An Evaluation of the World Bank's Trust Fund Portfolio

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MANAGEMENT RESPONSEattention needs to be given to understanding the organizational and political dimensionsunderpinning donor behavior.ConclusionManagement finds this evaluation to be of good quality and important in identifyingimportant issues for consideration as it goes forward with the next round of trust fundreforms. Despite less than full agreement with some of the specifics in therecommendations, management will actively use IEG’s findings in formulating action andreporting to executive directors. Specifically, IEG’s findings on FIFs are already informingthe preparation of a strengthened framework for guiding the Bank’s acceptance andmanagement of FIFs, to be presented to the Board in FY12. Management is also activelyreviewing three important aspects of non-FIF trust funds—fund raising, cost recovery, andconsolidation—and will report to the Board on progress and for decisions in the context ofregular reporting on trust funds.xviii
Management Action RecordMajor Monitorable IEG RecommendationsRequiring a Response1. For trust funds other than FIFs. To better align trust fundswith recipient, donor, and Bank strategic priorities andimprove their effectiveness, efficiency, and accountability forresults, IEG recommends that the Bank adopt a three-pillarstructure for trust funds, consisting of country-specific trustfunds, Global and Regional Partnership Programs (GRPPs),and umbrella facilities.Management ResponseNot Agreed. Management does not agree to this three-pillarstructure. While management is interested in betterunderstanding IEG’s perspective, it does not currently seethe usefulness the proposed typology as presented. Thethree-pillar structure also does not take into account thattrust funds are vehicles for channeling aid resources (that is,they are a funding source) and not programs in and ofthemselves.Management notes that regardless of the governancearrangement, the Bank is responsible for managing allIBRD/IBRD trust funds, including those supporting GRPPs,in accordance with Bank policies and procedures (for BankBudget or IDA/IBRD lending). “Shared governance” in thecase of GRPPs does not create shared accountability forthe use of funds provided to the Bank in trust, (though it canmean that other partners—donors, and even otherstakeholders—may join with the Bank in making decisionson the strategic direction or fund allocation within theprogram).Specific comments on the bullet points provided with theoverall IEG recommendation are provided below.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 the limits of bilateral aid expertise and enhance aidcoordination. The funds should be managed and accountedfor using the same processes as for Bank budget orIDA/IBRD lending, and the relevant vice presidential unit(VPU) should be accountable for their use and results in thecontext of country assistance strategies. If the existing trustfund portfolio were mapped to this proposed pillar, the pillarwould account for nearly two-thirds of total IBRD/IDA trustfund disbursements.Global and Regional Partnership Programs: For trust-fundsupported multiple- country programs in which donors wantto be actively involved in governance and implementation, aformally structured partnership can foster stakeholder voice,transparency in governance and operations, andaccountability for results. When partners select this option,the Bank should continue to participate and require thateach partnership program have a charter, a governing body,a management unit, and terms of reference to guide theBank’s participation. If the existing trust fund portfolio wereManagement does think that country specific (and thematic)trust funds should be managed using the same processesas for the Bank budget and IDA/IBRD lending, in line withthe Trust Fund Management Framework and as stated inOP/BP 14.40. While much has been achieved in the pasttwo years, further work is needed to better integrate trustfunds with Bank policies as they are modernized. Work isunder way, notably in the context of investment lendingreform, and management will report on progress inintegrating RETFs under investment lending operationalpolicy in the coming months.Management does not believe that a separate charter or agoverning body should be required for all GRPPs. Whilemanagement does think that clear governancearrangements are needed, appropriate to the nature, scope,complexity and risks of the partnership program. In somecases, this objective can be achieved through provisionswithin trust fund agreements. Management also thinks thatBank staff associated with GRPPs should operate underclear terms of reference and is working on guidance. (Seethe Management Response to IEG’s assessment of thexix
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 18 and 19: SUMMARYdonor funds in line with rec
Page 20 and 21: Management ResponseIntroductionMana
Page 22 and 23: MANAGEMENT RESPONSEplay at the leve
Page 26 and 27: MANAGEMENT ACTION RECORDMajor Monit
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Page 31 and 32: 1. The Role of Trust Funds in theGl
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Page 42 and 43: CHAPTER 2THE WORLD BANK’S TRUST F
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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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