nations Development Program) have started doing so in recent years.

3. Drawing on the Experience of and Benchmarking Against Other Institutions: The self-evaluation report does a good job in benchmarking IEG performance in a number of respects against that of other multilateral institutions. In the main text of the report it states that “IEG plans to develop guidelines for approach papers to ensure greater quality, in particular in drawing on comparative information from other sources and benchmarking against other institutions.” This is a welcome intention, but it is inadequately motivated in the rest of the report and not reflected in the Executive Summary. The reality is that IEG, like most multilateral evaluation offices, so far has not systematically drawn on the evaluations and relevant experience of other aid agencies in its evaluations of World Bank performance. This has severely limited the learning impact of the evaluations.

4. Bank Internal Policies, Management Processes and Incentives: IEG evaluations traditionally do not focus on how the Bank’s internal policies, management and incentives affect the quality of Bank engagement in countries. Therefore evaluations cannot offer any insights into whether and how Bank-internal operating modalities contribute to results. Two recent exceptions are notable exceptions. First, the IEG evaluation of the Bank’s approach to harmonization with other donors and alignment with country priorities assesses the incentives for staff to support harmonization and alignment. The evaluation concludes that there are insufficient incentives, a finding disputed by management. Second, is the evaluation of the Bank’s internal matrix management arrangements, which is currently under way. The self-evaluation notes that Bank management tried to quash the matrix evaluation on the grounds that it did not fall under the mandate of IEG. This is an unfortunate argument, since an assessment of the institutional reasons for the Bank’s performance is an essential component of any meaningful evaluation of Bank-supported programs. While making a good case for the specific instance of the matrix evaluation, the self-evaluation report shies away from a more general statement in support of engaging IEG on issues of Bank-internal policies, management processes and incentives. It is notable that IFAD’s Independent Office of Evaluation appears to be more aggressive in this regard: It currently is carrying out a full evaluation of IFAD’s internal efficiency and previous evaluations (e.g., an evaluation of innovation and scaling up) did not shy away from assessing internal institutional dimensions.

5. World Bank Governance: The IEG self-evaluation is even more restrictive in how it interprets its mandate regarding the evaluation of the World Bank’s governance structures and processes (including its approach to members’ voice and vote, the functioning of its board of directors, the selection of its senior management, etc.). It considers these topics beyond IEG’s mandate. This is unfortunate, since the way the Bank’s governance evolves will substantially affect its long-term legitimacy, effectiveness and viability as an international financial institution. Since IEG reports to the Bank’s board of directors, and many of the governance issues involve questions of the board’s composition, role and functioning, there is a valid question of how effectively IEG could carry out such an evaluation. However, it is notable that the IMF’s Independent Evaluation Office, which similarly reports to the IMF board of directors, published a full evaluation of the IMF’s governance in 2008, which effectively addressed many of the right questions.

6. Synergies between World Bank, IFC and MIGA: The self-evaluation report points out that the recent internal reorganization of IEG aimed to assure more effective and consistent evaluations across the three member branches of the World Bank Group. This is welcome, but the report does not assess how past evaluations addressed the question of whether the World Bank, IFC and MIGA effectively capitalized on the potential synergies among the three organizations. The recent evaluation of the World Bank Group’s response to the global economic crisis of 2008/9 provided parallel assessments of each agency’s performance, but did not address whether they work together effectively in maximizing their synergies. The reality is that the three organizations have deeply engrained institutional cultures and generally go their own ways rather than closely coordinating their activities on the ground. Future evaluations should explicitly consider whether the three effectively cooperate or not. While the World Bank is unique in the way it has organizationally separated its private sector and guarantee operations, other aid organizations also have problems of a lack of cooperation, coordination and synergy among different units within the agency. Therefore, the same comment also applies to their evaluation approaches.

Conclusions

Self-evaluations are valuable tools for performance assessment and IEG is to be congratulated for carrying out and publishing such an evaluation of its own activities. As for all self-evaluations, it should be seen as an input to an independent external evaluation, a decision that, for now, has apparently been postponed by the Bank’s board of directors.

IEG’s self-evaluation has many strengths and provides an overall positive assessment of IEG’s work. However, it does reflect some important limitations of analysis and of certain gaps in approach and coverage, which an independent external review should consider explicitly, and which IEG’s management should address. Since many of these issues also likely apply to most of the other evaluation approaches by other evaluation offices, the lessons have relevance beyond IEG and the World Bank.

