World Development Report 2026

Two-thirds of emerging market and developing economies—and 90 percent of low-income countries—depend on commodity exports, leaving their public finances exposed to the boom-bust swings in global commodity prices. When commodity prices surge, spending typically rises in step; when they collapse, public services and investments are often cut, amplifying economic volatility and deepening the slump. Drawing on the most comprehensive analysis to date of a large sample of commodity-exporting developing economies, this book reveals just how deeply these price swings shape government finances, and why some nations weather the cycle better than others. The book offers a practical roadmap for building fiscal resilience—through stronger fiscal frameworks and institutions, prudent saving during good times, and longer-term fiscal planning—while confronting the added uncertainty of the global energy transition. The rich menu of policy options outlined can help make public finances more resilient to shocks, reduce economic instability, and support more durable growth for commodity-dependent economies.

The World Development Report 2026 assesses what artificial intelligence (AI), as a general-purpose technology, means for 5.6 billion people living in low- and middle-income countries and how it could address development challenges that have resisted solutions for decades. Advancing the AI frontier that relies on semiconductors, data centers, AI-ready training data, and top-level research talent is out of reach for most developing countries in the near term. But adopting AI that is available in the market is not enough because AI’s effectiveness depends on the local context. Adapting AI to solve defined problems in developing countries can do in a decade what might have otherwise taken a century – diagnosing disease, growing small businesses, advising farmers, and delivering public services. To seize AI’s potential, governments will need to keep strengthening the analog and digital complements that power AI solutions: electricity, internet connectivity, and foundational skills, but also access to compute infrastructure and local language data. Countries will also need to establish frameworks to procure, monitor and evaluate AI applications so that pilots that work well can be deployed on a larger scale. To manage the risks, countries can leverage voluntary standards to facilitate trustworthy AI and turn to existing regulations when markets fail to protect people against the harms of AI. This report urges policy makers in developing countries to be blinded by neither the hype nor the hysteria surrounding AI in the global headlines. It reminds them instead that adopting and adapting AI—with care but without delay—and eventually advancing AI could enable developing countries to solve problems that have resisted solutions for decades.

Food security is a major concern for the Middle East, North Africa, Afghanistan and Pakistan (MENAAP). Across the region, food insecurity and malnutrition are rising at a pace not seen in recent decades, affecting high-income, middle-income, and conflict-affected countries alike. While one in six MENAAP residents lacks secure access to food, the region simultaneously records some of the highest rates of overweight and obesity in the world. Mounting pressures from conflict, water scarcity, climate shocks, and economic volatility make the need for food system transformation both urgent and unavoidable. Yet transformation also presents a crucial opportunity. MENAAP's agrifood systems are already a major engine of employment, and they hold untapped potential for creating better, more inclusive jobs , particularly in rural areas and for women and youth. This report argues that confronting the region's food security crisis and its chronic jobs challenge goes hand-in-hand. Drawing on regional data, original quantitative modeling, new survey evidence, and country case studies, the report examines the full complexity of the challenge: the evolution of food demand, the constraints on domestic production under climate change and severe water scarcity, trade management, the devastating impact of conflict on food systems, and the role of the private sector in driving sustainable change as well as the potential for job creation. The central message is one of possibility. Substantial gains in food security and job quality are within reach, but they require greater ambition in both investment and policymaking. The report offers governments a concrete policy roadmap showing how coordinated, cross-sectoral reforms can simultaneously strengthen food and nutrition security and unlock the potential for more and better jobs across the agrifood system.

How can Latin America and the Caribbean protect their hard-won progress against poverty in the face of mounting climate hazards and a changing climate? This book provides a powerful, evidence-based answer. Drawing on new data, original research, and previous studies from across the region, Adapting to Adversity examines how climate hazards threaten the livelihoods of the poor and near-poor--and what can be done to strengthen their resilience. It reveals the stark reality that more than a third of the region's people, including nearly half of all poor households, live in areas highly exposed to droughts, floods, hurricanes, heatwaves, and landslides. For millions living one shock away from falling back into poverty, climate risk is not a future concern but a daily struggle. This book explores who is most at risk, how climate hazards intersect with poverty and inequality, and what policies are proving most effective. It highlights successful innovations such as early warning systems, catastrophe insurance facilities, and adaptive social protection programs, while exposing the persistent gaps that leave many communities dangerously unprotected. Beyond diagnosis, Adapting to Adversity offers a roadmap for action. It calls for layered, coordinated systems that combine prevention, financial protection, and social safety nets to make development gains durable. With adaptation needs projected to reach $55 billion annually by 2030, the book argues that financing, institutional reform, and political will are critical to turning resilience into reality. Essential reading for policymakers, development practitioners, and scholars, this book makes a compelling case: in Latin America and the Caribbean, adaptation is not a luxury--it is development itself.

