BUSINESS CASE FOR IDA 16 REPLENISHMENT
INTERVENTION SUMMARY
Multilateral Investment (Core Funding)
What support will the UK provide?
The UK has pledged to contribute £2.664 billion to the World Bank’s
International Development Association (IDA) 16th replenishment, which will
run from 1 July 2011 to 30 June 2014.
Why is UK support required?
IDA is primarily funded through donor contributions. Donors meet every three
years to replenish IDA funds and review IDA’s policies and performance.
Negotiation of the sixteenth replenishment (IDA 16) was finalised in
December 2010.
The UK’s recent Multilateral Aid Review (MAR) indicated IDA offers very good
value for money for the UK’s aid budget. IDA closely aligns with the UK’s
focus on poverty reduction and priority sectors. Its comparative advantage is
the breadth and quality of its technical knowledge, expertise and global reach.
Through its size and reach, IDA can have a transformational effect that
individual national donors cannot match.
What are the expected results?
We expect IDA 16 to deliver both direct development results and reforms to
the way IDA is run that will enable it to make a substantial contribution
towards the Millennium Development Goals (MDGs) over the next 3 years
and strengthen its effectiveness and systems so as to improve performance
beyond IDA 16.
Results and Development Impact: Below is a selection of targets of what
will be achieved over the period 2011-2014 from IDA resources:

