Is the World Bank Effective?

The World Bank's Independent Evaluation Group has launched its Annual Review of Development Effectiveness.  It is an honest, and somewhat depressing, account of what the Bank has achieved.  According to the Washington Post:

Among 25 poor countries probed in detail by the bank's Independent Evaluation Group, only 11 experienced reductions in poverty from the mid-1990s to the early 2000s, while 14 had the same or worsening rates over that term. The group said the sample was representative of the global picture.

"Achievement of sustained increases in per capita income, essential for poverty reduction, continues to elude a considerable number of countries," the report declared, singling out programs aimed at the rural poor as particularly ineffective. Roughly half of such efforts from 2001 to 2005 "did not lead to satisfactory results." During that period, new World Bank loans and credits aimed directly at rural development totaled $9.6 billion, or about one-tenth of total bank lending, according to the group.

Comment:  I suspect that many people will use this report to confirm their prejudices.  If you are an aid sceptic, and you do not read the report carefully, you might conclude that this shows that the money spent by the World Bank is wasted.  But this is not what the evaluation finds.  It finds that many reforms of development assistance that are being implemented around the world  are likely to be effective.  The evaluation finds:

  • growth alone is not enough: growth delivers poverty reduction more effectively when it occurs in sectors and regions where most of the poor live and work;
  • satisfactory project outcomes alone do not ensure country sector impact: what matters is the long term development of in-sector and cross-sector strategies that complement each other;
  • pressure to show results quickly can divert attention from the quality of results;
  • achieving and maintaining results requires public sector institutions that are accountable to domestic stakeholders, not donors;
  • the long time required to achieve many of the intended results underlines the importance of continuity and predictability of donor engagement;
  • results depend on the commitment and ownership of recipient governments.

These recommendations are consistent with the progressive aid agenda, increasingly being implemented by the World Bank, DFID and some other development agencies.  It is, however, an agenda that is sometimes under attack from sceptics of government aid, many of who minstead recommend a project-based approach, in pursuit of short-term, more measurable targets.  This so-called bottom-up approach is often at the expense of the long term, cross-sectoral institutional improvements that really drive sustained and systemic change.

Finally, kudos to the Bank for publishing a thorough warts-and-all analysis of its weaknesses as well as successes. 

More from Ezra KleinWashington Post.

1 thought on “Is the World Bank Effective?”

  1. Owen

    The evaluation is an interesting read and I agree that the Bank deserves praise for publishing such an honest report.   In my view, it raises a couple of key issues for development agencies:

    First, there would seem to be a tension between making the case for aid / communicating success / countering negative stereotypes of Africa etc and the need for honest, robust evaluation that highlights weaknesses that need to be addressed.  My perception – though it's only a perception so don't take it too seriously – is that development agencies and the development community are focused on making the case for aid (e.g. the case for 0.7%) and so have incevntives not to highlight the problems / weaknesses of aid.

    Second, and linked to the first point, the tension between the need for realistic objectives versus the understandable desire to be ambitious.  The World Bank evaluation highlights this issue with respect to country assistacne strategies, but I think it has wider application.  It seems to me that there are incentives for all those working in development to set rather unrealistic objectives – the project manager looking to get more funding who argues that his / her project will result in massive improvements in the lives of the poor; the country director arguing that more funding to his / her country team will produce significant results in the next three years.  Whilst it's important to be ambitious, there is surely a need for development agencies to be more realistic in what they claim they can achieve, is there not?

    Finally, I have to say I don't quite understand your final paragraph and it's reference to the progressive aid agenda versus a "project-based approach".  I've taken a look at DFID's website and see numerous references to successful projects.  Indeed, DFID has a Public Service Agreement to "achieve a sustained increase in the index of DFID's bilateral projects evaluated as successful."  So I guess its the kind of projects rather than projects per se that you have concerns about.  Is that right?


    Owen replies:  Thanks Pete. I don't think it is particularly controversial that DFID is trying to move from project approaches to programmatic aid where possible. It is an explicit target, which is reported in the Autumn Performance Report  (pdf; see page 50).  So we believe that programmatic aid is more effective where it can be used.  

Leave a Reply

Your email address will not be published. Required fields are marked *