The world faces a jobs challenge of historic proportions that will shape global prosperity and stability for decades to come. Between 2025 and 2035, around 1.2 billion young people in emerging market and developing economies are set to reach working age, the largest youth cohort the world will likely ever see. Jobs are essential to reducing poverty, promoting shared prosperity, building self-sufficient economies, and strengthening social stability. In the recent past, many countries have struggled to generate enough jobs during periods of large inflows of young people into the working-age population. Today, the task is even more difficult. Many of the most-affected economies are entering this period with low per-capita incomes, high debt, and limited room for policy action. The effects of recent crises add to these pressures. At the same time, global growth has slowed, traditional export-led growth strategies look harder to execute, and structural and technological shifts such as the rise of AI and the energy transition create new uncertainties. There are also strong reasons for hope. This starts with young people themselves: this record cohort is better educated than previous generations and has enormous potential. There are success cases from regions that have seen large influxes of young people in the past. If sufficient job opportunities can be created, today’s young people could drive economic and development progress for decades to come. This study offers a wide-ranging assessment of the global jobs challenge. It explores demographic and labor market trends, explains why the challenge has become more complex, and discusses policies to address it. The study highlights three policy pillars: foundational infrastructure (physical, human, and digital capital), a business-friendly environment, and mobilization of private capital. Complementary policies focus on five sectors identified by the World Bank Group with high potential for resilient, large-scale job creation: infrastructure (including energy), agribusiness and farming, health, tourism, and value-added manufacturing. Success will depend on comprehensive national strategies adapted to country circumstances, with the international community also playing its part. With determined action, this demographic wave can become a powerful engine of growth, poverty reduction, and shared prosperity.

Countries in the Middle East, North Africa, Afghanistan, and Pakistan (MENAAP) region are among the most water-scarce in the world and increasingly vulnerable to heat extremes, droughts, floods, and sea-level rise. Rising temperatures are already reducing labor productivity, straining health systems, intensifying desertification, and contributing to water scarcity, crop losses, and higher energy demand for cooling, while deepening fragility, poverty, and displacement risks. These circumstances create an urgent need to respond. This report focuses on two concrete and immediate examples of how heat- and trade-related policies in destination markets affect firms and the broader economy of the MENAAP region. The report first quantifies the effect of more frequent periods of extreme heat on firm performance in MENAAP and underlines a generally negative impact, especially for smaller firms and those outside global value chains. Second, new and forthcoming climate mitigation policies in Europe—a key trading partner—will raise costs for firms exporting to that destination market, particularly through the EU Carbon Border Adjustment Mechanism and the Corporate Sustainability Due Diligence Directive. While the broad macroeconomic impact will likely be minimal, some sectors and countries may be more affected. Firms in MENAAP will need to adapt to this changing physical and regulatory environment. Economic opportunities will indeed arise, linked to heat adaptation as well as to the new trade measures in Europe that will offer positive prospects for some countries in the region. Beyond these, the development of the renewable energy market as well as the important role of resource efficiency for the region will offer further opportunities.

The global economy is facing a major shock as the Middle East conflict drives sharp energy price increases. Global growth is projected to slow to 2.5 percent in 2026, with emerging market and developing economies (EMDEs) facing the weakest per capita income growth since the pandemic. The effects across EMDE regions differ based on direct impact of the conflict, energy exposure, and policy buffers. Risks to the outlook remain skewed to the downside and include escalating hostilities, further commodity market disruptions, and additional geopolitical strains, while broader adoption of artificial intelligence (AI) offers some upside. Policy action is critical: globally to safeguard energy and food security and advance the energy transition, and domestically to control inflation, strengthen fiscal sustainability, and support job creation through investment in physical, human, and digital capital. Compounding pressures from the energy shock, rising debt is driving up sovereign borrowing costs for EMDEs, particularly for those most indebted, underscoring the need for stronger revenue mobilization and improved debt management. Commodity-exporting EMDEs can improve their fiscal resilience by using credible fiscal rules, maintaining well-governed sovereign wealth funds, and diversifying revenue sources to better manage commodity price cycles.

