Author: Lara Cornaro

This blog is one in a series by experts across the Center for Global Development ahead of the IMF/World Bank Spring Meetings. Each post in the series will put forward a tangible policy “win” for the World Bank or the broader MDB system that the author would like to see emerge from the Spring Meetings. Read the other posts in the series, and stay tuned for more.

On the face of it, the case for a general capital increase for the World Bank should be obvious and urgent in our age of the polycrisis. It is a very efficient way to support an increase in development and climate lending by an order of magnitude. A $20 billion paid-in capital increase would support $200 billion of cumulative lending over 10 years, taking into account the leveraging of the new capital, the timing of loan repayments, and the resulting increases in net income that could add more to capital. The US, as the largest shareholder, would contribute a little over $3 billion, likely spread over five years, a drop in the US development assistance bucket.

But as we go into Spring Meetings of the IMF and World Bank, consideration of such an increase is not on the agenda. Many would see this omission as another case of the rich world avoiding its responsibilities, especially as it drove most of the climate change that is imposing growing losses, damage, and suffering in the developing world. There is, of course, truth to that. But it would be a mistake to look no further for an explanation.

Compare the foot dragging on multilateral development bank (MDB) capital increases generally to the greater willingness on the part of the US and other donors to step up to funding for what are called vertical funds—like the Global Fund to Fight AIDS, Tuberculosis and Malaria. The Global Fund has a clear purpose and tangible results relatively easy to measure. A glance at its website shows impact easily understood: 50 million lives saved, 23.3 million people on antiretroviral therapy for HIV, and 5.3 million people treated for TB in 2021. The US contribution to the Global Fund for FY23 is its highest ever, $2 billion.

By comparison, most shareholders and other stakeholders, if asked, would be hard pressed to articulate what World Bank success at an institutional and country level looks like. Its mandate is not only much broader—eliminating extreme poverty and promoting shared prosperity—it is also more difficult to attribute such economy-wide outcomes to particular World Bank interventions. In a sense, the World Bank and other MDBs are in the worst of both worlds. When global poverty was receding, the MDBs could not credibly claim principal credit for an outcome that so clearly depended on many factors outside their control. And now that poverty is resurgent, they are expected to swim upstream against very strong currents.

Perhaps as a result, both MDB management and shareholders tend to define success as institutions largely by the volume of finance inputs they supply: climate-related finance targets are an example. The problem is that strategic decisions about finance allocation then become a zero-sum game—more finance for one purpose comes at the expense of others (except during infrequent general capital increases). We are seeing the consequences now in the debate over the mission of the World Bank Group (WBG). Borrowing countries mistrust the focus on climate and global challenges, not because they disagree on their importance, but because they fear a misallocation of finance, in their view, between development and climate-related finance, especially in the absence of plans to increase capital.

It is not as if the World Bank does not measure results at the corporate level. Under Client Results, the WBG tracks globally: people with enhanced access to transport, expanded renewable, and other power generation; people with access to electricity and ICT; beneficiaries of “job-focused interventions”; people with access to financial services; farmers reached with assets and services; students reached; people who receive essential health, nutrition, and family planning services; people with access to improved water and sanitation; countries moving toward disaster resilience; and reductions in greenhouse gases.

These are generally outputs rather than outcomes like household income, educational attainment, and infant mortality, but at least they are consistent and measurable and related to World Bank-supported activities. In each case, the bank shows improvements over baselines. The problem is that it is hard to assess whether progress is rapid enough or whether the World Bank’s finance is being used efficiently and effectively. How much did it cost to increase global renewable power generation 318,379 gigawatt hours from FY19 to FY22? Could the World Bank have done more? There are no targets at the corporate level, which is understandable since the bank operates based on a country-driven model.

But what happens at the country level? Let’s take an example of a Country Partnership Framework (CPF), the World Bank’s country strategy document (replacing the earlier Country Assistance Strategy), for the Democratic Republic of Congo. The DRC CPF is a useful example because challenges and needs for that country are formidable, the WBG clearly has an important role to play, and DRC has a relatively recent CPF for FY22-26, presumably reflecting lessons learned as well as the increased focus on climate-related investments. How does the strategy measure success?

The strategy has three broad focus areas: (1) stabilization with reduced risk of conflict, (2) improved infrastructure and other service delivery and human capital development, and (3) strengthened governance for increased private investment. It has 33 objective indicators of success (plus 26 supplementary progress indicators), ranging from the number of direct beneficiaries of social safety net programs, to increased regional trade, to the number of people with access to climate-resilient roads, to the increase in girls’ secondary school enrollment rates, to revenue from forest carbon sales, to maintaining macroeconomic stability by avoiding monetary financing of the deficit. Baselines are measured and targets are set, so progress can be tracked. It is a credible and objective results framework.

But with this broad a program and this many indicators, the challenges of determining whether the partnership is ultimately a success are obvious. It is a comprehensive development program, with interventions across the economy. It is supported by 79 ongoing and indicative future WBG operations. It does not focus on transformation of a few selected sectors, but rather addresses a whole array of admittedly pressing problems. Inevitably some indicators will be met and others will not. What constitutes success? Meeting more than half the targets? Are some more important than others? Should success be measured by macroeconomic outcomes—growth, poverty reduction?

