overestimated given it typically evolves as public sector reforms move from adoption to implementation stage or as the result of government changes. Evolving political economy dynamics repeatedly mentioned in the interviews included electoral cycles, veto players, challenges related to cross-government coordination and executive-legislative relations.<sup>39</sup> This is consistent with the finding set out in section two that windows of opportunity are limited in the case of many public sector reform efforts – and the issue of likely changes is sometimes, but not consistently, addressed at the operational design stage.

Implementation Completion Reports tend to criticize an overoptimistic assessment of commitment and opportunities and failure to anticipate veto points – especially legal reforms being blocked in parliament. Some operations argue that they do not expect problems even if changes in government are looming (or do not address this issue). Such challenges subsequently became manifest during implementation.<sup>40</sup> While the sample size is too small to allow broad generalization, teams seem to be more realistic and frank in propitious environments (where a case can be made that risks are manageable) as well as in recognized difficult environments (where substantial risks are obvious), but less so in ̳intermediate‘ environments (including reviewed operations in Sub-Saharan Africa, Central America, and South Eastern Europe). Furthermore, in difficult environments the focus and scope of operations can still remain unaligned to the full extent of risks, despite teams‘ awareness of significant challenges (e.g. operations implemented in a post-conflict country in South Eastern Europe, a low income Latin American country; and a country in the Indian Ocean).

Furthermore, explicit risk mitigation efforts prove to be more challenging than anticipated. Several ex-post reviews raise the point that components meant to target the demand side and/or accountability institutions remained underfunded or otherwise limited in implementation. Only one project was explicitly lauded ex-post for strong understanding of context and effective engagement with government counterpart and non-government stakeholders (an operation in East Asia). The latter was also praised for having a deliberately limited scope, learning from earlier operations.<sup>41</sup> In several cases, continuity of task team members generated greater awareness of reform dynamics and possible pitfalls. Motivated by previous experience with variable reform commitment, some teams reported more explicit efforts to capture political economy issues and to take these into account in project design. In one case, the team commissioned an explicit political economy analysis of public sector reforms during the implementation phase of the most

> 39 One approved operation remained ineffective blocked in the country‘s parliament due to a combination of difficult institutional rules and inability of the executive to persuade opposition MPs to support approval of the loan. This eventually came  ̳unstuck‘ after a hiatus of 15 months.

> 40 The PAD for a PSCAP in a Southern African country rates the risk related to an (already expected) change in government as  ̳negligible‘ arguing: ―The program sets out to implement some of the be as committed as the current one to the program more difficult and strategic, win-lose changes in (elections will take place before the end of Phase I) the first phase, leaving more of the win-win changes for later phases. Will and capacity to manage change will be embedded in the leadership of the CS during the first phase. The focus on capacity building is a politically neutral approach to public service reform; any government is likely to welcome a public service able to perform well.‖ In fact the change in government brought considerable difficulties for the operation and its development impact.

> 41  ̳The project was focused on a small set of priority interventions for which government agencies‘ commitment was high ...‘. As noted in section III (i) this operation combined a narrow scope with a considerable scale of $100m.

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