The Multilateral Development Banks

Andrew Rogerson

Overseas Development Institute

Scope

Facts about MDB operationsRoles, especially of World Bank/IDAPolicy trends and issuesChoices/ future directions

A varied landscape

Differentiated by:• 25-plus institutions• Size and leverage• Region, sub-region• Hard, soft terms• Private, public focus• Policy, projects• Knowledge base

United by:• Capital market links• Shareholder power• “Credit Culture”• Long Term Contracts• Managerial Autonomy• Untied Suppliers• World Bank/IMF lead

World Bank and Regional Banks

• Net “ hard” window lending now …zero

• WB flows negative, compensated by RDBs

• Soft windows have $6-7b +ve net flow

• Rising explicit grants (IDA)

• Falling grant element (IMF test)

• Rationing rules and performance allocations

Net official financing of developing countries 1990-2003

Some IDA specifics

• $23b mobilised 2003-2005

• 40% internally funded

• 21% direct grants, including AIDS, conflict

• Holds 25% of HIPC debt

• PRSP mandatory

• Allocations from $10 to $3 per capita

• 44% Africa (UN 37, EU 35)

Role of IDA/WB

• Largest multilateral in Africa, Asia• Largest single donor in most countries (IDA)• Present in most sectors and budget support• Coordinator of aid (CGs)• With IMF, administers debt relief…• Assists or assesses (?) PRSP process• Fund holder for aid community• Enthusiastic “harmoniser”

Some Policy Issues

• Regionals too much in WB image

• End-Game for grant expansion?

• Proliferation of “global” programs

• PRSP: based on needs or resources?

• Reforming governance, voting shares.

Choices/Future Directions

• Relation with UN and UNDP unstable

• Decentralisation and regional banks

• Global Public Goods: who anchors?

• Conditionality-rhetoric or substance?

• Pivotal Role of US and next President

• A proven chameleon..

• But “imperial overstretch”..

IBRD: regional composition of commitments from FY2000 to FY2004

Source: World Bank Annual Report 2004

IDA: outstanding development credits and associated charge income

Source: World Bank Annual Report 2004

Africa: IBRD and IDA lending by sector (Fiscal, 2004)

Source: World Bank Annual Report 2004