99-116 million children immunised

0.8-1 million women receiving antenatal care

1-1.2 million teachers recruited and/or trained

37-44 thousand kms of road constructed or rehabilitated

36-42 million people with access to improved water sources

1.8-2.2 million people with access to improved sanitation facilities
IDA also prepares a country level strategy for every country of operation with
a clear set of development outcomes from IDA activities. The new IDA 16
performance framework will monitor progress against these country level
results targets and has set a target for a 22% improvement in the average
performance rating for country strategy implementation.
Reforms and Improvements to Organisational Effectiveness: Through the
IDA 16 replenishment negotiations we helped to secure significant
commitments (in line with the findings of the MAR) to improve IDA's strategic
focus and operational practices in the following priority areas :
 An improved results framework that sets out what we can expect IDA 16
to deliver, both in terms of development impact and improvements in
operational performance;
 Crisis Response Window – a dedicated window to enable IDA to help
poor countries respond to shocks and natural disasters;
 Reforms to improve the World Bank’s performance in fragile and
conflict-affected countries;
 Reforms to improve the World Bank’s performance on gender, and
 Stronger Bank commitments on climate change.
1. STRATEGIC CASE
A. Context and need for DFID intervention
What is the International Development Association (IDA)?
The World Bank is the only multilateral development bank with worldwide
operations. IDA is part of the World Bank Group and was established in 1960
to support World Bank activities in the poorest countries of the world. IDA
aims to reduce poverty by providing highly concessional loans and grants for
programmes that boost economic growth, reduce inequalities and improve
people’s living conditions.
The other organisations that make up the World Bank Group are the
International Bank for Reconstruction and Development (IBRD), the
International Finance Corporation (IFC), the Multilateral Investment
Guarantee Agency (MIGA) and the International Centre for the Settlement of
Investment Disputes (ICSID). IBRD and IDA are collectively referred to as the
World Bank and IBRD, IDA, IFC, MIGA and ICSID are collectively referred to
as the World Bank Group.
IBRD (which serves middle-income countries with capital investment and
advisory services) and IDA have the same staff and headquarters and
evaluate projects with the same rigorous standards. IDA funds are gathered
principally by voluntary contribution from IDA members, transfers of profits
from other parts of the World Bank (e.g. IBRD and IFC) and IDA loan
repayments. IDA is one of the largest sources of concessional financing and
technical assistance to poor countries. Between July 2009 and June 2010,
IDA committed $14.5 billion - 18% of which was on grant terms.
Between 2000-2010, IDA financing has helped:
 provide more than 47 million people with access to a basic package of
health, nutrition or population services
 immunise more than 310 million children and purchase and/or
distribute about 33 million mosquito bed nets to prevent malaria
 provide antenatal care for more than 2.5 million pregnant women
 train more than 3 million teachers, provide more than 105 million
children with new or rehabilitated classrooms and purchase and/or
distribute about 300 million textbooks
 construct or rehabilitate nearly 500,000 improved community water
points and more than 1.5 million piped household water connections
 provide 26 million people with access to an all-season road
Eligibility for IDA resources is based on whether a country has significant
need for concessional development funding – they are the poorest countries
in the world and lack creditworthiness to borrow from the market to fund
necessary development investments. IDA resources are allocated between
eligible countries using the Performance-Based Allocation (PBA) formula. This
is based on each country’s population, income per capita and performance in
implementing policies that promote economic growth and poverty reduction.
Why is DFID supporting IDA?
There are three primary reasons why DFID supports IDA:
 IDA represents very good value for money for the UK’s investment
(both in terms of its focus on poverty and its efficiency and
effectiveness as an organisation – including its ability to respond to
country level priorities). The UK’s significant influence within the World
Bank can promote reforms that can further improve IDA’s performance.
