The Matrix System at Work - Independent Evaluation Group - World ...

Appendix I
Budgetary Incentives
65. As part of the Independent Evaluation Group’s (IEG’s) assessment of the Bank’s
matrix system, the Bank’s budget was reviewed to better understand the impacts of
budgetary incentives on the effectiveness of the matrix. Information was primarily
obtained from the Bank’s budget data and the analysis was informed by interviews
with sector managers, country management teams, regional operations teams, chief
administrative officers, and resource management staff. This section describes the
components of the Bank’s budget and contextual background before highlighting
the key findings further below.
66. Bank budget resources are made up of three sources of finance: 1) the Bank’s
administrative budget which is approved by the Board, 2) reimbursable and fee
income which is received from clients for services rendered such as externally
financed outputs, fee based services, and trust fund management fees, and 3) bankexecuted
trust funds (BETFs) which are funds received from donors to be used
alongside the Bank’s administrative budget but earmarked for specific activities. 1,2
It should be noted that only the Bank’s administrative budget is negotiated to the
unit level with reimbursables, fee income, and BETFs to varying degrees considered,
but not incorporated into the budget negotiation process and therefore their
amounts are largely an artifact as opposed to a strategic allocation of the full funds
available to conduct Bank activities. Unless otherwise noted, all figures in this
appendix refer to total sources of finance and are listed in 2010 constant US dollars. 3
67. As shown in Figure I.1, the Bank’s matrix related budgeting process involves
allocations to each regional and network Vice Presidential Unit (VPU) which are
then negotiated and allocated within each VPU according to strategic priorities
and work program agreements. For the regions, the budgeting process flows from
the regional vice presidents to the country units (country directors, country
management units, CMUs) with some funds held back for regional functions such as
1 Trust Fund Support for Development: An Evaluation of the World Bank’s Trust Fund Portfolio (IEG
2011).
2 This analysis does not include other types of trust funds including recipient-executed trust funds
(RETFs) which are executed in accordance with a grant agreement between the Bank and the
recipient and financial intermediary funds (FIFs) which transfer funds to third-party recipients based
on instructions from a governing entity and which the Bank does not provide operational oversight.
3 Throughout this appendix budget figures are reported from the Bank’s cost reporting system as
assigned to the fund center (budget holder). As they are not disaggregated in the Bank’s reporting
system, Bank budget figures include both actual expenditures from the Bank’s budget as agreed by
the Bank’s Board and non-BETF external financing (reimbursables and fee income). All budget
figures are reported in 2010 constant US dollars (millions) using the Bank’s corporate finance unit’s
deflator.
197