We can look at past performance reviews to get a sense of how the World Bank itself assesses performance. The Completion and Learning Review (CLR) is the WBG’s self-evaluation. The current CPF has an annex containing a CLR for the DRC country assistance strategy (CAS) for FY13-FY17. It is a comprehensive and generally honest assessment. Interestingly, it notes upfront that the CLR, “is not an assessment of DRC’s progress toward its development goals, but rather of program achievements directly linked to WBG-supported activities and to WBG engagement in DRC during the CAS period.” That makes sense from an attribution perspective, but it also acknowledges the crucial distinction between the magnitude of challenges to meeting the Sustainable Development Goals in DRC and what the WBG can achieve.

That CAS had four strategic objectives, not greatly different from those of the current CPF: (1) increase state effectiveness and improved governance, (2) boost competitiveness to accelerate private sector-led growth and job creation, (3) improve social services delivery and increase human development indicators, and (4) address fragility and conflict in the Eastern provinces. The results framework targeted 14 outcomes. One was achieved (increased access to clean water and sanitation), five were mostly achieved, and eight were partially achieved. Hard to say if that is or is not success.

But several of the report’s lessons for future WBG engagement bear emphasis, perhaps most fundamentally this statement: “the forthcoming CPF should reflect a realistic level of ambition, given the degree of government capacity and demonstrated commitment to the necessary reforms.” In that connection, the report urges that future engagement include some capacity building in every project and “start small, in a manner commensurate with existing capacity. Similarly, start with those provinces where there is a strong commitment to the desired reforms.” The report also urges collaboration across interdependent sectors and between investment project lending and development policy lending to maximize impact, such as between the road/transport program and the investments in agriculture. And it calls for more country-managed coordination across DRC’s 20 biggest development partners.

Taking all this together, one can reasonably conclude that the WBG needs an approach that scales back on breadth and boosts depth if it is to convincingly demonstrate success. That suggests a focus on a few achievable targets in perhaps one to three sectors that are on the critical path for—and make large contributions toward—development and climate challenges and are also client government (either central or local) priorities. It means bringing together all of the tools needed to address, in that sector or sectors, the policy, governance, capacity, project development, and other relevant obstacles, and to finance the relevant investments. An example might be sustainable agricultural production that benefits smallholder farmers. By concentrating resources and different kinds of support, the WBG is more likely to meet targets set. If the WBG could say, in country x, “we set an ambitious target of doubling the income of smallholder farmers in ways that are sustainable and resilient and we/the country achieved it,” I would argue that that would be enough to convince stakeholders of the World Bank’s value.

But shareholders take note. That means that the World Bank must be free to determine, in collaboration with client country governments, a few country-specific achievable priorities for deep and sustainable sectoral transformation. It means that large shareholders cannot set a priori WBG finance allocation priorities. It means that the World Bank executive board should focus on performance in meeting targets under country strategies, rather than on individual project approval. It does not mean abandoning climate-related activities or the focus on poverty, but rather integrating analysis of potential poverty and climate-related gains into all decisions for sector priorities in country strategies and in the projects/activities chosen.

This blog is one in a series by experts across the Center for Global Development ahead of the IMF/World Bank Spring Meetings. Each post in the series will put forward a tangible policy “win” for the World Bank or the broader MDB system that the author would like to see emerge from the Spring Meetings. Read the other posts in the series, and stay tuned for more.

The World Bank’s International Development Association (IDA) is the largest source of concessional loans and grants for the world’s poorest countries. Its financing, if well-deployed, will continue to contribute to client countries’ recovery from the COVID-19 crisis and their longer-term growth. Among IDA’s key substantive priorities is gender and development—which sits alongside human capital; fragility, conflict, and violence; jobs and economic transformation; and climate change as an overarching special theme. But despite IDA’s inclusion of gender equality as a theme beginning in 2016, it remains at the bottom of IDA-borrowing government officials’ own priorities. What reasons might lie behind this misalignment, and how should it be addressed?

The IDA20 final replenishment report positions gender equality as a core priority, stating that there is a “broad consensus that closing gaps between women and men, and boys and girls are essential for reducing poverty and boosting shared prosperity.” But a 2022 survey by Prizzon et al.reveals that there is little appetite from government officials in lower-income countries for World Bank financing to promote gender equality. Less than one in three respondents in IDA client countries referenced gender equality as a key priority, in contrast to 60 percent of government officials in central and line agencies who would like IDA to concentrate on health, education, water and sanitation, energy and agriculture.

Given the drive to ensure that development decision-making is increasingly localized, there is an understandable impulse to take this data at face value, and, in turn, to question whether gender equality is worth maintaining as a core IDA priority, especially in the face of global challenges like climate change and pandemic preparedness. But two things should be considered first:

1. Gender equality may just have an image problem.
2. Government officials’ priorities may be misaligned with those of their citizens.