Key lessons include:

• An evaluation of evaluations should focus not only on process, but also on the substantive issues that the institution is grappling with.
• An evaluation of the effectiveness of evaluations should include a professional assessment of the quality of evaluation products.
• An evaluation of evaluations should assess:
  o How effectively impact evaluations are used;
  o How scaling up of successful interventions is treated;
  o How the experience of other comparable institutions is utilized;
  o Whether and how the internal policies, management practices and incentives of the institution are effectively assessed;
  o Whether and how the governance of the institution is evaluated; and
  o Whether and how internal coordination, cooperation and synergy among units within the organizations are assessed.

Evaluations play an essential role in the accountability and learning of international aid organizations. Hence it is critical that evaluations address the right issues and use appropriate techniques. If the lessons above were reflected in the evaluation practices of the aid institutions, this would represent a significant step forward in the quality, relevance and likely impact of evaluations.

To achieve the desired outcomes of the Sustainable Development Goals as well as the global targets from the Paris COP21 Climate Summit by 2030, governments will have to find ways to meet the top-down objectives with bottom-up approaches. A systematic focus on scaling up successful development interventions could serve to bridge this gap, or what’s been called the “missing middle.” However, the question remains how to actually address the challenge of scaling up.

When Arna Hartmann, adjunct professor of international development, and I first looked at the scaling up agenda in development work in the mid-2000s, we concluded that development agencies were insufficiently focused on supporting the scaling up of successful development interventions. The pervasive focus on one-off projects all too often resulted in what I’ve come to refer to as “pilots to nowhere.” As a first step to fix this, we recommended that each aid organization carry out a review to be sure to focus effectively on scaling up. 

The institutional dimension is critical, given their role in developing and implementing scaling up pathways. Of course, individuals serve as champions, designers, and implementers, but experience illustrates that if individuals lack a strong link to a supportive institution, scaling up is most likely to be short-lived and unsustainable. “Institutions” include many different types of organizations, such as government ministries and departments, private firms and social enterprises, civil society organizations, and both public and private external donors and financiers.

The Brookings book “Getting to Scale: How to Bring Development Solutions to Millions of Poor People” explores the opportunities and challenges that such organizations face, on their own or, better yet, partnering with each other, in scaling up the development impact of their successful interventions.

Over the past decade I have worked with 10 foreign aid institutions—multilateral and bilateral agencies, as well as big global non-governmental organizations—helping them to focus systematically on scaling up operational work and developing approaches to do so. There are common lessons that apply across the board to these agencies, with one salutary example being the International Fund for Agricultural Development (IFAD) which has tackled the scaling up agenda systematically and persistently.

Following are eight takeaway lessons I gleaned from my work with IFAD:

1. Look into the “black box” of institutions. It is not enough to decide that an institution should focus on and support scaling up of successful development interventions. You actually need to look at how institutions function in terms of their mission statement and corporate strategy, their policies and processes, their operational instruments, their budgets, management and staff incentives, and their monitoring and evaluation practices. Check out the Brookings working paper that summarizes the results of a scaling up review of the IFAD.
2. Scaling needs to be pursued institution-wide. Tasking one unit in an organization with innovation and scaling up, or creating special outside entities (like the Global Innovation Fund set up jointly by a number of donor agencies) is a good first step. But ultimately, a comprehensive approach must be mainstreamed so that all operational activities are geared toward scaling up.
3. Scaling up must be championed from the top. The governing boards and leadership of the institutions need to commit to scaling up and persistently stay on message, since, like any fundamental institutional change, effectively scaling up takes time, perhaps a decade or more as with IFAD.
4. The scaling up process must be grown within the institution. External analysis and advice from consultants can play an important role in institutional reviews. But for lasting institutional change, the leadership must come from within and involve broad participation from managers and staff in developing operational policies and processes that are tailored to an institution’s specific culture, tasks, and organizational structure.
5. A well-articulated operational approach for scaling up needs to be put in place. For more on this, take a look at a recent paper by Larry Cooley and I that reviews two helpful operational approaches, which are also covered in Cooley’s blog. For the education sector, the Center for Universal Education at Brookings just published its report “Millions Learning,” which provides a useful scaling up approach specifically tailored to the education sector.
6. Operational staffs need to receive practical guidance and training. It is not enough to tell staff that they have to focus on scaling up and then give them a general framework. They also need practical guidance and training, ideally tailored to the specific business lines they are engaged in. IFAD, for example, developed overall operational guidelines for scaling up, as well as guidance notes for specific area of engagement, including livestock development, agricultural value chains, land tenure security, etc.  This guidance and training ideally should also be extended to consultants working with the agency on project preparation, implementation, and evaluation, as well as to the agency’s local counterpart organizations.
7. New approaches to monitoring and evaluation (M&E) have to be crafted. Typically the M&E for development projects is backward looking and focused on accountability, narrow issues of implementation, and short-term results. Scaling up requires continuous learning, structured experimentation, and innovation based on evidence, including whether the enabling conditions for scaling up are being established. And it is important to monitor and evaluate the institutional mainstreaming process of scaling up to ensure that it is effectively pursued. I’d recommend looking at how the German Agency for International Development (GIZ) carried out a corporate-wide evaluation of its scaling up experience.
8. Scaling up helps aid organizations mobilize financial resources. Scaling up leverages limited institutional resources in two ways: First, an organization can multiply the impact of its own financial capacity by linking up with public and private agencies and building multi-stakeholder coalitions in support of scaling up. Second, when an organization demonstrates that it is pursuing not only one-off results but also scaled up impact, funders or shareholders of the organization tend to be more motivated to support the organization. This certainly was one of the drivers of IFAD’s successful financial replenishment consultation rounds over the last decade.

