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1. Can the World Bank Deliver on Climate Change? Testing the Evolution Roadmap through Loss and Damage

Author:
Michael Franczak
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
International Peace Institute (IPI)
Abstract:
The establishment of a new Loss and Damage Fund and Funding Arrangements at COP27 and the Fund’s operationalization and initial capitalization at COP28 were milestones in the UN climate regime. The World Bank engaged in the Transitional Committee (TC) process as a potential host and trustee for the Fund, a member of a new “High-Level Dialogue,” and a direct provider of loss and damage (L&D) support. The implementation of the Fund and Funding Arrangements—the mosaic—is the first big test of the World Bank’s commitment to evolving its policies, practices, and relationships. This paper discusses the World Bank’s engagement with loss and damage, including the context of broader reforms aiming to modernize the Bank, such as the Bank’s Evolution Roadmap, which identifies three guiding elements for the Bank’s evolution: a new mission and vision, a new playbook, and new resources. One of the key components of the Bank’s evolution is the introduction of climate-resilient debt clauses (CRDCs) or “pause clauses.” Pause clauses feature prominently in recent initiatives to reform the international financial architecture, such as Bridgetown 2.0, the Africa Climate Summit’s Nairobi Declaration, and the Vulnerable Twenty Group’s (V20) Accra-Marrakech Agenda. The paper also discusses the debate over the World Bank’s hosting of the Fund and the set of conditions and safeguards, determined by developing countries, that the Bank would have to meet in order to host the Fund. Finally, the paper discusses priority actions for the High-Level Dialogue, including resource mobilization, institutional protocols, and the losses and damages of the future.
Topic:
Climate Change, World Bank, Loss and Damage (L&D), and Conference of the Parties (COP)
Political Geography:
Global Focus

2. Fragility, Conflict, and Violence at the World Bank—Recommendations for the Spring Meetings

Author:
Sarah Cliffe, Daniel Friedman, Betty N. Wainaina, and Céline Monnier
Publication Date:
04-2024
Content Type:
Commentary and Analysis
Institution:
Center on International Cooperation (CIC)
Abstract:
The World Bank Governors meet at the International Monetary Fund (IMF)-World Bank (WB) Spring Meetings this week to discuss progress on the World Bank’s Evolution Roadmap. Much of this discussion will focus on financing, including commitments to the hybrid facility and the prospects for the upcoming International Development Association (IDA) replenishment. Equally important, however, is whether and how the World Bank continues to play a leading role in international support to countries affected by fragility, violence, and conflict. In this piece, the authors provide recommendations for the International Monetary Fund and World Bank Spring Meetings 2024, considering how the World Bank Evolution Roadmap addresses conflict, fragility, and violence; and the importance for the Bank to maintain its financial allocations to prevention in the upcoming International Development Association round of financing.
Topic:
Development, World Bank, Conflict, Violence, IMF, and Fragility
Political Geography:
Global Focus

3. United Nations and World Bank Collaboration in Security and Justice Sectors: Linkages to Development

Author:
Sarah Cliffe, Betty N. Wainaina, and Natacha Meden
Publication Date:
07-2024
Content Type:
Special Report
Institution:
Center on International Cooperation (CIC)
Abstract:
The links between security and development cannot be said enough. Effective and accountable security and justice institutions are essential to anchor peace and accelerate development but only if these institutions are people-centered, inclusive, accountable, and based on respect for human rights and the rule of law. Over 600 million people are living in countries that are considered politically estranged today. Many of these countries have faced and continue to face security challenges that have been significant drivers of grievance and contestation. Addressing governance challenges in the security and justice sectors in such circumstances is critical at a moment when all the remaining United Nations (UN) multidimensional peacekeeping operations have been requested to initiate or intensify transition planning. These transitions are taking place in countries and regions where the nature of violence and conflict is changing—becoming more protracted, involving transnational non-state armed actors, amid geo-political contestations and proxy wars. This study highlights that despite the long history of UN and World Bank engagement in the security and justice sectors, there has not been much strategic collaboration. Indeed, while there have been a few very compelling examples of joint work such as public expenditure reviews in the security and justice sectors in Liberia or Somalia, joint diagnostics and knowledge products as well as disarmament, demobilization, and reintegration (DDR) operations in a few countries, or strategically sequenced mutually reinforcing interventions for example in the case of The Gambia, these instances are the exception rather than the norm. The study finds that there is a lot more that can be done to promote a more systematic and strategic partnership between the UN and the World Bank in security and justice sector engagements. This could range from information sharing, joint analysis where necessary, reinforcing each other’s messaging, and the coordination and harmonization of efforts to leverage respective convening platforms and relationships. Strengthening this work is a challenge that would require engagement from the most senior UN and World Bank leadership as it would involve a cultural transformation and fresh understanding of organizational and staff incentives. Included in this report are eight joint and individual recommendations ranging from the cultural or strategic, to the more technical for policymakers across both multilateral institutions to implement and bring into their organizations.
Topic:
Security, Development, United Nations, World Bank, and Justice
Political Geography:
Global Focus