 IDA has a global reach (working in 79 of the very poorest countries –
home to 1.5 billion people who survive on $2 a day or less) and is one
of the world’s largest sources of aid. Making IDA even more effective
will have a significant impact on achieving the MDGs; and
 The UK contribution helps to leverage the financial support of other
donors to IDA where it will have a greater impact on poverty.
The UK’s recent Multilateral Aid Review (MAR) rated IDA as overall providing
the UK with very good value for money. IDA closely aligns with the UK’s focus
on poverty reduction and priority sectors. Its comparative advantage is the
breadth and quality of its technical knowledge, expertise and global reach.
Through its size and reach, IDA can have a transformational effect that
individual national donors cannot match. It is able to play convening and
leadership roles to improve the overall quality of ODA in client countries.
Strong results systems at country level mean that it is able to demonstrate
good delivery against challenging development objectives. Its multi-sectoral
capacity, ability to respond to country level priorities, large size and technical
expertise mean it covers UK development priorities and objectives at scale
and as a critical part of aid architecture. Its criticality is illustrated by often
being a partner of choice for many DFID initiatives in sectoral and thematic
areas.
The MAR identified important areas where IDA’s performance could be
improved - in addressing the needs of girls and women, delivery in conflict
and fragile states, and its partnership behaviour. Improving the effectiveness
in these areas is important to delivering the MDGs. Conflict-affected and
fragile states are some of the poorest countries and have the greater barriers
to development. Insufficient emphasis is often given to the needs of women
and girls even though they are often discriminated against and support for
women and girls can have a transformational impact on the entire family. The
World Bank has good policies on gender but implementation has been weak,
reflecting a range of institutional issues. Both policies and implementation with
respect to fragile states have been weak but key recommendations were
made for new approaches in the 2010 WDR.
The MAR found evidence of IDA being a poor partner, including working alone
on issues that were not key national priorities, limiting its impact and reach
and imposing heavy transaction costs and slow processes. Because IDA is an
important source of finance and expertise, and as a management and
implementing agency for other funds, its weaknesses as a partner can have
important systemic effects.
The UK was the largest contributor to the last IDA 15 replenishment in 2007
pledging £2.134 billion. Our rising share of donor contributions over recent
replenishments contrasts with the steady or decreasing shares of other major
donors. Our total historical funding is around 11% of total contributions.
The UK has significant influence on the World Bank’s reform agenda because
of our appointed seat at the IBRD Board (after the recent capital increases are
paid in we will be joint fifth largest shareholder with France) and our IDA
contributions. This enhances the ability of the UK to support reforms to
improve the World Bank’s performance and impact on poverty reduction.
Robustness of the evidence base: Strong – The business case is based on
the UK’s MAR (2011). The MAR was a comprehensive assessment of value
for money for UK aid of funding through multilateral organisations. Click here
for the full MAR.
B. Impact and Outcome
Results/ Development Impact
The World Bank has agreed to report against a set of future results that
address key MDGs as part of its strengthened results framework, as well as
operational and organisational effectiveness (click here for the IDA 16
Replenishment Report). These prospective results will be aggregated from
project and country level indicators and reflect countries’ priorities. They do
not cover all of IDA’s work, as IDA will remain flexible to countries’ own
priorities, which may change over the period. Also some elements of IDA’s
contribution are difficult to measure (e.g. intermediate outputs such as
improved governance and economic decision-making).
These targets have been estimated by projecting expected results from
projects that will be completed during the IDA 16 period and reflect the
estimated growth in IDA’s project portfolio. They include stretch targets that
exceed IDA’s past results to improve the World Bank’s performance over the
IDA 16 period in these areas. Below are a selection of indicators:

