The World Bank shareholding review – reform or ritual?
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Article summary
This Inside the Institutions explores the World Bank’s 2025 Shareholding Review, a governance mechanism intended to achieve equitable and legitimate representation of shareholders. It examines the persistent imbalance in voting structures across the Bank’s institutions and the limited outcomes of past reviews. It also considers civil society’s calls for structural reform, contrasting them with the Bank’s narrow focus on technical adjustments.
As the World Bank Group embarks on its 2025 Shareholding Review, civil society organisations (CSOs) and policymakers alike are once again confronted with the familiar question: will this review lead to a meaningful realignment of power within the institution, or will it simply reproduce longstanding imbalances that have defined its governance structure for decades? (see Inside the Institutions, IMF and World Bank decision-making and governance).
Mandated under the Bank’s governance framework, the quinquennial shareholding review aims for an equitable balance of voting power relative to countries’ economic positions and contributions to the Bank. Each of the Bank’s institutions uses different formulas reflecting their distinct mandates. The International Bank for Reconstruction and Development (IBRD) and the International Finance Corporation (IFC) – the Bank’s medium-income country and private sector arms respectively – share a similar model: both allocate votes based on a combination of share votes (one per capital share) and basic votes, granted equally to all members and adjusted to represent 5.55 per cent of total voting power. In contrast, the International Development Association (IDA), the Bank’s low-income concessional lending arm, uses a different method, tied to donor commitments as well as membership votes, happening via the three year replenishment cycle. The Multilateral Investment Guarantee Agency (MIGA), the Bank’s guarantee arm, uses a unique formula, combining share votes with parity votes that equalise power between two member categories, regardless of capital size. This governance structure contrasts sharply with the United Nations governance system, the Security Council exempted, where each country holds one vote, regardless of economic size – a model widely viewed by CSOs as more democratic and inclusive.
Historical context: uneven foundations
The 2025 Review seeks to review and adapt the voting power distribution within the IBRD and IFC – yet current shareholding patterns reveal a landscape marked by legacy and geopolitical dynamics, with the US holding veto power over all major decisions. Recent analysis presented by the World Bank in a meeting with CSOs revealed the scale of this dysfunction. Both advanced and emerging economies appear on the list of underrepresented countries, according to the formula – China, the US, the UK and India among them. At the same time, Saudi Arabia, Venezuela, Japan and Russia are significantly overrepresented, having more voting power relative to their current economic size or contributions. This fragmentation is not only a technical anomaly, it reflects deeper structural inconsistencies that make it difficult to build coalitions, forge compromises, or advance governance reforms.
Past shareholding reviews exemplify how this process is constrained by severe limitations and deeply entrenched in geopolitical dynamics. The 2010 review resulted only in a 3.13 percentage point shift to developing countries, and a capital increase of $86.2 billion for the IBRD and $200 million for the IFC. China’s voting power at the IBRD rose from 2.77 per cent to 4.42 per cent, surpassing the UK, Germany and France to become the third-largest shareholder, yet this share still falls short of reflecting the country’s true economic weight in the global economy. Modest gains for Brazil, India and South Korea came at the expense of European countries, with the UK, Germany and France each losing around half a percentage point.
Subsequent reviews in 2015 and 2020 failed to meaningfully alter the balance of power, with the 2018 agreement adopting a dynamic formula, where shares are 80 per cent based on GDP and 20 per cent based on IDA contributions, ensuring that voting power remains mainly in the hands of advanced economies.
Benchmarking reform: technical fixes or political smoke?
A central focus of the preparatory phase for the 2025 Shareholding Review is the development of a new benchmark for voting power within the IFC. Although various options were considered, the IBRD shareholding structure – historically used as the default reference – remains the approach with the broadest support among executive directors, as highlighted in a 2024 Development Committee paper.
Long-term, the board chairs also called for the development of private-sector indicators as elements of a new IFC formula “to reflect the different nature of IFC to IBRD, especially in light of the growing importance of the private sector mobilisation agenda.” This recognition stems from IFC’s mandate to mobilise private capital. However, given the Bank’s longstanding bias toward private-sector approaches often at the expense of public interest (see Observer Winter 2023, Summer 2023, Spring 2023), any metrics used must be thoroughly scrutinised to ensure they also reflect positive development outcomes.
These technical tweaks stand in stark contrast to long-standing civil society demands for a fundamental overhaul of World Bank governance system which concentrates decision-making power into the hands of a few wealthy countries. In 2022, more than 140 CSOs issued a joint call not only for greater transparency and accountability, but for an end to the Bank’s overreliance on corporate and financial actors. The statement urged the Bank to meaningfully reform its governance by strengthening democratic oversight and public participation, and prioritising social and environmental justice over market-driven metrics.
Reform in a fragmented geopolitical context
Hopes for significant reform remain slim as the 2025 Review unfolds amid deepening geopolitical tensions. Ongoing wars in Gaza and Ukraine, marked by widespread human rights violations, coupled with escalating US-led trade restrictions and strategic rivalries, have strained prospects for multilateral cooperation. In this fractured context, the World Bank faces mounting scrutiny, particularly from Global South countries who view its governance as outdated and disconnected from today’s development needs.
In a January 2025 statement, the Group of 77 and China urged that the review “achieve genuine voice and participation for developing countries.” This demand is echoed by coalitions of climate- and debt-vulnerable nations. The V20 Finance Ministers called for reforms aligning governance and finance with urgent development priorities (see Dispatch Annuals 2024). Likewise, UNCTAD continues to emphasise the need for multilateral development bank governance reform – a call that, unfortunately, went largely unheeded in the disappointing outcome of the 4th International Conference on Financing for Development (FfD4) in Sevilla this June. While some G7 countries, like Germany, support inclusivity in principle, highlighting that the World Bank “is not an American bank, it’s a world bank”, they stop short of advocating a substantial voting reform.
Civil society groups have criticised the EU for resisting structural changes and diluting bolder governance proposals. Emma Burgisser of UK-based CSO Christian Aid highlighted that “During the FfD4 negotiations, the Global South could not have been clearer in setting out their expectations for the 2025 World Bank Shareholding Review and were successful in securing renewed commitments from 192 countries to achieve an equitable balance of voting power at the World Bank. If the Bank once again fails to deliver on these expectations, that’d be strike three, at which point they should be out of the running to lead the international development finance system and the proposal by the Group of the 46 Least Developed Countries to initiate a comprehensive UN review of IFI governance systems should be reconsidered.”