4. Why and How Multilateral Development Banks Support Improved Outcomes for Economic Migrants and Refugees

Author:
Helen Dempster, Martha Guerrero Ble, and Stephanie López Villamil
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Economic migrants and refugees can bring both benefits and costs to their hosting countries. If well-integrated, they can support themselves, their families, and their hosting countries as producers and consumers. Both economic migration and forced displacement are therefore integrally linked with development outcomes. Recognizing this, multilateral development banks (MDBs) are supporting their beneficiary member countries to improve outcomes for economic migrants and refugees, in the form of billions of dollars in grants and loans, as well as technical assistance, policy dialogues, and knowledge exchanges. This paper provides an introductory snapshot of some of the financing instruments, projects, and strategies used; particularly innovative approaches; and challenges MDBs face in expanding their engagement. It is hoped this paper will be useful to anyone who engages with MDBs and wants to understand how they engage on economic migration and forced displacement, particularly as these issues continue to grow in importance.
Topic:
Development, Migration, World Bank, Refugees, and Banking
Political Geography:
Global Focus

5. ABCs of the IFIs: Understanding the World Bank’s IDA21 Replenishment

Author:
Erin Collinson, Clemence Landers, Justin Hurley, and Grace Miner
Publication Date:
06-2024
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The International Development Association (IDA)—the World Bank’s arm that works in low- and lower-middle-income countries—is one of the largest sources of development assistance for the world’s poorest countries. It is also a crucial tool for resource-constrained governments to borrow on affordable terms compared to other creditors, including Chinese entities. IDA supports eligible countries whose annual per capita incomes fall below an established line (currently $1,315 in FY2024). Because IDA provides grants and highly subsidized loans to its client countries, its funds need to be replenished by donors every three years. Replenishments are year-long negotiations where the World Bank’s shareholding countries, of which the US is the largest, negotiate a policy and financing package for the next three-year cycle. This year, 2024, is an IDA replenishment year for the institution’s twenty-first round of funding (“IDA21”), culminating with a pledging session in December to finalize IDA21’s financing envelope.
Topic:
Development, World Bank, and International Development Association (IDA)
Political Geography:
Global Focus

6. Multilateral Development Banks in Fragile and Conflict-Affected Situations: Overview of Key Policy, Financial, and Operational Issues

Author:
Koldo Echebarria
Publication Date:
12-2024
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
This paper presents an overview of significant policy, financial, and operational challenges encountered by multilateral development banks (MDBs) in fragile and conflict-affected situations (FCS). The data indicates that MDBs have increased their involvement in financing FCS compared to bilateral and other multilateral donors, with the World Bank playing the most significant role. This is explained by financial and operational comparative advantages inherent in the MDB business model, despite their implicit biases and constraints. The paper reviews the strategies and framework documents adopted by MDBs to address FCS as a distinct development challenge, highlighting the complexity of translating knowledge advancements and lessons learned into operational categories and clear priorities. It also examines how MDBs are placed regarding the recommendations of the "peace-humanitarian-development nexus," which is central to the international consensus for addressing FCS. The evolution of the financial capacities of MDBs and the criteria for resource allocation in response to the needs of FCS are analyzed. The paper concludes by posing a set of questions that MDBs and their shareholders should consider as they develop reforms to meet FCS-specific requirements and strengthen performance and outcomes.
Topic:
Development, World Bank, Banking, Multilateral Development Banks (MDBs), and Sustainable Development
Political Geography:
Global Focus

7. Reforming the World Bank to Play a Critical Role in Addressing Climate Change

Author:
Pedro Albarran, Patricia Bliss-Guest, and Laura Tuck
Publication Date:
03-2023
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The current World Bank model focuses on reducing poverty and promoting equitable growth, while considering environmental and social sustainability. Programming of resources is country-driven, and resources are allocated to programs and investments according to priorities of client government authorities. Despite the appeal of this approach and its many benefits, it has left numerous global public goods (GPGs), particularly those related to climate change, underfinanced, undermanaged, and unachieved. The resulting limited levels of investment and programs have significant global cost and, potentially, extreme ramifications. While there has been considerable reflection on the question of mandate, as well as on options for improving financial engineering of the multilateral development banks (MDBs) to increase resources to better address GPGs, there has been little attention given to reforms and changes in the internal business model that would be required at an MDB like the World Bank if it were to implement a new global mission on climate change. This paper examines the changes in the internal business model that would allow the World Bank (or other MDBs) to better address climate change—and, with some adjustments, potentially, other GPGs.
Topic:
World Bank, Climate Finance, Multilateral Development Banks (MDBs), and Sustainable Development
Political Geography:
Global Focus

