World Bank’s aid allocation may undermine growth

27 November 2008

An article by researcher Elisa Van Waeyenberge’s published by the Centre for Development Policy & Research in London criticises the way the World Bank allocates IDA funds. The Bank’s aid is selectively allocated based on the use of the Country Policy and Institutional Assessment (CPIA) score (see Update 52, 43). "The CPIA is derived from judgments of Bank staff on country performance on a set of macroeconomic, structural, social and governance criteria … which embody a set of well-known neo-liberal economic norms". Better performing countries receive on average five times as much as the worst performers.

She argues that “selective allocation of aid based on the CPIA risks locking in an extensive policy agenda with ambiguous, if not adverse, repercussions for growth.” Van Waeyenberge also notes that the CPIA ignores need in making aid allocations and assumes that governments have full control over policy outcomes to the neglect of external and structural issues.