An Evaluation of the World Bank's Trust Fund Portfolio

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CHAPTER 3THE RELEVANCE AND EFFECTIVENESS OF TRUST FUND SUPPORT FOR DEVELOPMENTThe Appropriateness of the Trust Fund Vehicle3.4 Trust funds enable donors to direct and pool aid to specific countriesand issues using the machinery of a multilateral institution to ensure thatthe resources are used as intended. How appropriate are they as adevelopment financing vehicle? This evaluation addresses that questionby examining three aspects of trust funds: (1) the extent to which theyprovide additional aid resources; (2) the development relevance of theobjectives they support; and (3) the distinctive contributions of trust fundsupport.There is no clearevidence thattrust funds addaid resourcesglobally.THE ADDITIONALITY OF TRUST FUND RESOURCES3.5 There is no clear evidence that trust funds add to aid resourcesglobally. International reporting on aid flows, such as that provided byOECD/DAC, provides no data showing aggregate additionality.Moreover, with the one exception of the United States, donorsinterviewed stated that the resources they allocate to trust funds aredrawn from their overall budget envelopes for aid, and adjustmentswithin that budget will seldom affect the overall bottom line. 2 Fornongovernmental donors, trust funds are also a vehicle for challengingtheir available level of resources. Donors interviewed stated that inmaking allocation decisions they must weigh a trade-off between theshare of aid channeled through trust funds and that directed throughbilateral and multilateral programs.3.6 These trade-offs are not apparent, however, in aggregate terms, sinceover the past decade trust funds have grown along with the growth inboth total bilateral and core multilateral aid flows. Moreover, sinceFY03–05, IDA contributions have grown at almost the same rate ascontributions to Bank-administered trust funds (as shown in figure 2.1 inchapter 2), indicating virtually no trade-off with IDA contributions,which major donors say take priority.3.7 While trust funds have directed aid to selected countries orprograms, there is no way to determine if these funds represent a netgain or a redirection on a global scale. For example, the Global Fund isnot 100 percent additional at the country level, and if donors did notallocate resources to the Global Fund, would they make equivalentresources available through other channels? It is not possible to constructa credible counterfactual to answer this question in the aggregate. Sometrust funds have succeeded in mobilizing funds from new sources—suchas new sovereign donors, private foundations and corporations, andinnovative financial products—but in the case of World Bankadministeredtrust funds these account for only a small share of totaltrust fund contributions, as indicated in chapter 2. The increase in donorcontributions does, however, mean that more aid is being channeledthrough multilateral mechanisms.26
CHAPTER 3THE RELEVANCE AND EFFECTIVENESS OF TRUST FUND SUPPORT FOR DEVELOPMENTTHE RELEVANCE OF TRUST FUND OBJECTIVES3.8 On the whole, this evaluation found evidence on trust fundrelevance to be largely positive. The majority of trust funds reviewedwere found to support programs and activities of material developmentimportance, consistent with country and global development prioritiesand the Bank’s mandate and strategies. But the trust funds themselvesare not well integrated into the consultation and design with clients ofthe Bank’s country assistance strategy, one of the Bank’s mainmechanisms for promoting alignment with country priorities andcoordination with overall aid at the country level.3.9 Country priorities. The majority of the trust funds reviewed are wellaligned with country priorities. 3 This was found to be true in virtually allof the single-country trust funds reviewed as part of the eight countrystudies, as might be expected. Multicountry trust funds also werealigned when the recipient country was engaged in the design of theactivity to be funded. For example, the trust fund supporting theEducation for All/Fast Track Initiative (EFA/FTI) disburses grants onthe basis of countries’ education sector strategies. But multicountryfunds were not generally well aligned when the recipient country wassimply selected, or earmarked, by the donor(s). In the 29 sampleprograms that provided support to multiple countries, half earmarked atleast a portion of their funds for specific countries (or regions). Forinstance, the Policy Facility for Decentralization is focused exclusively onSouth Asia; half of the Norwegian Trust Fund for Infrastructure andPrivate Sector Development is devoted to countries in Africa; andindividual country recipients were identified in the Bank’s agreementwith the donor for the Energy Small and Medium Enterprise Support toSub-Saharan Africa trust fund.The majority oftrust fundssupportactivities ofmaterialdevelopmentimportance andare well alignedwith countryand globalpriorities.3.10 Global priorities. Trust funds that support the provision of globalor regional public goods are, for the most part, well aligned with priorityneeds at the global and regional levels. This is the finding of theexamination of seven random sample programs of a global or regionalscope, of which only one global program was not well aligned. It is alsothe finding of IEG’s recent review of the Global and RegionalPartnership Programs (GRPPs) in which the Bank is involved. However,as noted in that report, programs of regional scope tend to have greaterrecipient-country demand than programs of global scope. Moreover,while both global and regional programs show a trend toward greaterrecipient-country participation in the design and governance of theseprograms, this trend has not typically translated into real voice forrecipients. 43.11 Bank mandate and strategies. All of the reviewed trust funds arebroadly consistent with the Bank’s broad mandate to reduce poverty andpromote sustainable development. Many focus on issues related to the27
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The World Bank GroupWORKING FOR A W
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©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 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 58 and 59: CHAPTER 3THE RELEVANCE AND EFFECTIV
Page 80 and 81: CHAPTER 4MANAGEMENT AND ACCOUNTABIL
Page 96 and 97: CHAPTER 5THE IMPACT OF TRUST FUNDS
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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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