IEG reports mixed World Bank effectiveness

17 February 2011

The World Bank’s arms-length Independent Evaluation Group (IEG) released its annual report, Results and performance of the World Bank Group in November last year.  Whilst the Bank’s own reviews of its performance find its projects to be mostly satisfactory, performance against stated objectives shows “some decline at the World Bank in terms of projects exiting the portfolio in the past three years.” The IEG suggests that this is driven by declines in certain sectors, noting that “current performance has fallen relative to long-term trends in areas such as health, nutrition, and population and even in transport.” 

Echoing previous reviews (see Update 68), the IEG highlights concerns that although International Finance Corporation (IFC, the Bank’s private sector lending arm) outcomes in Africa “have improved over the decade, they remain lower than in other regions.” Furthermore, “relative outcomes of projects in fragile states at the World Bank have fallen from being close to overall Bank ratings in 2006 to considerably below them in fiscal [year] 2009.” The Bank’s poor performance in the health sector has previously been the subject of severe criticism from the IEG and others (see Update 66).

The report also repeats IEG concerns about the increased use of financial intermediaries, such as banks and private equity funds, as conduits for IFC lending (see Update 73), noting that “monitoring lines of credit is difficult, as supervision of sub-borrowers is delegated to financial intermediaries.”  The IEG notes that “at the IFC, the rapidly growing guarantee instrument segment is not yet tracked by the monitoring and evaluation Development Outcome Tracking System.”

The report contains a special section analysing how IEG recommendations have been taken up at the Bank, finding that “two-thirds of IEG’s recommendations from evaluations since 2003 have been substantially adopted after four years.” However, “the share of recommendations rated high and substantially adopted dropped from 60 per cent in 2007 to 36 per cent in 2010.”