An Evaluation of the World Bank's Trust Fund Portfolio

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SUMMARYdonor funds in line with recipient priorities.They have allowed donors to target priorityissues or countries, while at the same timehelping mitigate the limits of bilateral aidexpertise and enhance aid coordination. Thefunds should be managed and accounted forusing the same processes as for Bank budgetor IDA/IBRD lending, and the relevant vicepresidential unit (VPU) should be accountablefor their use and results in the context ofcountry assistance strategies. If the existingtrust fund portfolio were mapped to thisproposed pillar, the pillar would account fornearly two-thirds of total IBRD/IDA trustfund disbursements.Global and Regional PartnershipPrograms: For trust-fund supported multiplecountryprograms in which donors want to beactively involved in governance andimplementation, a formally structuredpartnership can foster stakeholder voice,transparency in governance and operations,and accountability for results. When partnersselect this option, the Bank should continue toparticipate and require that each partnershipprogram have a charter, a governing body, amanagement unit, and terms of reference toguide the Bank’s participation. If the existingtrust fund portfolio were mapped to thisproposed pillar, the pillar would account forabout one-quarter of total IBRD/IDA trustfund disbursements. Umbrella Facilities: The Bank and donorsshould phase out the other multiple-recipientcountryfunds (including both those thatsupport Bank-executed activities and thosethat support recipient-executed activities) andestablish instead a small number ofmultidonor, multirecipient umbrella facilities tomobilize and deploy trust fund resources. Thisapproach would help to solve the problemsidentified in the evaluation—operationalinefficiency, inadequate accountability forresults, and lack of objective and transparentallocation criteria.Each such umbrella facility would be designedto support one or more of the strategicpriorities agreed by the donors and the Bank.For example, the Bank might establish onefacility focused on a priority theme such asgovernance or social development, whichwould receive trust fund contributions andallocate resources upfront to VPUs for work inthe thematic area. The administrativearrangements for each facility would bedesigned to consolidate fundraising, allocatethe funds predictably and efficiently, and holdBank staff and management accountable forresults. Arrangements need not be uniformacross the facilities and could include subfacilitiesor windows to which donors coulddirect contributions. The Bank would providea single annual report on each facility to theBank’s Board and all the facility’s donors(rather than reporting to donors individually).If the existing trust fund portfolio weremapped to this proposed pillar, it wouldaccount for only about one-tenth of totalIBRD/IDA trust fund disbursements.Implementing this recommendation wouldentail a careful consultation process betweendonors and the Bank, addressing, for example,selection of themes, mobilization of resources,and phase out of existing trust fundarrangements. IEG therefore recommendsthat senior management consult with theBank’s shareholders and trust fund donors onthe broad parameters of this change, and thenstructure and launch two or more umbrellafacilities by July 2012, with the intention ofmaking a full conversion by the end of 2016.2. FOR FIFS. In light of the distinctive nature of theBank’s role in relation to FIFs and the FIFportfolio’s considerable size, heterogeneity, variedexperience, and risks, the Bank should strengthen itsframework for guiding its acceptance andmanagement of FIFs going forward. To do so,Bank management should:Review experience to date on thedevelopment effectiveness of the funds andtheir synergy with the Bank’s own operations,and, based on that review, revisit OperationalPolicy 14.40’s adequacy for guidingacceptance and management of FIFs as adistinct business line.Seek Board approval for each proposed newFIF.Report to the Board regularly on FIFs’delivery of intended results and thexii
SUMMARYimplications for the Bank’s pursuit of itsdevelopment mandate and strategies.The review of FIFs and any resulting revisions ofthe Bank’s framework should be presented to theBoard by the end of 2011.3. IMPLICATIONS FOR AID ARCHITECTURE. Trustfunds are helping to address bilateral aidlimitations and fill operational gaps in traditionalmultilateral mechanisms, including IDA, notablyby providing pooled financing for specificcountries, targeted national development issues,and global public goods. They also serve tocoordinate governmental and nongovernmentalsources of aid and support programs with newforms of governance. But their potential addedvalue, their aid effectiveness, and their coherencewith other elements of the international aidarchitecture varies considerably across the manyways they are currently used. It would be useful,therefore, for the international aid community toreflect on the reasons for the gaps in themultilateral system that lead donors to use trustfunds, and to assess the comparative advantagesof the trust fund and other aid vehicles. Suchreflection would help to identify opportunities forreforms in the multilateral aid architecture,including the World Bank, while allowing trustfunds to specialize in situations where themultilateral institutions alone cannot be fullyeffective. The Bank should initiate such anassessment and a discussion with its shareholdersto explore the comparative advantages ofmultilateral and trust fund aid modalities beforethe 2012 Annual Meeting.xiii
Page 2 and 3: The World Bank GroupWORKING FOR A W
Page 4 and 5: ©2011 The Independent Evaluation G
Page 6 and 7: CONTENTSAllocation of Trust Fund Re
Page 8 and 9: CONTENTSFigure 5.3 All Networks, Es
Page 10 and 11: AcknowledgmentsThis report was prep
Page 12 and 13: SummaryAs development challenges ex
Page 14 and 15: SUMMARYchannels? In addition, the B
Page 16 and 17: SUMMARYinnovative development finan
Page 20 and 21: Management ResponseIntroductionMana
Page 22 and 23: MANAGEMENT RESPONSEplay at the leve
Page 24 and 25: MANAGEMENT RESPONSEattention needs
Page 26 and 27: MANAGEMENT ACTION RECORDMajor Monit
Page 28 and 29: Chairperson’s Summary:Informal Me
Page 31 and 32: 1. The Role of Trust Funds in theGl
Page 33 and 34: CHAPTER 1THE ROLE OF TRUST FUNDS IN
Page 39: CHAPTER 1THE ROLE OF TRUST FUNDS IN
Page 42 and 43: CHAPTER 2THE WORLD BANK’S TRUST F
Page 56 and 57: CHAPTER 3THE RELEVANCE AND EFFECTIV
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CHAPTER 3THE RELEVANCE AND EFFECTIV
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CHAPTER 4MANAGEMENT AND ACCOUNTABIL
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CHAPTER 5THE IMPACT OF TRUST FUNDS
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6. Findings and Recommendations6.1
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CHAPTER 6FINDINGS AND RECOMMENDATIO
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CHAPTER 6FINDINGS AND RECOMMENDATIO
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the evaluation, namely operational
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Appendix A: Methodology NoteCalcula
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Appendix B: Trust Fund Use in the E
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APPENDIX B: TRUST FUND USE IN THE E
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APPENDIX B: TRUST FUND USE IN THE E
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APPENDIX C: LIST OF INDIVIDUALS CON
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APPENDIX D: CORE TRUST FUND PORTFOL
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Appendix E: Trust-Funded FinancialI
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APPENDIX E: FINANCIAL INTERMEDIARY
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APPENDIX E: FINANCIAL INTERMEDIARY
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Appendix F: Reliance on Donor Funds
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APPENDIX F: RELIANCE ON DONOR FUNDS
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Appendix G: World Bank Operational
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Appendix H: Organizational Aspects
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Appendix I: Trust Fund Support for
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ENDNOTES3. Over fiscal 2002-10, the
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ENDNOTES31. Cited in a 2008 indepen
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SELECTED BIBLIOGRAPHYKharas, H. 200
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SELECTED BIBLIOGRAPHY____. 2010l.
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An Evaluation of the World Bank's Trust Fund Portfolio

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