Accompanying TA would help clients meet key program targets, such as implementation of the IGF and medium-term budgeting. Policy-based loan design should ensure that TA findings are translated into actions. With the MFEM’s preference for policy-based lending, loan design should ensure strong links between TA and the program being supported. Given (i) the limited implementation capacity of the government, (ii) the approval of a policy-based loan supporting Cook Islands’ Disaster Resilience Program, and (iii) the MFEM’s preference for policy-based lending, further capacity support is needed.
As noted above, donors provide a significant amount of resources, including for capacity building. Various modalities of donor participation and coordination could be explored in the design of policy-based loans, such as inclusion of donor commitment and funding of specific programs and projects (especially in the social sectors, where donors are active) and TA (notably in PFM).
Many of the milestones for institutional reform are process related, e.g., cabinet endorsement of the IGF. The outcomes from the institutional reforms are not well-defined, e.g., higher economic and social rates of return. There is a need for closer monitoring and evaluation to determine whether the reforms achieved their objectives. The theory of change and intended results should be well articulated at the outset. Policy actions should be linked to development outcomes that are clearly defined, with measurable indicators and baseline data for future evaluation.