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The Role of IDA in the International Aid Architecture

Supporting the Country-Based Development Model

This paper discusses the role of IDA in the international aid architecture. It analyses IDA support for the country-based development model at the national, regional, and global levels. It builds on an earlier report describing the world’s changing aid architecture.

Supporting the Country-Based Development Model
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Chapter Titles

I. Introduction
Official Development Assistance (ODA) flows are a primary source of financing for low- income countries (LICs), and IDA continues to be their main source of multilateral ODA, with cumulative gross disbursements in the order of US$80 billion between 1994 and 2005. IDA’s role in the international aid architecture is both to provide financing and knowledge services to client countries in support of their priorities and needs; and to support a platform for the delivery of aid that helps to enhance aid effectiveness.

In light of the growing complexity of the global aid architecture, IDA’s role in supporting LICs has become even more important.

II. The country-based development model in a changing aid landscape
Discusses how the development model used by the Bank in LICs can continue to support growth and poverty reduction in the context of a changing aid landscape. There is broad agreement that the country-based development model is the most effective approach for achieving results in terms of sustained economic growth and poverty reduction in developing countries. However, some recent trends in ODA flows and in the evolution of the international aid architecture are potentially at odds with the country-based development model. The recent emphasis on social sectors - to the detriment of infrastructure, as a destination for ODA flows may reflect global rather than recipients’ needs and priorities. Furthermore, the proliferation of donor channels, the fragmentation of ODA, and the mounting degree of “verticalization” and earmarking of aid could reduce the overall effectiveness of aid. These trends and their significance are discussed in this section.

III. IDA’s role at the country level
Client surveys indicate that IDA’s core strengths reside in its financial resources, knowledge base and the quality of its policy advice; but also, in its global reach combined with local presence, its ability to operate on a multi-sectoral basis thus supporting an integrated approach to development, and its convening power to help coordinate development assistance efforts. These core strengths enable IDA not only to provide direct support to client countries but to also provide a platform, or “glue”, for development assistance, characterized by a high degree of flexibility and adaptability to country circumstances; preparedness to act as a “first mover” to tackle critical development challenges; and ability to leverage other funding and scale-up poverty reduction interventions by other partners. In this role, IDA brings greater strategic coherence in development assistance programs and plays a central role in enhancing alignment and harmonization as well as in achieving sustained results at the country level.

In Focus: Climate Change

Clean Energy Initiatives

IV. IDA’s role in addressing regional and global priorities
IDA’s comparative advantage in regional programs, beyond its financial and knowledge support, is a combination of regional expertise, strong national level policy engagements and longstanding role as a convener of governments and donors. IDA also presents the advantage of being capable to deliver complex regional projects and analytical work; to leverage support and resources within and outside the World Bank Group for regional projects; to link regional integration and country strategies. The Bank Group has also long supported global priorities and still plays multiple roles in global programs due, among others, to its ability to link global issues with country and regional strategies; ability to invest in global public goods at the country level; capacity to play a leading role in tackling emerging global priorities. At the same time, through its involvement in global policy making, coupled with its intensive activities in the field, IDA supports the alignment of national, regional and global priorities.

V. Challenges going forward and conclusion
Focuses on the main challenges going forward and how IDA is gearing up to address them. The rising complexity of the aid landscape combined to new global challenges, make IDA’s support to the country-based framework even more vital. However, to fulfill this role successfully, IDA will have to adapt and intensify its efforts in four main areas:

(i) strengthening complementarity with vertical approaches to aid delivery;
(ii) ensuring appropriate sectoral funding;
(iii) addressing critical global challenges with an increased priority given to climate change;
(iv) and enhancing alignment and harmonization.

IDA is also in the process of reforming and modernizing its operational policies, designed to improve its operational effectiveness and thus its ability to meet the challenges outlined above.

Annexes  provide additional information on external perceptions of IDA’s effectiveness and performance.

Learn More

This paper makes numerous references to IDA’s work across continents and sectors. Browse through IDA at Work ,” a retrospective look at what IDA has achieved in select areas over the last 10 years.

What is IDA? The International Development Association (IDA) is the part of the World Bank that provides interest-free credits to the world's poorest countries. Learn more

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