99-116 million children immunised

0.8-1 million women receiving antenatal care

1-1.2 million teachers recruited and/or trained

37-44 thousand kms of road constructed or rehabilitated

36-42 million people with access to improved water sources

1.8-2.2 million people with access to improved sanitation facilities
For the first time, the new IDA 16 Performance Framework will also monitor
and report on the overall performance of IDA at country level and has set
performance standards shown below.
Benchmark
(% rated satisfactory or above)
Country
Assistance
Completion Reports
Strategy 44%
IDA 16
Performance
Standard
66%
Operations in all IDA countries
74%
75%
Operations in Fragile Situations
69%
70%
Reforms - Improvements to Organisational Effectiveness
In conjunction with other IDA contributors we negotiated commitments from
World Bank management to improve IDA’s organisational efficiency and
operational effectiveness. The overall new performance framework for IDA
includes a set of commitments to drive country level performance including by
improving the speed of IDA’s work, increasing IDA’s capacity to monitor its
programmes and improving the way IDA allocates resources. The IDA
document includes a set of ambitious reforms and policy challenges that if
delivered should lead to a significant improvement in IDA’s performance as a
partner and its impact on development results.
The main areas identified by the MAR as in need of improvement are
engagement in fragile and conflict states, weak performance on women and
girls and the weak partnership behaviour displayed by IDA (in particular about
lack of flexibility, high transaction costs, and limited use of country systems).
The key reform commitments include:
 An improved results framework that sets out what we can expect IDA
16 to deliver, both in terms of development impact and improvements in
operational performance. The aim is that a stronger results framework
will ensure that IDA donors can monitor IDA’s overall performance and
help drive performance improvements throughout IDA 16. The creation
of the IDA Results Measurement Framework has also instigated the
development of sector wide indicators and has inspired an improved
results measurement system on the IBRD side of the World Bank’s
operations.
 Crisis Response Window – a dedicated window to enable IDA to help
poor countries respond to shocks and natural disasters.
 Better performance in fragile and conflict-affected countries –
including revising procedures to help speed up delivery in fragile and
conflict states, better partnership with the UN and other donors and an
agreement to review the framework for allocating resources to fragile
and conflict states.
 Better performance on gender – the introduction of targets for
ensuring IDA projects are gender-informed and a commitment to
integrate gender issues into all country strategies.
 Stronger commitments on climate change – the World Bank will
integrate consideration of climate change in all country strategies;
improve systems for tracking the proportion of IDA investments that
address climate change and scale up analytic and advisory activities on
adaptation and mitigation.
Wider reforms agreed for the whole World Bank Group will also improve IDA’s
performance, such as:
 The launch of a new results-based lending instrument, Program for
Results (to complement the two existing instruments of investment and
development policy lending)
 Enhanced financial management, focusing on efficiency and linking
resources, including trust funds, to strategy and performance.
 Further decentralisation, including more staff based in country in Africa.
 Reviewing the World Bank’s organisational structure and human
resource policies.
 Increased transparency of World Bank operations including attainment
of level 1 of the International Aid Transparency Initiative (IATI) and other
accountability measures.
 Roll out of a new risk assessment framework.
For more information, please see the General Capital Increase (GCI) and
Selective Capital Increase (SCI) business case [link].
2. APPRAISAL CASE
A. Determining Critical Success Criteria (CSC)
These CSC set out the key conditions and assumptions which need to be
fulfilled in order for the impact and outcomes documented in the Strategic
Case to be achieved.
Each CSC is weighted 1 to 5, where 1 is least important and 5 most
important based on the relative importance of each criteria to the success of
the intervention.
CSC for Description
Results
1
IDA designs and manages programmes well in
partnership with poor countries
2
Other IDA donors honour their pledges
3
IDA is disbursing funds quickly
CSC for
Reform
1
Strong commitment to reforms from senior Bank
management
2
Board members monitor the Result Measurement
System and Bank performance and hold the World
Bank accountable for delivery
B. Feasible options
Weighting
(1-5)
5
5
4
5
5
Reform
Our reform agenda is defined by the MAR analysis. There are other areas
that IDA needs to reform but the selected areas have been prioritised as
those we judge would result in the greatest improvements in IDA’s
organisational effectiveness and delivery on the ground. We have chosen to
focus reforms on areas where the World Bank is relatively weak (i.e. fragile
states, women and girls and partnership behaviour) and where we believe
the World Bank can lead the wider international donor community (e.g.
results focus, climate change and crisis response). There are other important
reforms that are also being implemented through IDA 16, including to the
