An Evaluation of the World Bank's Trust Fund Portfolio

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CHAPTER 5THE IMPACT OF TRUST FUNDS ON THE BANKBox 5.1 Has the World Bank Reduced Its Lending for Primary Education in FTI Countries?The Catalytic Fund of the Fast Track Initiative has committed $1.85 billion to education in36 low-income countries—more than the $890 million they received from IDA for primaryeducation. Have these FTI resources added to, or substituted for, IDA? The data suggestthat EFA/FTI resources have been additive since IDA support to these countries hasremained (in nominal terms) at levels similar to those in place before the FTI begandisbursing in 2004.New Annual Education Commitments by IDA and the FTI Catalytic Fund in 36 Countries Supported bythe Catalytic Fund, F03-10 (US$ millions)70060050040030020010001201483272 65104Sources: World Bank data for IDA commitments; FTI Secretariat for FTI commitments, discussed in a forthcoming IEGreview of the World Bank’s support to education.1611998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201035258118145915361133428119056307168FTIIDAFIFS AS A BANK BUSINESS LINE5.10 With 16 currently active trust-funded FIFs accounting for halfof all trust fund contributions and disbursements (as reported inchapter 2), these funds now constitute a significant line of business forthe Bank. This new line of business gives the Bank voice andresponsibility in some of the largest and most complex globalpartnerships addressing such issues as control of communicablediseases, climate change mitigation and adaptation, environmentpreservation, and agricultural production. Appendix E provides abrief description of the objective and size of each of the 16 trustfundedFIFs.Thirteen of the16 FIFs wereapprovedby the Board.5.11 Each FIF was established in an ad hoc way, often as the resultof high-level political initiative, and customized to donorrequirements. 6 Trust fund policy does not require the Bank’s Board toapprove the establishment of each FIF, even though FIFs may involvethe Bank in new or unusual roles. Thirteen of the 16 FIFs were in factapproved by the Board, while three—for GAVI, Guyana and Haiti—were not submitted to the Board. 768
5.12 The Bank’s role as trustee involves receiving, holding, anddisbursing funds. This role takes various forms, some of which arecomplex and innovative. For example, the Bank handles the sale ofcertified emissions reductions, which help to fund a program thatsupports adaptations to climate change. It also holds donorcontributions to the Global Fund and transfers those funds directly tomultiple third-party recipients on instructions from the Global Fund’sgoverning body. In all FIFs, however, the Bank establishes a legalagreement with the donors that strictly limits the Bank’sresponsibility for development outcomes. Moreover, activitiesfinanced by FIFs are not subject to Bank operational policies, such asthe Bank’s policy on safeguards (unless so specified in the FIFadministration agreement or when Bank serves as the implementingagency for an activity).CHAPTER 5THE IMPACT OF TRUST FUNDS ON THE BANK5.13 Fourteen of the 16 current FIFs are funding partnershipprograms in which the Bank is involved, in addition to serving astrustee of the FIF. The Bank has a wide variety of roles in thegovernance and implementation of these 14 partnership programs, asshown in table 5.1. These roles give the Bank varying degrees ofstanding to influence the programs, as is also the case for partnershipprograms funded by other Bank-administered trust funds. But in FIFfundedpartnership programs Bank operational policies do notnecessarily apply nor does the Bank necessarily have a programmanagement or supervisory role as is the case in the other trustfundedpartnership programs located in and overseen by the Bank.5.14 In view of the limitations on the Bank's responsibilities for theuse of FIF resources, these large undertakings entail opportunitiesand risks for development effectiveness and for the Bank. Is theBank’s limited role as trustee consistent with its trust fund policy,which states that the funds it administers promote development andaid effectiveness? The policy (Operational Policy 14.40) sets outcommon criteria for Bank acceptance of both FIFs and IBRD/IDAtrust funds, but FIFs would seem to warrant separate treatmentbecause they:Are largeAre generally exempt from Bank operational policies andremediesHave potential implications for the Bank’s own programs andstrategies even though they operate outside the Bank’s control.As the FIFportfoliocontinues togrow it willchallenge theBank’s legallylimitedresponsibilityfor suchactivities andtest theconsistency ofsuch funds withthe Bank’soverall policy ofaccepting onlythose funds thatpromotedevelopmentand aideffectiveness.69
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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
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Chairperson’s Summary:Informal Me
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1. The Role of Trust Funds in theGl
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CHAPTER 1THE ROLE OF TRUST FUNDS IN
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CHAPTER 2THE WORLD BANK’S TRUST F
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Page 48 and 49: 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
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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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Page 139 and 140: APPENDIX E: FINANCIAL INTERMEDIARY
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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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