By adopting these lessons, development organizations can actually begin to scale up to the level necessary to bridge the missing middle. The key will be to assure that a focus on scaling up is not the exception but instead becomes ingrained in the institutional DNA. Simply put, in designing and implementing development programs and projects, the question needs to be answered, “What’s next, if this intervention works?”

In 2015 the international community agreed on a set of ambitious sustainable development goals (SDGs) for the global society, to be achieved by 2030. One of the lessons that the implementation of the Millennium Development Goals (MDG s) has highlighted is the importance of a systematic approach to identify and sequence development interventions—policies, programs, and projects—to achieve such goals at a meaningful scale. The Chinese approach to development, which consists of identifying a problem and long-term goal, testing alternative solutions, and then implementing those that are promising in a sustained manner, learning and adapting as one proceeds—Deng Xiaoping’s “crossing the river by feeling the stones”—is an approach that holds promise for successful achievement of the SDGs.

Having observed the Chinese way, then World Bank Group President James Wolfensohn in 2004, together with the Chinese government, convened a major international conference in Shanghai on scaling up successful development interventions, and in 2005 the World Bank Group (WBG ) published the results of the conference, including an assessment of the Chinese approach. (Moreno-Dodson 2005). Some ten years later, the WBG once again is addressing the question of how to support scaling up of successful development interventions, at a time when the challenge and opportunity of scaling up have become a widely recognized issue for many development institutions and experts.

Since traditional private and public service providers frequently do not reach the poorest people in developing countries, social enterprises can play an important role in providing key services to those at the “base of the pyramid.”

In parallel with the recognition that scaling up matters, the development community is now also focusing on social enterprises (SEs), a new set of actors falling between the traditionally recognized public and private sectors. We adopt here the World Bank’s definition of “social enterprises” as a social-mission-led organization that provides sustainable services to Base of the Pyramid (BoP) populations. This is broadly in line with other existing definitions for the sector and reflects the World Bank’s primary interest in social enterprises as a mechanism for supporting service delivery for the poor. Although social enterprises can adopt various organizational forms—business, nongovernmental organizations (NGOs), and community-based organizations are all forms commonly adopted by social enterprises—they differ from private providers principally by combining three features: operating with a social purpose, adhering to business principles, and aiming for financial sustainability. Since traditional private and public service providers frequently do not reach the poorest people in developing countries, social enterprises can play an important role in providing key services to those at the “base of the pyramid.” (Figure 1)

Figure 1. Role of SE sector in public service provision

Social enterprises often start at the initiative of a visionary entrepreneur who sees a significant social need, whether in education, health, sanitation, or microfinance, and who responds by developing an innovative way to address the perceived need, usually by setting up an NGO, or a for-profit enterprise. Social enterprises and their innovations generally start small. When successful, they face an important challenge: how to expand their operations and innovations to meet the social need at a larger scale. 