Gender equality’s image problem

The term “gender equality” is loaded in many contexts. It’s been politicized and rendered polarizing, often by actors who position gains for women and girls as a zero-sum trade off with those for men and boys, or who fearmonger to their target audiences by suggesting that gender equality would erode communities’ culture and values. (In fact, evidence suggests that these claims are baseless, with gender equality a core tenet of many African cultures, for example, prior to colonization.)

Even where gender equality is not perceived as a Western-imposed threat to local cultures in lower-income countries, it may be seen as a “nice to have” at best, but not a serious economic issue, in contrast to the need for investment in hard infrastructure, agriculture, or extractives. And though it’s unfortunate that women’s and girls’ equality is not seen as an important end in itself, it’s clear that instrumentalist arguments will be needed to fix gender equality’s image problem among IDA country government officials. Gender equality needs a rebrand—one that effectively communicates it as an essential driver of economic development and growth.

Rigorous evidence is already out there to prove this point, but Prizzon and co-authors’ data suggests that it has not reached government officials in IDA countries. One way forward would be to generate and share more country-specific evidence on the macroeconomic benefits of gender equality, to complement the existing evidence base, which largely takes a global view. New research—ideally conducted by researchers in IDA countries—should also compare the payoffs of policies and investments to narrow gender gaps with those that are commonly accepted to catalyze growth. For example, in Norway, Kjersti Misje Ostbakken documents that women’s labor force participation has driven the strength of the country’s economy—significantly more than its oil revenues. Norwegian policymakers have acknowledged the value of women’s contributions to economic growth and continue to prioritize policies aimed at driving women’s equal labor force participation and advancement, such as those aimed at providing quality childcare, skills training, and equal access to finance. Similar analyses in IDA countries could go a long way in shifting officials’ willingness to prioritize similar social protection, labor market, and financial sector policies.   

Within IDA’s own framing of gender equality, it may be more effective to get specific—setting goals that are clearly connected with government officials’ sector-specific or wider macroeconomic objectives. The IDA20 final replenishment report reflects four gender equality-related priorities: (1) improving gaps in human endowments; (2) removing constraints for more and better jobs; (3) removing barriers to women’s ownership; and (4) addressing control of assets and enabling women’s voice and agency. But by focusing instead on concrete, sector-specific goals—such as increasing agricultural productivity by boosting women farmers’ yields, or increasing labor force participation by increasing young women’s school to work transition—government officials may have an easier time seeing the relevance of gender equality-related goals for their own agendas.  

Disconnect between government officials and citizens

In an ideal scenario, government officials’ preferences would accurately reflect and represent the priorities of citizens in their countries. But in contexts with constraints on democracy—including disproportionate constraints facing women as they seek to access channels of influence—this scenario is left unrealized. Prizzon and co-authors do not publish data on the genders of their respondents, so we don’t know whether the sample overrepresents men’s perspectives (though we know women are on the whole underrepresented in positions of political leadership).

Recognition of a broader disconnect between government and citizen priorities has led others to call for increasing pathways for civil society engagement in IDA priority setting. More direct communication with civil society representatives can help ensure IDA priorities are demand-driven, and support for civil society organizations (CSOs) through IDA would enable these organizations to complement governments in achieving development outcomes in their countries. At present, very little IDA financing is directed towards CSOs, consistent with broader trends in official development assistance. An even smaller sliver reaches women’s rights organizations. In future conversations about CSO engagement with IDA, it will be critical to ensure that CSOs invited to the table are themselves inclusive of the populations they are meant to represent, with women’s groups being a key player.

A shorter-term option: Harnessing incentive structures

Beyond facilitating government officials’ access to evidence on gender equality’s benefits and ensuring civil society actors from IDA countries can play a meaningful role in guiding IDA priorities—both of which will be longer-term endeavors—incentive structures can be harnessed to encourage client countries to address the binding constraints on women’s equal participation in economies and societies. The World Bank’s new Invest in Childcare Initiative offers a model: governments that decide to use IDA loans to invest in childcare provision will receive a 1:1 matching grant, made possible through contributions from the United States, Canada, Germany, Australia, and philanthropic funders to the initiative. The IDA20 replenishment saw the adoption of the first target focused on childcare—and its return-on-investment case is increasingly clear. Financing directed at this underinvested area can create millions of jobs as well as increase unpaid caregivers’ workforce participation and productivity, with knock-on benefits for tax revenue and GDP growth. While this case is being made to in-country decision-makers, matching grants and other incentive arrangements can help jumpstart progress. 

We can’t ignore the fact that gender bias is real, and not all hearts and minds will be quick to change, even in the face of compelling evidence documenting gender equality’s contributions to other development goals. But where reluctance around gender equality as an IDA priority is rooted in a lack of information, or perhaps in misinformation, or a disconnect between citizens’ priorities and the decisions of their government representatives, it’s time to shift tactics to ensure that gender equality not only stays but gets elevated on the global agenda. In the face of compounding crises and considerations of channeling IDA resources to tackle new global challenges, gender equality should not fall off the agenda. In fact, remembering to put it front and center will allow limited resources to stretch that much further.