SUMMARY
The World Bank is a vital component in the international
development system. The Bank is a major provider of development
funding, analysis and advice. Its lead is often followed by other
donors and agencies. Given its profile, the Bank comes under considerable
scrutiny from civil society, opinion formers and commentators.
Not all of their views are constructive: some organisations seem
to have an instinctively hostile attitude to the Bank which is
not always founded on evidence. In our view, such unsubstantiated
criticism simply damages the public perception of development
assistance more broadly.
The Bank is not perfect, however, and the context
in which it operates continues to change. As a major shareholder
and contributor to the World Bank, the UK has a distinct leadership
role. The UK should not only articulate a vision for reform of
the World Bank, it must pursue this with vigour.
The Department for International Development's overall
objective is the eradication of poverty and attainment of the
Millennium Development Goals. All the channels it uses for its
funding must support this objective. The Bank's core mandate is
related to poverty reduction. This makes it a natural partner
for DFID, and the consistent and steep increases in DFID's funding
to the Bank reflect this. This places an increased responsibility
on DFID to ensure that the Bank is not only organisationally effective
but that it is achieving a level of development impact that justifies
these sums. We therefore strongly believe that more consistent
and transparent use of impact assessments by the World Bank across
all of its lending is the single most important change in Bank
practice that DFID should be pursuing.
Adequate representation of developing countries in
World Bank decision-making is not only a question of fairness,
it is one of effectiveness: greater ownership by developing countries
will lead to more effective Bank programmes. The UK has been better
at setting out this argument than at developing a solution to
the problem. Securing any reform of the World Bank's voting arrangements
will be difficult. But practical and immediate changes which can
help to rebalance the Bank's Board to give developing countries
a greater voice, especially in Africa, are achievable and should
be prioritised.
There are no short-cuts in development. While the
Bank has improved its record on attaching policy reform conditions
to its lending, further improvements could be made to ensure developing
country ownership of their own development. World Bank diktat
is no substitute for thorough debate and engagement of stakeholders
and especially national parliaments by the borrower country government.
Only the latter will achieve a resilient development programme
with broad domestic support.
Selection of the President of the World Bank, one
of the most influential figures in international development,
should be transparent and on merit, rather than in the gift of
the United States. Progress on this will require giving up Europe's
monopoly on the post of Managing Director of the IMF. The UK should
initiate work now towards achieving such a 'grand bargain'.
The Millennium Development Goals will never be achieved
if women's empowerment is not central to development efforts.
The Bank's action plan on gender, launched last year, was overdue.
It now offers scope to hold the Bank to account across the range
of its activities. Similarly, the Bank's enhanced focus on: country-level
effectiveness; redeployment of staff into the field; and fragile
states, is to be welcomed. Development will not succeed through
lending alone. We support the Bank's efforts to ensure that it
provides intellectual added value to its lending. The Bank's analysis
can have significant influence. DFID must, therefore, ensure that
the Bank's knowledge is credible and neutral in the way it is
both created and shared.
DFID should reassess its staffing arrangements and
analytical capacity in relation to the Bank's work to ensure that
it can carry out satisfactory oversight of the Bank. It should
take up all adviser slots available to it in Washington. When
we were in Washington we questioned the UK's decision not to appoint
a full-time Executive Director to the World Bank and were not
convinced by the UK officials' robust defence of the practice
of appointing a single civil servant as the UK's senior permanent
representative to both the World Bank and the IMF. We were therefore
pleased at the Government's change of heart and we are glad that
the new UK Executive Director of the World Bank will be a DFID
appointment.
On current trends, UK funding for Bank-managed Trust
Funds will soon match UK core funding for the Bank. There are
already more than 900 such Funds. Any further proliferation of
Funds could distract World Bank shareholders from the task of
reforming its main institutions. DFID should accept the creation
of further Funds only as a last resort.
Parliaments have a central role in overseeing government
expenditure of national budgets, including money channelled through
the Bank. It follows that the Bank should make itself available
to provide formal evidence directly to parliaments in donor and
developing countries to complement that provided by governments.
Climate change is a particularly acute challenge
for developing countries. Funding for climate change work must
be both increased and streamlined. The World Bank has a role to
play in achieving both these objectives. As a development leader,
the Bank should use its substantial resources and leverage to
support viable renewable energy sources. But the urgency of climate
change does not lessen the blight of poverty and we believe that
the Bank's primary focus must remain on poverty reduction and
development.
| 