8. What Counts as Climate? Preliminary Evidence from the World Bank’s Climate Portfolio

Author:
Guido Núñez-Mujica, Vijaya Ramachandran, and Scott Morris
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The World Bank is one of the largest providers of development finance to poor countries. In recent years, it has been under immense public pressure, mostly from its richest shareholders, to expand its climate portfolio. We examine the World Bank’s climate portfolio at the project level for the period 2000-2022 and find that financing is skewed towards mitigation projects. These projects lack estimates of greenhouse gas (GHG) emissions reductions, and there is no standardized reporting on GHG estimates across the portfolio. Further, hundreds of projects tagged climate—many in poorer countries—appear to have little to do with climate change mitigation or adaptation. We recommend that projects labeled climate should be accompanied by a clear explanation of why they mitigate emissions (with estimates of GHG reductions) or how they help increase resilience to climate-related events. Likewise, the World Bank must do more to identify outputs and verify outcomes for climate projects.
Topic:
Climate Change, Development, World Bank, and Sustainable Development
Political Geography:
Global Focus

9. Warming or Cooling on World Bank Climate Finance: What Drives Country Demand?

Author:
Clemence Landers, Karen Mathiasen, and Samuel Matthews
Publication Date:
12-2023
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The climate agenda has been a dominant feature of World Bank reform efforts, with President Banga aiming to both mobilize new resources and increase the proportion of total funding for climate-related projects. The stakes are high: greenhouse gas (GHG) emissions in many borrowing countries are elevated and rising, dimming prospects for meeting the 2030 Paris Agreement target to limit warming to a 1.5 degrees Celsius increase. To date, stakeholders have focused on how to mobilize new funding for climate mitigation reflecting an emphasis on the supply side (e.g., financing) of the agenda. But there has been little analysis on the demand side (or project pipeline). The assumption is that more money will generate more demand. But this does not necessarily follow. In this paper, we discuss major factors that will influence demand for climate mitigation projects, especially from the largest emitters of greenhouse gases (e.g., China, India, Brazil, Indonesia, Mexico). Our assessment is that factors like World Bank borrowing costs and access to alternative sources of finance will likely limit demand absent financial incentives, which could prove costly and difficult to resource at the scale needed to have meaningful impact. We also see a risk that these incentives could be used inefficiently absent a rigorous analysis to identify where they could have the most impact and a robust framework for assessing results.
Topic:
World Bank, Climate Finance, and Sustainable Development
Political Geography:
Global Focus

10. Leveraging Knowledge Generation for Policy Impact: Recommendations for the World Bank

Author:
Amanda Glassman, Julia Kaufman, Ruth Levine, and Janeen Madan Keller
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Since the 2006 release of the CGD report When Will We Ever Learn? Improving Lives Through Impact Evaluation, there have been nearly two decades of progress in generating and using evidence for public policy decisions and development programs. There has been a steady increase in the number of impact evaluations—a rigorous approach that establishes the attributable net impact of a project or program. Their ability to assess attribution makes impact evaluations uniquely well suited for decision making. Nevertheless, the COVID-19 pandemic put a spotlight on an unfinished agenda and underscored the need for high-quality, timely, and context-specific evidence. Across sectors, decision makers in governments, aid agencies, multilateral organizations, and NGOs have not yet fully harnessed the value of evidence for better public policies. Numerous challenges limit evidence use. On the demand side, impact evaluations may lack relevance to policy decisions and fail to respond to decision makers’ priorities, timelines, and questions. On the supply side, decision makers often lack institutional incentives and funding to generate and act on relevant evidence. Current funding models compound these challenges by contributing to misaligned incentives between policymaker needs and academic researchers. In response to these challenges, CGD launched the Working Group on New Evidence Tools for Policy Impact to develop a renewed agenda for the next generation of investments in impact evaluation and related evidence systems to enhance their value for real-world decision making. The group brought together policymakers and experts to review the progress and obstacles to the use and utility of evidence for global development. Its final report highlights how far the field has come in addressing critiques about the scale, generalizability, and policy utility of impact evaluation, and offers recommendations to the development community on “what and how to fund to deliver on the promise of impact evaluation and bolster the broader evidence ecosystem.” The working group proposes five ways to improve impact evaluation funding and practice: (1) design evaluations that start from the policy question and decision space; (2) harness technology for timely, lower-cost evidence; (3) advance locally grounded evidence-to-policy partnerships; (4) enact new incentives and structures to strengthen evidence use; and (5) invest in evidence leaders and communities.
Topic:
International Cooperation, World Bank, Finance, and Banking
Political Geography:
Global Focus