Origins of the Development Portfolio Management Group
DPMG has its origins at the World Bank.
In the early 1990s, the World Bank's Task Force on Portfolio Management evaluated the Bank's approach to managing its lending portfolio. It discovered that almost two out of every five closed loans had failed to achieve their development objectives. Furthermore, the evaluation found that the Bank's existing system for monitoring its active portfolio, which relied on self-reporting by those responsible for designing and supervising the implementation of projects, was failing to detect these problems.
The Task Force recognized that the Bank needed a reliable portfolio management tool that would allow for corrective measures before projects closed to increase the chances that they would achieve their objectives. In response, the World Bank's Quality Assurance Group (QAG) was established in 1996 with a mission to monitor the quality of the investment portfolio early in the project cycle, to advise on ways of rescuing failing projects, and to identify strategies for avoiding future failures.
Over the next 14 years, the group pioneered innovative approaches to assessing portfolios during project implementation and assessed more than 4,000 World Bank investment projects and analytic activities. Its unique approach was to assess projects mid-stream while they could still be saved from failure and to use independent panels of experts with extensive development experience to conduct the evaluations.
It conducted many special assessments for sectors, programs, regions, and countries. Although the results of early QAG assessments were bleak, more effective means of rescuing failing projects were gradually identified and integrated into operational practice. The result was continuous improvement in the World Bank's overall performance.
QAG also reviewed the effectiveness of various Bank units in delivering their mandates. For example, it assessed the alignment of these units’ strategic plans with their activities and their means of measuring their performance.
Over time, a number of players in economic development, including regional development banks and bilateral donors, approached QAG for help in reviewing their active portfolios. While the group did what it could to help these parties, its mandate and workload at the World Bank limited the help that it could provide. When the World Bank allocated its quality assurance function to each of its six regions as part of a 2010 decentralization strategy, QAG's core management team realized that it could make QAG's innovative quality assurance services more broadly available to the economic development community.
The result was the establishment of the DPMG at USC’s Center for Economic and Social Research under the leadership of Xavier Legrain, director of the former QAG.