The 2012 Development Policy Lending Retrospective reviews the World Bank’s use of its Development Policy lending (DPL) instrument over the past three years. This is the third Development Policy Lending Retrospective since the Operational Policy (OP 8.60) was introduced in August 2004. It covers 221 Development Policy Operations (DPOs) approved by the Board between 2009 and 2012.
Recent global economic crises have forced many donor countries to be more selective when providing development aid. With tight budgets and scarce resources, these countries have become increasingly concerned about “value for money” as regards the use of aid funds in recipient countries. This type of concern has generated demand for a fresh review of the evidence on the issues around results, risks, and reforms.
The Retrospective assesses (i) the extent to which DPOs have contributed to and influenced country results, and what can be done to enhance their results focus; (ii) the risks associated with DPOs and how these have been balanced against opportunities—including governance risks, fiduciary risks, and macroeconomic risks—and what can be done to enhance the risk management framework for DPOs; and (iii) the effectiveness of reforms introduced to the operational policy framework and of emerging practices, and what further reforms might be considered in the coming years.
Over the past three years, development policy lending has remained a key financing and policy dialogue instrument for both IDA and IBRD. Total development policy lending during the three year Retrospective period reached approximately $45 billion, a nominal increase of 53 percent compared to the previous Retrospective. Commitments in the form of DPOs included over $37 billion of IBRD funds and nearly $7.4 billion of IDA funds. There were also $243.5 million in DPO commitments through trust funds.
Regional Distribution of Commitments and Operations
IBRD Commitments and Operations