UK announces priorities for World Bank

14 September 2011

In August, the UK Department for International Development (DFID) released its new priorities for reform of the World Bank: UK engagement with the World Bank Group 2011/12. The priority list does not include an assessment of past performance, as it is the first released by the new Conservative/Liberal Democrat coalition government that took office in 2010. This will continue the previous Labour government’s recent tradition of reporting annually against its objectives for the Bank. Until 2007, the UK had released a three year institutional strategy for the Bank, and reported annually against that.

It follows DFID’s assessment of the Bank as part of its multilateral aid review (MAR, see Update 75). Three of the five issues that have defined DFID’s recent approach to the Bank, as set out in the MAR, are confirmed: results and efficiency; fragile states; and climate change. The two others have narrowed down broad areas to a more specific focus: the private sector has changed into the International Finance Corporation’s (IFC’s) poverty focus; and more substantively, gender has become “enhanced impact on the off-track MDGs [Millennium Development Goals] including girls and women.”

Despite claiming a focus on results, most of the 17 specific objectives are process linked, and few contain much substantive detail. For example, one objective is to make sure “a strong, convincing WDR [World Development Report] on Gender is published”, without any indication of what a “strong, convincing” WDR would look like, or how that could be used to improve performance on women’s rights at the Bank.

In other areas, where the targets are more outcome focussed, there is frequently a lack of detail that leaves them open to a wide degree of interpretation. On energy, for example, DFID wants the Bank to “move away from lending for fossil fuels” and says the Bank should have “stretching targets for clean energy lending” in its new strategy, without saying what these targets should be. The UK had previously pushed for 60 per cent of World Bank energy lending to be for clean energy (see Update 67), though without specifying how it would overcome the controversial methods used by the Bank to calculate what counts as ‘clean’ energy (see briefing).

The overall perspective represents a vote of confidence in existing Bank structures and reform processes, with many of the objectives related to ensuring ongoing Bank reforms work well. There are no signs yet of the government having developed an independent agenda for change at the Bank. For the first time, there are also no objectives for or mentions of the ongoing governance problems at the Bank (see Update 77, 70), though the rising influence of middle-income countries is mentioned.

Some themes do emerge. Despite the Bank’s chequered history and recent slump in performance in the Middle East and North Africa (MENA, see Update 77, 76), the document supports an active policy of Bank engagement in the region, frequently encouraging it to do more. Though the private sector is not a standalone objective, it is a recurring theme. For example, one DFID objective is that “the IFC develops a new conflict and fragile states strategy and scales up its activities in conflict and fragile states.” Despite criticisms of the overemphasis that the Bank has placed on the private sector’s role in healthcare provision (see Update 66, 65), the UK wants the Bank to develop “innovative ways of working with the private sector” on health. It also pushes for “greater private sector leverage and innovation in technology and financial instruments” for the Climate Investment Funds (CIFs), housed at the Bank (see briefing).