"All economic and development activities infrastructure, human and social sector development, economic management, private sector and agricultural recovery, etc. can potentially be selected or designed to contribute to peace-building goals." World Bank LICUS, Good Practice Note on Country Assistance Strategies in Fragile States, 2006
As a financier and as provider of often quite forceful policy and technical advice, the World Bank:
- has very substantial direct and inadvertent impacts on local and national economic systems and governance. (These can be negative or positive);
- influences the direction and characteristics of other aid and investment flows;
- leverages interest and activities on the part of governments who are accessing, or seeking to access, external sources of funds.
Moreover, despite recent ructions involving the Bank president, some argue that the Bank’s role and influence will increase further in the coming years. This is because influential voices in the donor development community are currently arguing the need to 'multilateralise' development assistance and Finance Ministers may push for this in order to reduce the high transaction costs of aid incurred by bilateral donors.
International Alert is currently deepening its analysis of the Bank’s engagement in fragile and conflict-affected countries. We are continuing to explore the structures and procedures in Washington DC and between HQ and country offices which affect decision-making. We are also looking at ground level impacts and partnerships in the context of new initiatives such as the Statebuilding and Peacebuilding Fund and the Governance and Anti-corruption Implementation Plan. The country cases for Alert are primarily Burundi, Nepal and Sri Lanka, where the Bank and other donors face very different governance and conflict challenges.
Our primary interest is in the institutional incentives and performance criteria for Bank staff and how they design and implement Bank programmes in-country (and across sub-regions). We aim to assist the process of adapting these to the acute development challenges in 40-50 countries worldwide dubbed ‘fragile’. The ultimate goal is to help improve the Bank’s ability to reduce state and societal fragility and prevent violent conflict.