Evaluation of DOL/EII [Department of Labor/Economic Innovation International] project (180-0033)

While EII intends to "institutionalize" these regional development agencies (RDAs) and the financial mechanisms that will make them independent and self-sustaining, it has not yet offered more than a replication of experience Poland has already had with its indigenous, non-project RDAS. USAID personnel have complained that the project lacks credibility, that EII's initial activities stimulated high hopes of direct technical and financial assistance in the selected communities, as well as expectations that the program would generate employment and create wealth. EII has instead provided little expertise and even less financial support for the clients, and it has yet to demonstrate significant tangible results in institution building or job or wealth creation. EII claims the project's purpose is to stimulate jobs and income, but project activities are not directly linked to generating those outputs. In thus aiming at attractive but vaguely worded goals, there appears to be a communications failure and consequent misunderstanding among USAID, DOL, and EII of the basic project structure. In addition, the project's underlying assumption that economic growth and development can follow a series of well- defined "steps" is misleading and not universally true. Also, the project design is deficient in terms of EII's not having identified reasonable and time-phased objectives, defined necessary inputs, scheduled required actions, and described expected accomplishments. On the operational level, EII has only provided intermittent and relatively superficial TA, whereas most client communities need far more labor-intensive support to establish themselves and their programs in the project period, as well as a greater diversity of expertise to attend to their wide array of administrative and programmatic concerns. EII must also demonstrate more cultural sensitivity, and it will have to pursue a more systematic approach to obtain other donor support. The donor community in the "Planning Teams" that are to complement EII's inputs with vital technical and financial resources are no more engaged in this project than they are in any other bilateral activity. EII has proposed extension of the program for four more years, with expansion to other communities and countries. The evaluator recommends that DOL and USAID exercise restraint for one or two years, pending clear evidence of successful job and wealth creation in the communities where EII has already made a commitment. If the project is extended it would be desirable to have it done under a performance contract that requires a more rigorous plan of inputs, outputs, benchmarks, and objectives. (Author abstract)