An Evaluation of the World Bank's Trust Fund Portfolio

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CHAPTER 3THE RELEVANCE AND EFFECTIVENESS OF TRUST FUND SUPPORT FOR DEVELOPMENTfinancing for the provision of global public goods, and less evidentwhen trust funds merely finance country-specific efforts.3.60 But trust funds do not consistently operate in an effective way.They do not necessarily integrate well with countries’ own programsor foster coordination on the ground with other sources of aid. Bothrecipient and donor features of trust funds matter to how effectivelyresources have been deployed. Notably, global trust funds thatoperate in multiple countries tend to involve insufficient recipientparticipation in the design of their objectives and modalities, andoften lack clear outcome objectives. Furthermore, single-donor trustfunds work less well than multidonor funds in delivering aidefficiency and coordination gains, except in the case of single donortrust funds focused on a single country. In these cases, there are nosignificant differences in the performance of trust funds with a singleor multiple donors. So, while the distinctive value of trust funds ismost evident in the case of funds focused on the provision of globalpublic goods, global funds that operate in multiple countries show thegreatest need for improvement in how they are designed andmanaged.3.61 This chapter’s examination of the strengths and weaknesses oftrust fund objectives and design is followed in chapter 4 by anexamination of the Bank’s management and accountability of trustfunds, and the identification of areas of strengths and weaknesses inexisting business processes. The findings of these two chapterstogether contribute to a recommendation—to be laid out in chapter6—that the Bank establish a three-pillar system for trust funds, otherthan FIFs, comprising: single-country trust funds, trust-funded formalpartnership programs (with their own program charters andgoverning bodies), and the creation of a small number of “facilities”to replace the numerous multiple-recipient-country trust fundswholly managed by the Bank.48
4. Management and Accountabilityof Trust FundsThe Trust Fund Accountability Framework4.1 Accountability means that an organization is allocated resourcesto accomplish specified results, and is expected to report on how theresources have been used and what has been accomplished. In theBank Group, staff are accountable to management, and managementis accountable to the shareholders (represented by the Board). TheBank has many instruments and processes for exercisingaccountability in IDA and IBRD operations and work funded by theBank budget. These include the budget and Work ProgramAgreements, country assistance strategies, project completion reports,IDA replenishment papers, and IEG reports. All such processes linkresources provided with results achieved.4.2 To this traditional framework, Bank-managed trust funds add aset of parallel accountabilities. Because the Bank is serving as thedonors’ agent, it is accountable to them for the management of theirfunds and for results of trust-funded activities. A number ofinstruments for exercising this accountability have been developed,including:At the corporate level—oooooThe Grant Reporting and Monitoring SystemAnnual reports to donors on individual trust fundsPeriodic workshops and seminars for donorrepresentativesThe Trust Fund Quality and Compliance ReportTrust Funds Annual Report.Evaluation Highlights To the Bank’s mainstreamaccountabilities framework,Bank-managed trust funds adda set of parallelaccountabilities. The Bank’s financialmanagement is largelysuccessful from a donorperspective, but it presentsobstacles to good planning andmanagement. The allocation of some trustfund resources by selectingproposals is inefficient andundermines accountability.Allocation of funds directly toBank units to be managed likeother resources offers betteraccountability. Despite the plethora ofguidance and support for trustfund operations, mostoperational staff find trust fundbusiness processes complex,unclear, and inconsistent. Systems improvements arelikely to succeed only if theBank and donors confront theunderlying issue of parallelaccountability to donors.At the country or project level—o Allocation of trust fund management fees to operationalunitso Donor approval of individual grant proposals (forexample, the Japan Social Development Fund)o In-country committees of donors whose trust fundssupport a particular project (for example, in Ethiopia andBangladesh)o Inspection visits by officials of the European Commission. 149
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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
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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Page 125 and 126: APPENDIX C: LIST OF INDIVIDUALS CON
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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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