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Revisiting the Rules of the Game: Modular Approach to Project Design

Rajeev Ahuja's picture

Writing anything on “project design’ can be hazardous. For, development contexts are diverse, actors and sectors are varied, and design can take innumerable forms. Nevertheless, this non-prescriptive note may help Bank teams engaged in designing new lending operations as they rethink the rules of the game.

Designing a development project is, in many ways, akin to constructing an edifice. Just as a building requires a solid foundation together with flexible structures to withstand shocks, a project also needs firm foundations -- based on government policy, the institutional context, and the cultural milieu – as well as a flexible superstructure that can adjust when things change. Cast any project design in stone and the changing context will soon render it obsolete!

The development path is strewn with uncertainties, not all of which can be fully anticipated. Just as natural disasters, insurgencies, early elections and so forth can derail things, so too can the cobwebs of bureaucracy, technical revisions, policy changes, implementation impediments, and change in leadership, alter the context.

In India, for example, the roll out of National Rural Health Mission (NRHM) put a big question mark on ongoing Bank projects to develop state level health systems. Likewise, the national level rollout of the subsidized health insurance scheme for the poor rendered the health insurance component in these projects redundant. There was no way in which these policy decisions could have anticipated. Indeed, FAILfaire, the World Bank’s recent event meant to share lessons from failed interventions, acknowledged that many projects fail due to completely unanticipated barriers.

The WB’s recent move towards a risk based approach to projects is very welcome. Depending on the risks to achieving Project Development Objectives (PDOs), a differentiated approach to project design and implementation is any day better than one-size-fits-all approach. The newly instituted overall risk assessment framework (ORAF) is a step in the right direction. However, from the PDOs perspective, ORAF is necessary but not sufficient. It needs to be accompanied by a move towards flexible design of projects for two reasons: one, not all risks can be anticipated, let alone mitigated and, two, there are risks associated with mitigation measures themselves!

ORAF would work well for the risks that can be anticipated and dealt with as one could then develop a mitigation plan. For the risks that cannot be anticipated and/or dealt with, a flexible project design would make it possible to do all that is necessary to stay focused on achieving the PDOs.

The idea of flexible project design is not new in the Bank, however. In many instances, task teams have been designing projects flexibly -- but these have mostly been from the disbursements perspective. This is accomplished by, for example, designing projects to include both higher capacity and lower capacity regions or mixing high risk, high return strategies with

low risk, low return strategies so that some disbursement takes place. However, designing projects flexibly from a development perspective can pose a challenge from the technical side as well as from the authorizing environment side.

A flexible project design would, for example, mean:

• Defining a criterion of selection of intervention areas or units rather than specifying the selection based on that criterion
• Defining the contours of supporting strategies that help in achieving given objectives rather than specifying the strategy to be supported
• Defining terms of partnership rather than specifying partnerships derived from those terms

Projects can be designed flexibly not just in technical terms but also in terms of fiduciary and safeguard requirements. However, flexible design does not mean an escape from the specifics. Even when a project is designed flexibly, its implementation requires a good understanding of (a) the strategies and sub-strategies to be followed, and (b) a detailed implementation plan which, in turn, requires implementation activities to be well identified and costed. Should there be any change in strategies or sub-strategies, a flexible design would ideally be able to accommodate the change.

At a time when the Bank is revisiting its instruments and framework, it is important to explore the mechanisms for the institutionalization of flexibility in project design. The framework and guidance for flexible project design may call for a differentiated approach, similar to the risk based approach to projects. This would require some fresh, hard thinking to accelerate the pace of development through superior design for faster implementation of the Bank projects.