Development partner organizations—donors, for short—have recognized the contribution that social enterprises can make to find and implement innovative ways to meet the social service needs of people at the base of the pyramid, and they have started to explore how they can support social enterprises in responding to these needs at a meaningful scale. 

The purpose of this paper is to present a menu of approaches for addressing the challenge of scaling up social enterprise innovations, based on a review of the literature on scaling up and on social enterprises. The paper does not aim to offer specific recommendations for entrepreneurs or blueprints and guidelines for the development agencies. The range of settings, problems, and solutions is too wide to permit that. Rather, the paper provides an overview of ways to think about and approach the scaling up of social enterprise innovations. Where possible, the paper also refers to specific tools that can be helpful in implementing the proposed approaches. 

Note that we talk about scaling up social enterprise innovations, not about social enterprises. This is because it is the innovations and how they are scaled up that matter. An innovation may be scaled up by the social enterprise where it originated, by handoff to a public agency for implementation at a larger scale, or by other private enterprises, small or large. 

This paper is structured in three parts: Part I presents a general approach to scaling up development interventions. This helps establish basic definitions and concepts. Part II considers approaches for the scaling up of social enterprise innovations. Part III provides a summary of the main conclusions and lessons from experience. A postscript draws out implications for external aid donors. Examples from actual practice are used to exemplify the approaches and are summarized in Annex boxes.

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At an event this past week, Hillary Clinton announced that, if elected, she planned to put Bill Clinton in charge of creating jobs. If he becomes the “First Gentlemen” -- or as she prefers to call him, the “First Dude,” – he just might have some success in this role. The country’s very strong record of job creation during the first Clinton administration is a hopeful sign. (Full disclosure: I served in his Administration.)

But assuming he's given the role of jobs czar, what would Bill Clinton do? The uncomfortable fact is that no one knows how to create enough jobs. Although about 50 percent of the public, according to Pew, worries that there are not enough jobs available, and virtually every presidential candidate is promising to produce more, economists are not sure how to achieve this goal.

The debate centers around why we think people are jobless. Unless we can agree on the diagnosis, we will not be able to fashion an appropriate policy response.

Some economists think that an unemployment rate hovering around 5 percent constitutes “full employment.” Those still looking for jobs, in this view, are either simply transitioning voluntarily from one job to another or they are “structurally unemployed.” The latter term refers to a mismatch, either between a worker’s skills and the skills that employers are seeking, or between where the workers live and where the jobs are geographically. (The decline in housing values or tighter zoning restrictions, for example, may have made it more difficult for people to move to states or cities where jobs are more available.)

Another view is that despite the recovery from the Great Recession, there is still a residue of “cyclical” unemployment. If the Federal Reserve or Congress were to boost demand by keeping interest rates low, reducing taxes, or increasing spending on, say, infrastructure, this would create more jobs – or so goes the argument. But the Fed can’t reduce interest rates significantly because they are already near rock-bottom levels and tax and spending policies are hamstrung by political disagreements.

In my view, the U.S. currently suffers from both structural and cyclical unemployment. The reason I believe there is still some room to stimulate the economy is because we have not yet seen a significant increase in labor costs and inflation. Political problems aside, we should be adding more fuel to the economy in the form of lower taxes or higher public spending.

High levels of structural unemployment are also a problem. The share of working-age men who are employed has been dropping for decades at least in part because of outsourcing and automation. The share of the unemployed who have been out of work for more than six months is also relatively high for an economy at this stage of the business cycle. One possibility is that the recession caused many workers to drop out of the labor force and that after a long period of joblessness, they have seen their skills atrophy and employers stigmatize them as unemployable.

The depressing fact is that none of these problems is easy to solve. Manufacturing jobs that employ a lot of people are not coming back. Retraining the work force for a high-tech economy will take a long time. Political disagreements won’t disappear unless there is a landslide election that sweeps one party into control of all three branches of government.

So what can Bill Clinton or anyone else do? We may need to debate some more radical solutions such as subsidized jobs or a basic income for the structurally unemployed or a shorter work week to spread the available work around. These may not be politically feasible for some time to come, but former President Clinton is the right person to engage communities and employers in some targeted job creation projects now and to involve the country in a serious debate about what to do about jobs over the longer haul.

Editor's note: This piece originally appeared in Inside Sources.