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The global economic crisis that began in 2008 threatened to erase years of progress in developing countries. In response, the World Bank Group (World Bank, International Finance Corporation, Multilateral Investment Guarantee Agency) increased lending to unprecedented levels. But Increases in financing volume must be matched by quality to achieve sustained economic results. Quality-at-entry indicators have generally been positive. But certain areas—the financial sector specifically and results on the ground more generally—are a cause for concern, particularly given continued tight budgets.
This IEG study is a real- time assessment of ongoing activities. As such, it evaluates the immediate results and serves as an input to the WBG's continuing efforts to address the effects of the crisis. The evaluation of the development impact of WBG’s response will be taken up at a later stage.
Also See: Lessons from World Bank Group Responses to Past Financial Crises /WBG Management comment on IEG evaluation brief
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Management Response |
Chairperson's Summary: Committee on Development Effectiveness
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Click on a tab to browse early lessons specific to each Bank Group institution.
World Bank Group
| A strategic approach to the Bank Group's crisis-response effort is needed, one in which the following elements are integrated: |
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Early warning, preparedness and timeliness, including an eye on long-term capital adequacy, are key attributes for the WB, IFC and MIGA |
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It is costly to let the Bank's expertise in key areas (in this case the financial sector) decline. |
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The benefits of the Bank's country focus go in step with the need for a cross-country strategy to ensure consistency with initiatives and effective use of resources. |
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There is a need to balance the value of innovations and new initiatives in the middle of a crisis with continuity of support using more established and proven approaches. |
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As it responds to crisis, the WBG needs to keep the requisites of sustainable long-term growth— fiscal and debt sustainability, structural reform, environmental and climate change agendas, among others—in focus. |
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Coordination is needed among the WB, IFC and MIGA (and with other partners) to capitalize on linkages across government and business and catalyze economic activity. |
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MIGA
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For MIGA, the crisis has amplified the need for product flexibility and business development |
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The crisis created an immediate need for countercyclical spending in developing countries, which the Bank Group and others have supported. To help sustain the recovery, contribute to longer-term growth, and improve the response capacity of the Bank Group, attention needs to be given to two areas: policy change and organizational effectiveness. Policy issues concern fiscal sustainability, public-private synergies, financial sector reform, poverty and unemployment alleviation, and greener growth. In terms of organizational effectiveness, preparedness, managing quality trade-offs, coordination, and a strong results focus will be crucial. |
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