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| World Bank Business Models |
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LICUS are a highly diverse group and it is useful for policy purposes to categorize them into smaller groupings as the Bank has recently done using business models. In 2005, the Bank introduced a fourfold typology of business models in the 2005 Fragile States report, viz., deterioration; prolonged political crisis or impasse; post-conflict or political transition; and gradual improvement.
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| Four LICUS Business Models |
Deterioration
- Interim strategy note, focusing on stemming decline in governance and social services, and contributing in economic and development areas to multi-donor conflict prevention efforts. Limited new financing; focus on portfolio restructuring.
- Increased use of CDD, private sector, NGO and ring-fenced mechanisms (including service delivery and local economic development in areas of insecurity).
- State capacity and accountability: focus on transparency, dialogue and maintaining institutional capital to facilitate eventual turnaround.
- Contributing to community level conflict prevention, and to multi-donor efforts for peace-building or governance reform at a national level.
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Prolonged crisis or impasse
- Interim strategy note, focusing on maintaining operational readiness for re-engagement and providing economic inputs to early peace or reconciliation dialogue.
- Small grant-based finance, aiming at local economic development and protection of human capital, generally through non-government recipients (including service delivery and local economic development in areas of insecurity).
- Capacity and accountability: focus on institutional analysis, dialogue and counterpart training.
- Use of socio-economic issues for restoration of dialogue/identification of entry points for change.
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Post-conflict or political transition
- Interim strategy note, focusing on rebuilding state capacity and accountability, and delivering rapid visible development results in support of peace-building.
- Exceptional IDA allocation.
- Joint needs assessment/recovery planning, linking political, security, economic, and social recovery.
- State capacity and accountability: support for a broad state-building agenda, through institution-building and, where appropriate, development policy operations with robust oversight mechanisms and sector programs (including transitional projects working through CDD or NGO mechanisms). Leadership and civil society support.
- Public administration, service delivery and economic development to address areas with crime, insecurity or conflict.
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Gradual improvement
- Country Assistance Strategy, focusing on building state capacity and accountability, achieving selective development results, and boosting support for reform currents, supported by moderate IDA allocation.
- Activities to boost domestic reform currents, including leadership support, communications initiatives, training and capacity-building.
- State capacity and accountability: development policy operations (where appropriate and restricted in volume), supported by sector and capacity-building projects and with strong oversight mechanisms. Asymmetric reforms.
- Public administration, service delivery and economic development to address areas with crime, insecurity or conflict.
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Source : World Bank. 2005. Fragile States: Good Practices in Country Assistance Strategies. IDA/R2005-0252. Report No. 34790. Washington, DC.
World Bank. 2003. Low-Income Countries under Stress – Implementation Overview. Sec M2003-0560; IDA/SecM2003-0647. OPCS. Report No. 27536. Washington, DC.pp 3 -4. |
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These business models are based on the extent of consensus between donors and government on development strategy, and the pace and direction of change. The first two types of LICUS (those experiencing deterioration and those facing prolonged political crisis or impasse) represent countries where there is little consensus between donors and government on development strategy. The other two (those that are post-conflict or in political transition and those experiencing gradual improvement) represent countries with such consensus. The pace and direction of change are then used to classify LICUS within each of these two groups of LICUS for a total of four business models. These business models are likely to permit a more tailored response to different groups of LICUS but have yet to be fully developed.
Further refinement of the business models by more explicitly factoring in differences in capacity to perform core state functions (e.g., resource generation, resource allocation, basic social service and infrastructure provision, and political accommodation of dissent and security) is needed to enable the Bank to reflect better the institutional situations of different groups of LICUS in its response, and thereby to meet its state-building objective better.
The experience emerging from the implementation of the Bank's differentiated business models needs to be systematically monitored and will comprise the ultimate test of the operational relevance of the business models. Implementation data should be used to ascertain how much value the business models add over the CAS-driven country-by-country approach. |
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The
Independent Evaluation Group (IEG) is an independent unit within the World
Bank; it reports directly to the Bank's Board of Executive
Directors. The goals of IEG 's evaluations are to draw lessons
from Bank experience, and to provide an objective basis for
assessing the results of the Bank's work.
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