borrowing costs that different types of country pay and the share of spending
for regional projects. These are also critical but other donors and partners
will be focusing on these.
Our reform priorities are fully aligned with those accepted by Bank
management, other IDA donors and Bank shareholders in agreeing the IDA
16 performance framework. Our main options going forward are, therefore,
about how to continue to support Management in embedding these reforms
and how to continue to work with other shareholders to monitor and hold the
World Bank to account.
We have considered options for monitoring performance on the ground and
these are explained in more detail in the monitoring sections below. The key
issue is about how to ensure that we have a strong base of evidence about
IDA performance on the ground to complement the World Bank’s own
systems and how we use that evidence effectively as a shareholder and IDA
donor.
Financing and Influencing
The IDA replenishment is a negotiation amongst a group of donors and the
World Bank. Our position was therefore shaped by the position of the World
Bank and other donors, just as our position also influenced others.
The reforms and development results we expect to see from the World Bank
(as outlined in the Strategic Case) are stretching. A key consideration in
determining our financial contribution to IDA 16 and influencing strategy is
what would maximise the UK’s ability to drive forward these reforms. The
options were:
Option 1: A small financial contribution (compared to IDA 15) and
aggressive negotiation position to push for reforms;
Option 2: A generous financial contribution using our position as a leading
supporter of the World Bank to push for reform; or
Option 3: A moderate increase in our financial contribution (compared to
IDA 15) with a ‘critical friend’ approach to influencing to push hard for
reforms.
C. Appraisal of options
In addition, to considering the ability to secure the desired reforms and
improvements we also looked at where the UK’s aid would have the biggest
impact on poverty reduction. The UK’s Multilateral Aid Review sets out clear
principles for allocating aid in response to the findings of the value for money
provided by different multilaterals. In considering the financing volumes for
IDA we considered whether other agencies which were assessed as
providing very good or good value for money could be better candidates for
increased financing or whether funds could be better spent bilaterally. We
also considered whether the contribution could be accommodated within
DFID’s capital budget, the overall target for the increase in the whole IDA pot
and exchange rate factors. Exchange rate factors were important as the rate
between UK Sterling and the Special Drawing Right (SDR, the currency in
which IDA replenishments are negotiated) had depreciated by more than
20% since IDA 15.
A key comparison was between increasing financing for IDA or further
increasing support for global funds such as the Fast Track Initiative, GAVI or
the Global Fund for AIDs, TB and Malaria. Although such funds are
beneficial in their own right, they focus on the delivery of very specific
interventions which are dependent in part on the effectiveness of social
systems in country and the broader economic and governance environment
and infrastructure. IDA helps address these wider complementary
requirements by strengthening overall systems and supporting other less
well-funded MDGs. A mix of UK funding through both global funds and IDA
therefore maximises the UK’s return to poverty reduction. Reducing our
contribution to IDA and increasing our contribution even more towards global
funds would not have had the same impact on the underlying systems on
which the global funds rely.
Capacity to absorb extra financing and ability to leverage additional
resources were important factors in assessing financing options between
different multilateral institutions (e.g. African Development Bank, European
Development Fund etc.). Rebalancing towards bilateral programmes would
have limited the geographical breadth of our impact and would have meant
reductions in finance for some key off track MDGs in countries which are not
DFID focus countries (such as those in francophone Africa).
D. Comparison of options
Of the financing and influencing options outlined in section B, the UK chose
option 3 - a moderate increase in our UK sterling financial contribution
(although exchange rates meant this was a decrease in the SDR value of
our contribution) and the critical friend approach to engagement (i.e. pushing
and supporting the World Bank to do better).
A significant decrease in the UK’s contribution would have been perceived
as the UK no longer supporting IDA and the World Bank’s reform agenda
(despite the MAR findings). Whereas, a significant increase would have
been perceived as blanket UK support for IDA regardless of implementation.
Both would have reduced our credibility with the senior Bank management
and other donors and limited our ability to push for reforms. Option 3, meant
the UK went from being the largest contributor to IDA 15 to the second
largest contributor to IDA 16. Our position showed that the UK remains a
strong supporter of IDA while signalling that we expect the World Bank to
demonstrate a better pace of implementation.
E. Cost Consciousness
The UK’s recent Multilateral Aid Review (MAR) made a detailed assessment
of cost consciousness and found that the World Bank’s past performance
shows relatively good overall control of the administrative budget.
The World Bank’s strengths are:





