An Evaluation of the World Bank's Trust Fund Portfolio

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CHAPTER 6FINDINGS AND RECOMMENDATIONSchanges are needed to foster more effective, efficient, and accountableuse of trust funds. This evaluation recommends that the World Bankadopt a more structured and disciplined approach to the mobilizationand deployment of these funds, based on the following three specificrecommendations:1. For trust funds other than Financial Intermediary Funds. Inorder to better align trust funds with recipient, donor, and Bankstrategic priorities and improve their effectiveness, efficiency, andaccountability for results, IEG recommends that the Bank adopt athree-pillar structure for trust funds, consisting of country-specifictrust funds, partnership programs, and umbrella facilities.Country-specific trust funds: The Bank should continue toaccept trust funds created to support operations in a singlecountry, because these funds have generally worked well infilling financing gaps and deploying donor funds in line withrecipient priorities. They have allowed donors to targetpriority issues or countries, while at the same time helpingmitigate limits of bilateral aid expertise and enhance aidcoordination. The funds should be managed and accountedfor using the same processes as those used for Bank budget orIDA/IBRD lending, and the relevant VPU should beaccountable for their use and results in the context of countryassistance strategies. If the existing trust fund portfolio weremapped to this proposed pillar, the pillar would account fornearly two-thirds of total IBRD/IDA trust funddisbursements.Global and Regional Partnership Programs: For trust fundsupportedmultiple-recipient country programs in whichdonors want to be actively involved in governance andimplementation, a formally structured partnership can fosterstakeholder voice, transparency in government operations,and accountability for results. When partners select thisoption, the Bank should continue to participate in them andrequire that each partnership program has a charter, agoverning body, a management unit, and terms of reference toguide the Bank’s participation. If the existing trust fundportfolio were mapped to this proposed pillar, the pillarwould account for about one quarter of total IBRD/IDA trustfund disbursements.Umbrella Facilities: The Bank and donors should phase outthe other multiple recipient country funds (including thoseexecuted both by recipients and the Bank) and establishinstead a small number of multi-donor, multi-recipientumbrella facilities to mobilize and deploy trust fund resources.This approach would help to solve the problems identified in84
the evaluation, namely operational inefficiency, inadequateaccountability for results, and lack of objective and transparentallocation criteria.Each such umbrella facility would be designed to support oneor more strategic priorities agreed with the Bank. For example,the Bank might establish one facility focused on a prioritytheme, such as governance or social development, whichwould allocate resources upfront to VPUs for work in thethematic area. The administrative arrangements for eachfacility would be designed to consolidate fundraising, allocatefunds predictably and efficiently, and hold Bank staff andmanagement accountable for results. Arrangements need notbe uniform across the facilities and could entail sub-facilitiesor windows to which donors could direct contributions. TheBank would provide a single annual report on each facility tothe Bank’s board and all the facility’s donors (rather thanreporting to donors individually). If the existing trust fundportfolio were mapped to this proposed pillar, it wouldaccount for only about one-tenth of total IBRD/IDA trust funddisbursements.Implementing this recommendation would entail a carefulconsultation process between donors and the Bank,addressing, for example, selection of themes, mobilization ofresources, and phase out of existing trust fund arrangements.IEG therefore recommends that senior management consultwith the Bank’s shareholders and trust fund donors on thebroad parameters of this change, and then launch two or moreumbrella facilities by July 2012, with the intention of making afull conversion by the end of 2016.2. For FIFs. In light of the distinctive nature of the Bank’s role inrelation to FIFs and the FIF portfolio’s considerable size,heterogeneity, varied experience and risks, the Bank shouldstrengthen its framework for guiding its acceptance andmanagement of FIFs going forward. To do so, Bank managementshould:CHAPTER 6FINDINGS AND RECOMMENDATIONSReview experience to date on the development effectiveness ofthe funds and their synergy with the Bank’s own operationsand, based on that review, revisit Operational Policy 14.40’sadequacy for guiding acceptance and management of FIFs as adistinct business line.Seek Board approval for each proposed new FIF.Report to the Board regularly on FIFs’ delivery of intendedresults and the implications for the Bank’s pursuit of its85
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The World Bank GroupWORKING FOR A W
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©2011 The Independent Evaluation G
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CONTENTSAllocation of Trust Fund Re
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CONTENTSFigure 5.3 All Networks, Es
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AcknowledgmentsThis report was prep
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SummaryAs development challenges ex
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SUMMARYchannels? In addition, the B
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SUMMARYinnovative development finan
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SUMMARYdonor funds in line with rec
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Management ResponseIntroductionMana
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MANAGEMENT RESPONSEplay at the leve
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MANAGEMENT RESPONSEattention needs
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MANAGEMENT ACTION RECORDMajor Monit
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Chairperson’s Summary:Informal Me
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1. The Role of Trust Funds in theGl
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CHAPTER 1THE ROLE OF TRUST FUNDS IN
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CHAPTER 2THE WORLD BANK’S TRUST F
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CHAPTER 3THE RELEVANCE AND EFFECTIV
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Page 64 and 65: CHAPTER 3THE RELEVANCE AND EFFECTIV
Page 80 and 81: CHAPTER 4MANAGEMENT AND ACCOUNTABIL
Page 96 and 97: CHAPTER 5THE IMPACT OF TRUST FUNDS
Page 109 and 110: 6. Findings and Recommendations6.1
Page 111 and 112: CHAPTER 6FINDINGS AND RECOMMENDATIO
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Page 117 and 118: Appendix A: Methodology NoteCalcula
Page 119 and 120: Appendix B: Trust Fund Use in the E
Page 121 and 122: APPENDIX B: TRUST FUND USE IN THE E
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Page 125 and 126: APPENDIX C: LIST OF INDIVIDUALS CON
Page 131 and 132: APPENDIX D: CORE TRUST FUND PORTFOL
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Page 139 and 140: APPENDIX E: FINANCIAL INTERMEDIARY
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Page 143 and 144: Appendix F: Reliance on Donor Funds
Page 145 and 146: APPENDIX F: RELIANCE ON DONOR FUNDS
Page 147 and 148: Appendix G: World Bank Operational
Page 149 and 150: Appendix H: Organizational Aspects
Page 151: Appendix I: Trust Fund Support for
Page 154 and 155: ENDNOTES3. Over fiscal 2002-10, the
Page 156 and 157: ENDNOTES31. Cited in a 2008 indepen
Page 158 and 159: SELECTED BIBLIOGRAPHYKharas, H. 200
Page 160 and 161: SELECTED BIBLIOGRAPHY____. 2010l.
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An Evaluation of the World Bank's Trust Fund Portfolio

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