Finance

Background

World Bank country assistance strategies

16 April 2010 | Inside the institutions


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The country assistance strategy (CAS) is the most important World Bank country-level document: it sets out the indicative level and type of assistance the World Bank Group will provide to a country, usually for a four-year period. The CAS should link a country’s development priorities to selected World Bank Group support. It is also intended to promote coordination with other development partners.

CASs were introduced in 1990 for countries borrowing from the World Bank’s International Development Association, which provides finance to the poorest countries, and were extended to all borrowers in 1994. A CAS is supposed to be prepared after consultation with country authorities, civil society and other stakeholders. While the World Bank Group describes the process as participatory, the CAS is not a negotiated document; differences between the country’s and World Bank Group’s agendas should be highlighted.

Identifying needs

A CAS involves a far reaching ‘diagnosis’ of a country’s development challenges, particularly the incidence, trends and causes of poverty. It considers a country’s governance, institutional development and implementation capacity. This assessment draws on information from the government and other sources, but is heavily based on analytical work by the World Bank Group (see Update 39).

Responding to critiques of its top-down approach, the Bank has in recent years shifted the starting point away from what it can offer, and towards the country’s own development vision. For low-income countries, CASs are supposed to be based on priorities identified in their poverty reduction strategy papers. However, these did not always match the thematic activities to be financed by the Bank’s trust funds (see Update 47). Since 2008, therefore, all CASs have been required to fully reflect trust fund-financed activities.

In countries lacking a medium-term development strategy, or where the World Bank Group has insufficient country knowledge – often post-conflict states – an ‘interim strategy note’ is prepared instead of a CAS.

Deciding the World Bank Group’s role

Proceeding from this analysis, the CAS sets out a selective programme of World Bank Group support for the country, though this is only indicative and does not make commitments. Support can comprise finance, advisory services and technical assistance. From June, however, the Bank’s board will conditionally approve individual operations alongside CASs. In deciding the programme, the performance of the World Bank Group’s existing portfolio in the country is taken into account, as are the Bank’s ‘comparative advantage’ over other development actors and the country’s preferences.

Most CASs are prepared jointly with the International Financial Corporation (IFC), the private-sector arm of the Bank. However, a recent Bank paper states that there are few examples of successful strategic collaboration across the World Bank Group. Lessons are now being drawn from a pilot of joint World Bank-IFC CASs in 2008-9, which could lead to a more formal country strategy process that would inform the joint CAS.

Since 2005, CASs have been organised around specific development results, with a framework of targets and indicators to enable monitoring of Bank and country performance. However, targeting results is not entirely consistent with the flexible nature of the CAS.

Next steps in the CAS cycle

Reflecting the drive for better coordinated aid, some CASs have been fully developed and implemented with other development partners, such as other donors. However, a recent Bank retrospective states that joint implementation has proven difficult and plans a new good practice note on collaborative CASs.

A mid-term progress report is required for each CAS. Reflecting changes in country demand and priorities, the strategy and results framework can be adjusted. Countries’ need for additional support during the financial crisis led to significant departures from CASs, but uncertainty over how the crisis would develop delayed the preparation of new strategies.

The CAS cycle concludes with a completion report, a self-assessment – validated by the Bank’s Independent Evaluation Group – that informs the preparation of the following CAS. Forthcoming guidance for Bank staff is intended to make the completion report more useful in terms of learning and accountability.