Adequate cost control systems to ensure costs do not inflate.
Tracks costs of operations.
Can demonstrate some efficiency improvements.
Committed to a flat real budget.
Plays a strong role in helping clients consider public expenditure choices
and strengthening financial management.
The World Bank’s weaknesses are:
 Not yet developed an overarching narrative on how IDA achieves Value
for Money.
 Limited evidence of incentives to generate cost savings in projects.
 Administrative costs are high compared to other multilateral development
banks.
 Staff pay mechanism inflates salaries at the World Bank and across
MDBs.
While the MAR found the World Bank’s overall performance on cost
consciousness was satisfactory, to be considered strong the World Bank
would need a corporate culture that seeks savings and commits to efficiency
improvements as part of a consistent drive to improve value for money - and
not just in response to specific constraints or Board action.
In future dialogue with the World Bank, the UK will include efforts to define
cost effectiveness better, improve the presentation of development results
and better incentivise cost effectiveness and efficiency. As part of this, the
World Bank is developing a Corporate Scorecard which will be used by
Governors and the Board to assess the World Bank’s performance against
targets.
The UK is also working with other shareholders to try and reduce the size of
salary increases as part of the World Bank’s compensation review, but faces
strong opposition from other shareholders.
3. COMMERCIAL CASE
A. Value for money through Procurement
The World Bank’s approach to procurement is to ensure open and fair
competition in all its tenders, so that it procures high quality goods and
services at the lowest cost. It requires procurement of goods and services
through International Competitive Bidding with limited exceptions similar to
those used by other multilateral development banks. There is considerable
oversight and scrutiny of World Bank procurement operations; around 5% of
procurement operations are reviewed internally and a smaller amount of
operations go to external review every year.
However, some have criticised the World Bank for being overly rules bound.
The MAR notes that procurement procedures are criticised by borrowing
countries and other donors for imposing high transaction costs, delays and
not achieving competitive prices. The lack of use of country procurement
systems reduces scope for cost efficiency gains from local procurement. The
MAR also notes that staff do not seem adequately rewarded or incentivised to
reduce overall project or programme costs over time and do more with less –
the dominant incentive is to deliver high quality projects to the Board on time
and within a pre-defined administrative budget.
The World Bank has begun a review of its procurement policies and practices
to address these concerns and better align procurement with the World
Bank’s development objectives. At the Mid-Term Review of IDA 16
(December 2012), there will also be a review of procurement and fiduciary
processes in fragile and conflict states to speed up implementation. In
addition, the Operations Policy and Country Services Vice-Presidency has
recently set-up an informal team to help operations teams quickly resolve
problem procurements.
In addition, the fact that the World Bank’s procurement system can be overly
complicated makes it difficult for DFID and others to co-finance and set up
joint projects, leading to limited use of country systems. The World Bank’s
pilot scheme to use country systems for procurement was largely a failure due
to overly high standards and inflexibility. However, the World Bank plans to
make progress with its new Program for Results lending instrument which will
rely on and strengthen country systems, as well as improving the ease of cofinancing with other donors.
4. FINANCIAL CASE
A. How much it will cost
The UK’s contribution is £2.664 billion between July 2011 and June 2014.
The UK’s pledge to IDA is subject to Parliamentary approval.
B. How it will be funded: capital/programme/admin
The funds will come from DFID’s capital budget and have been foreseen in
the 2010 Spending Review.
C. How funds will be paid out
Parliament has to approve a Statutory Instrument for the UK’s contribution to
IDA. The UK will then deposit Promissory Notes (PN) over the three years of
the IDA period. As PNs are treated as an irrevocable commitment, they are
scored to DFID’s budget as soon as they are deposited. The three year IDA
period is when the World Bank commits the resources.
Each PN is encashed over nine years enabling IDA 16 resources to be
disbursed over eleven years.
Cash balances
The World Bank has established IDA's minimum liquidity target as 33% of a
three-year average of annual gross disbursements. We are liaising with the
World Bank to understand how they plan to meet this target over the IDA 16
period and will assess to what extent their current practice represents prudent
and efficient financial management and avoids cash balances significantly in
excess of the target.
D. How expenditure will be monitored, reported, and accounted for
IDA provides externally audited annual accounts.
5. MANAGEMENT CASE
A. Oversight
The UK is closely engaged with the World Bank. The Secretary of State for
International Development is the UK Governor of the World Bank, with the
Chancellor of the Exchequer as the Alternate Governor. The Governor’s role
is facilitated by an Executive Director and Alternate. The UK has the benefit
of a single member constituency delegation, allowing it to focus on UK
objectives at the World Bank Board. Each donor country nominates an IDA
Deputy, who is a senior official to negotiate on behalf of their government on
the three-yearly IDA replenishments. The UK Deputy is DFID’s Director for
International Finance Division.
The Deputies develop the strategy for the IDA replenishment period and
agree on major policy issues (for example the terms on which countries will
receive IDA funding), and reforms to improve IDA’s effectiveness. An IDA
Board oversees allocations of IDA resources. The Board has the same
shareholders as the IBRD Board but different voting rights, for example the
UK’s voting right in the IBRD Board is 4.21% but is 5.44% in the IDA Board
(before the recent General and Selective Capital Increase).
The UK Deputy is supported by DFID’s International Financial Institutions
Department (IFID) in London and the UK Delegation. The Policy Adviser in
DFID’s World Bank Team is the project officer for IDA 16.
B. Management
DFID’s relationship with the World Bank is well established. IDA 16 will not
require additional management or resources to manage – DFID London has
the equivalent of 6 full-time staff members working on World Bank
institutional issues and the UK Delegation has the equivalent of 7 full-time