Africa’s Great Lakes Region (GLR) faces some of the world’s most complex and protracted forced displacement situations, driven by recurrent conflict and political instability. Refugees, internally displaced persons, returnees, and host communities coexist amid repeated cycles of displacement and return, placing sustained pressure on national systems and local service delivery. As displacement becomes increasingly protracted and humanitarian financing declines, there is growing urgency to identify development-oriented responses that can deliver predictable, scalable, and sustainable support. Social Protection Systems for Forcibly Displaced Populations and Host Communities in Africa’s Great Lakes Region examines the role of national social protection systems as a core development response to forced displacement in the GLR, focusing on Burundi, the Democratic Republic of Congo, Rwanda, and Uganda. It assesses how social protection systems currently support forcibly displaced populations and host communities, using a revised Adaptive Social Protection Framework that incorporates displacement-specific vulnerabilities. The framework extends beyond traditional system diagnostics to include policies and legal rights, institutional arrangements and partnerships, programs and delivery systems, data and information systems, and finance. Drawing on country-level analysis and a regional perspective, the book finds that although GLR countries have made important policy and legal commitments, social protection systems remain at an early stage of adapting to displacement. Coverage of forcibly displaced populations is limited, institutional responsibilities are fragmented, data systems often operate in parallel to humanitarian structures, and financing for inclusion relies heavily on external support. Refugees, in particular, face persistent barriers related to legal status, documentation, employment, freedom of movement, and access to national systems. Social Protection Systems argues that strengthening national social protection systems—while preserving humanitarian assistance for acute needs—offers a viable pathway to enhance resilience, reduce long-term dependency, and support social cohesion by linking displaced populations and host communities to skills, jobs, and economic opportunities in protracted displacement settings. It proposes sequenced, pragmatic recommendations to help governments and partners transition toward more inclusive, development-led responses, anchored in vulnerability-based approaches, strengthened data systems, and coordinated financing. The findings aim to inform policy dialogue and operational design in the GLR and other regions confronting prolonged forced displacement.

Drawing on new data and modeling approaches, Rationalizing Informality: Social Protection, Job Quality, and Growth offers a fresh view of the nature and raison d’être of the informal sector. Rather than portraying it as the disadvantaged sector of dysfunctional labor markets, the book emphasizes the continuity of worker behavior and labor force structure across the development process. While acknowledging that a minority of workers is rationed out of formal sector jobs, the evidence shows that the majority engage in the same job calculus as their advanced-country counterparts. In particular, the self-employed who form the backbone of the informal sector weigh amenities such as independence and flexibility against the costs and benefits of formality when selecting sectors. The volume introduces the first measures of these nonwage dimensions of job quality and finds that workers value them greatly, while valuing formal sector benefits far less than their cost to firms and workers. Bringing these insights together, Rationalizing Informality offers a unified model that incorporates both the forces pushing workers into informality and those pulling them toward it, and it quantifies the impact of policies meant to alter those forces. Ultimately, the book argues that attaining social progress, better jobs, and growth requires looking beyond informality and embracing a comprehensive set of reforms to strengthen both worker’s and entrepreneur’s skills, raise the dynamism of the formal sector, and better align social protection systems with worker and firm needs.

Kazakhstan stands at a pivotal moment to modernize its housing finance system and unlock family investment in housing as part of its broader ambition to double the economy by 2029 and reach high-income economy status. Housing affordability remains a binding constraint despite sizable public support, reflecting structural inefficiencies in mortgage finance, subsidy design, and funding models. Homes and Hopes: Mobilizing Private Capital for Affordable Housing and Family Investment in Kazakhstan provides a comprehensive analysis of the Kazakhstani residential mortgage market, including trends, growth determinants, drivers, government policies, market competition, private capital participation, and households’ access to mortgage loans. This report informs the ongoing policy debate on the future direction of mortgage market development by proposing options from the perspective of housing affordability, fiscal efficiency, and private capital mobilization. It offers actionable reforms to stakeholders—policy makers, financial sector authorities, financial institutions, investors, communities, and analysts—to enable informed decision-making and strategic planning. These reforms could significantly improve housing affordability while reducing long-term fiscal exposure. By reorienting subsidies toward de-risking and equity support rather than interest rate suppression, Kazakhstan can unlock private capital, strengthen financial stability, and enable more families to invest safely and sustainably in housing.