IDA’s Evolving Role

Aid Effectiveness

Poverty Challenge

Progress toward the Goal

An Agenda for Action

World Bank Strategy

The Role of IBRD

Meeting the Poverty Challenge: The Role of IDA
…and on IDA as an agent for progress in the poorest countries

IDA helps the world’s poorest countries reduce poverty by providing "credits," which are loans at zero interest with a 10-year grace period and maturities of 35 to 40 years. These countries face complex challenges in striving for progress toward the international development goals. They must, for example, respond to the competitive pressures as well as opportunities of globalization; arrest the spread of HIV/AIDS; and prevent conflict or deal with its aftermath. To help these countries improve their prospects, the policy framework emphasizes:

• Accelerating broad-based growth through sound macroeconomic and sectoral policies, especially for rural and private sector development.
• Investing in people through strong support for the social sectors (see figure), including gender mainstreaming and efforts to counter the challenge and social impact of communicable diseases, especially HIV/AIDS.
• Building capacity for improving governance–including in public expenditure management–and combating corruption.
• Protecting the environment for sustainable development.
• Fostering recovery in post-conflict countries.
• Promoting trade and regional integration.

IDA’s Evolving Role: Greater Emphasis on Participation and Partnerships

Responding to recent changes in the international development environment, IDA works more closely with borrowers and other development partners. The Poverty Reduction Strategy Papers, prepared in a participatory manner by IDA countries, offer an opportunity to align donor strategies more closely with country strategies.

The Bank took important steps in the spring of 2001 to increase transparency and broaden participation in the formulation of IDA’s operational approaches. Documents for the donor meetings on the 13th Replenishment of IDA (IDA-13)–which will fund lending in fiscal 2003—05–are publicly available at www.worldbank.org/ida. And in June 2001, for the first time in IDA’s 41-year history, representatives of borrowing countries joined donors in discussions about IDA’s future directions.

Increasing Aid Effectiveness through Performance-Based Allocations

Research shows that aid is most effective in spurring growth and poverty reduction in countries that have a strong commitment to reforms. IDA leads all development institutions in directing its assistance to countries that pursue poverty-reducing policies. IDA employs a performance-based allocation system to channel its resources to countries that are undertaking reforms. Through targeted allocations, effective leveraging of resources, and country-based strategies, IDA is helping the poorest countries participate in the global economy, and promoting equity and inclusive growth for their poorest citizens.