staff members working on the World Bank.
The reform agenda is based on continuing close engagement in operations
and policy dialogue, at the Board Meetings and at Annual & Spring Meetings
of the World Bank. These are led by the UK Delegation which has regular
meetings with senior management in the World Bank. DFID London provides
advice to the UK Delegation and participates in meetings with Bank
management from time to time. DFID London leads on meetings with the
World Bank in DFID and arranges discussions with key DFID management
and experts. To ensure we are well informed of Bank performance, the team
working on the World Bank in London works closely with other DFID
colleagues, both in country offices and in Policy Division (especially on
climate change, women and girls and fragile states) who are well informed of
the World Bank’s work in their countries and policy areas.
DFID London and the UK Delegation support ministers during Governors
meetings, usually at the Spring Meetings in April, and the Annual Meetings in
September or October each year.
These meetings also provide an
opportunity to discuss performance on reforms with other shareholders.
DFID London and the UK Delegation both hold regular discussions with their
counterparts in other countries and attempt to agree a common approach to
supporting reform in the World Bank.
C. Conditionality (optional – see HTN)
There is no conditionality.
D. Monitoring and Evaluation
Monitoring:
The World Bank provides annual reports and accounts in September. The
reports are based on the World Bank’s own evaluation of its performance.
Every quarter it provides a Quarterly Business Review. It is currently
developing a Corporate Scorecard which will provide a simplified measure of
the World Bank’s performance and will report against its new strategic
directions. In addition, the World Bank’s activities are independently
evaluated by the Independent Evaluation Group (IEG). The World Bank’s
financial data is audited by an external and independent auditor.
IDA 16 has an improved Result Measurement System, which tracks and
measures the degree to which IDA is helping countries to develop their
economies and reduce poverty. The World Bank will report against the
Results Measurement System every September. In December 2012 the IDA
Board will conduct a mid-term review of IDA 16, to examine progress against
the agreed commitments and identify issues going forward.
IDA 16 will see the establishment of four IDA working groups to help improve
monitoring and enhance dialogue between donors, borrowing countries and
World Bank management on critical issues. The working groups will look at
the financial sustainability of IDA, results and effectiveness, fragile and
conflict states and growth.
DFID will also closely monitor and engage with the World Bank and other
stakeholders to improve IDA’s performance and ensure the necessary
reforms are implemented. The DFID logframe is based on the World Bank’s
IDA 16 Results Measurement System, focusing on the UK’s priority results
and reforms. In accordance with DFID rules, we will conduct annual reviews
of IDA 16 during the IDA period (July 2011-June 2014) that will be placed on
the DFID website. This will draw on DFID monitoring of IDA performance as
part of the MAR follow-up (a mini-MAR is scheduled for 2013). We are setting
up a country monitoring system, to ensure we have regular feedback from
DFID country offices on World Bank performance in IDA countries against
priorities outlined in the results framework.
A UK priority was to establish a dedicated crisis response window in IDA 16
to ensure IDA was able to quickly and flexibly help poor countries deal with
economic shocks and natural disasters. We will also continue to monitor and
learn lessons from the implementation of the IDA 15’s temporary crisis
response window to ensure lessons are learnt and used to improve the new
IDA 16 Crisis Response Window.
Evaluation:
The World Bank has its own independent evaluation function – the
Independent Evaluation Group (IEG). The IEG undertakes a number of
thematic evaluations every year, frequent country level evaluations and a
number of individual loan evaluations.
The Head of the IEG reports directly to the World Bank’s Board and actions
resulting from IEG evaluations are monitored by the Board. IEG’s evaluation
ratings also form a key component of IDA 16’s monitoring framework and the
World Bank scorecard.
It is also expected that the UK’s Independent Commission for Aid Impact
(ICAI) will at some stage assess the quality of evaluations at the World Bank,
cover multilateral organisations in some of their thematic evaluations and
also evaluate DFID efforts to influence the multilateral system.
E. Risk Assessment
Four key risks could undermine the impact of IDA. These are:
1. Changes in senior World Bank management that weaken the commitment
to reform
The reforms to improve IDA’s performance require committed leadership and
well focused management. Anything which disrupts this, particularly if less
reform-minded leaders take up senior posts in the World Bank, could delay or
derail reforms. The situation will be monitored closely and coordinated action
taken with other key shareholders if required.
The risk is assessed as low likelihood and high impact.
2. The global economic crisis puts borrowers off course to achieve the
MDGs.
We continue to work with the World Bank and other partners to ensure the
poorest countries are adequately supported to deal with the consequences of
the financial crisis and achieve all the MDGs. The establishment of a new
Crisis Response Window in IDA 16 will help ensure the World Bank is able to
quickly support poor countries if there is another global economic shock.
The risk is assessed as medium likelihood and medium impact.
3. Significant disagreement within the Board that blocks IDA policy
development.
The UK will continue to build good relationships with other Board members
and senior World Bank management to build consensus over key policies
issues and to ensure effective decision-making and leadership.
The risk is assessed as low likelihood and high impact.
4. IDA donors do not honour their IDA 16 pledges.
A number of donors are in arrears from past replenishments and several
large donors face severe domestic budgetary pressures. There is a risk that
resources for IDA 16 will fall substantially short of what was pledged. The UK
has sought to address this risk by using high level fora to bolster the
international commitment to protect aid resources for the poorest countries.
The risk is assessed as medium likelihood and medium impact.
F. Results and Benefits Management
Most of the indicators in the DFID logframe are based on the World Bank’s
IDA 16 Results Measurement System focusing on UK priority results and
reforms. The remainder come from other World Bank sources.