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The overlapping mandates of existing IFIs and the emergence of new development finance institutions raises the question of whether the current development finance system is effectively working together to target scarce global aid resources towards areas of greatest impact. Nations face shared problems–such as climate change, recovery from the COVID-19 crisis and the threat of future pandemics, and unregulated cross-border movements of people–that can only be addressed through international cooperation. Economic prosperity has led to an increasing number of middle-income countries, bringing with it a need to examine the role of development finance institutions in relatively wealthier economies. Rising debt levels in vulnerable countries is also a growing concern in the development community, leading to a greater need for coordination on norms and standards among development lenders.
With aid representing a declining share of development finance, CGD is asking what institutional changes are needed within the multilateral development banks and other international financial institutions to reflect new realities and rise to the challenge of a resilient and sustainable recovery that resets the world on a path to achieving the SDGs? How should bilateral donors be most effective in the more complex development finance system? And how can those changes be made most effectively?
Contact: Jeremy Gaines
Center for Global Development
+1 (202) 416-4058
WASHINGTON – While China still receives loans and other aid from multilateral institutions like the World Bank and UN agencies, it has also emerged as one of the most powerful donors, in some ways eclipsing the US, according to a sweeping new study from the Center for Global Development.
US leadership in multilateral institutions such as the World Bank and regional development banks is flagging. These institutions, rated as some of the most effective development actors globally, provide clear advantages to the United States in terms of geostrategic interests, cost-effectiveness, and results on the ground. Restoring US leadership in institutions like the World Bank will mean giving a greater priority to MDB funding, which today accounts for less than 10 percent of the total US foreign assistance budget and less than 0.1 percent of the total federal budget. Prioritizing multilateral assistance in an era of flat or declining foreign assistance budgets will necessarily mean some reallocation from other pots of foreign assistance money, as well as an effort to address the structural impediments to considering reallocations.
For the first time in its seven-decade-long history, World Bank staff staged a work stoppage earlier this month. Staff are unhappy about the “Change Process,” aka the ongoing internal reorganization that President Kim initiated on his arrival at the bank now more than two years ago.
Last week the World Bank announced the process for choosing the next president of the organization. Minutes after midnight on the first day nominations were to be accepted, the US formally nominated the incumbent Jim Kim. Other nominations are possible in what is, allegedly, an “open, merit-based, and transparent” process, but which will only be “open” for three weeks. Here are five women who could ably lead the World Bank.
The World Bank’s new Program for Results (PforR) instrument is only the third financing instrument approved since 1944. The PforR portfolio is expanding rapidly and represents an appreciable part of “results-based” development finance. This paper analyzes the first 35 operations.
Last week the World Bank's Chief Economist, Paul Romer, told the Wall Street Journal the Bank had manipulated its own competitiveness rankings to undermine Chile's socialist government, and hinted Chile might not be alone—then he retracted the claim. Romer's conspiracy theories probably aren't credible, but neither are the Doing Business numbers.