An Evaluation of the World Bank's Trust Fund Portfolio

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CHAPTER 3THE RELEVANCE AND EFFECTIVENESS OF TRUST FUND SUPPORT FOR DEVELOPMENT3.47 Significant shortcomings in the effective deployment of trustfund resources stem from inconsistencies with core Paris DeclarationPrinciples of country ownership and alignment and donorcoordination (as well as a general weakness in managing for results asnoted above). This evaluation finds that the occurrence of thoseinconsistencies is heavily influenced by core trust fund structuralfeatures—notably whether they are single- or multicountry in scopeand single- or multidonor in their financing and governancearrangements.Single-countrytrust fundsdemonstratecountryownership morecommonly thanmulticountrytrust funds.COUNTRY OWNERSHIP3.48 Trust funds, like other sources of aid, work best when they aredesigned to ensure country ownership of aid-supported programsand modalities. For this to take place, resources need to be alignedwith country priorities and processes and deployed in ways thatreinforce or enhance country capacity to plan and implementdevelopment policies and programs. This evaluation finds that, forthe most part, Bank-managed single-country trust funds adhere tothis aid practice. In contrast, global funds that focus on specific issuesin multiple countries are not as good at fostering country ownership.3.49 There is not necessarily a match between the issue selected bythe donor and a particular country’s needs. When the donor hasearmarked the funds for particular countries, the use of the trust fundreflects the donors’ policy priorities and not necessarily recipientengagement. Also, when there is a fund that can be tapped byproposals, the funding availability is uncertain and cannot be factoredinto country budgeting and planning, as was found to be the casewith some trust-funded programs reviewed as part of the countrystudies and trust fund program assessments (and discussed further inchapter 4).3.50 The contribution to country capacity development is alsomixed, much as it is with all sources of aid. Some trust funds supportcapacity building as a core objective, for example, through support fortechnical assistance and global networks or forums. As noted above,the flexibility of support is appreciated by recipients, but otherwiseappears no more or less effective than capacity building funded inother ways. In contrast, where it is not a core objective, trust fundsupport for capacity building has tended to be weak. Notably,independent evaluations of specific global funds (such as EFA/FTIand the Global Fund) have reported that the assistance provided hasfocused more on the development of funding proposals than onbuilding the capacity needed for implementation. Moreover, trustfundedprograms that operate through their own implementationarrangements rather than through country systems tend to producelimited capacity-building gains. Also, in the specific case of the Global42
CHAPTER 3THE RELEVANCE AND EFFECTIVENESS OF TRUST FUND SUPPORT FOR DEVELOPMENTFund, some country studies have reported that the fund has drawnaway existing capacity available in the health sector more than it hascontributed to building new capacity with transversal expertise (asnoted above in box 3.4).DONOR COORDINATION AND HARMONIZATION3.51 Virtually all government officials, donors, and Bank staffinterviewed as part of this evaluation’s country studies see the trustfund mechanism, especially multidonor trust funds, as having thepotential to foster policy coherence among donors and bring togetherwhat would otherwise be piecemeal aid contributions. This poolingeases the burdens on governments of dealing with multiple donors byconsolidating interactions and reporting requirements, which iswelcomed by recipient governments and is particularly valuable forcapacity-constrained recipients in post-conflict and post-disastersituations. Notably, trust funds organized around formal or informal(MDTF) partnerships help to get donors on the same page based on atransparent set of objectives and procedures. But country andprogram reviews suggest that the actual gains to enhanced aidcoordination are, on the whole, less than generally claimed. There arefour main reasons for this finding:Actual gains toenhanced aidcoordinationand donorharmonizationare less thangenerallyclaimed.Limited incremental impact on aid coordination. Whilecountry-specific trust funds typically demand in-country aidcoordination, they tend to rely on existing processes (alongwith aid from other sources), so it is difficult to isolate howmuch the trust fund mechanism itself contributes to improvedcoordination. The coordination among trust fund donors willtypically be strong, but between this group and other donorsoutside trust fund arrangements, the coordination will be asstrong or as weak as the overall aid environment in thecountry permits. 10 Indeed, in Rwanda, where the country-ledaid coordination process is strong, the government is seekingto move away from the use of separately organized trustfunds, to larger “baskets” or pooled financings that workthrough country systems. Moreover, some trust funds workthrough their own coordination mechanisms, and this causesduplications and inefficiencies. 11Lack of a clear complementarity or division of labor betweenthe large vertical funds and the horizontal assistance of theWorld Bank (and other MDBs) for longer-term sectorwidedevelopments. This well-documented challenge has led thehealth-related funds to create a joint funding platform with theWorld Bank for coordinating support for health systemstrengthening. But the more that a vertical fund moves in thedirection of providing horizontal assistance, the more it movesaway from the original rationale of the fund, and the more43
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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
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
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
Page 113 and 114: CHAPTER 6FINDINGS AND RECOMMENDATIO
Page 115 and 116: the evaluation, namely operational
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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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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