I. Fragile States and the International Aid Architecture
Provides an overview of the development challenges faced by fragile states such as extreme poverty, low levels of human and social development, weak institutional capacity and governance, slow growth, etc. The chapter also examines the rationale for engagement, issues in development effectiveness, and trends in the international assistance to these countries.
II. World Bank Strategy and Organizational support for Fragile States
Trends in the broader international aid architecture for fragile states have placed new demands upon the World Bank. This section reviews the evolution of IDA’s strategy for fragile states, describes initial results achieved through IDA-supported programs, and examines progress and future challenges in the World Bank’s institutional response, including capacity building in basic public finance and service delivery functions and the implementation of the Bank’s rapid response policy.
III. Fragile States and IDA’s Financing Arrangements
Examines IDA’s financial support for fragile states (Performance-Based Allocation or PBA system), including exceptional allocations for post-conflict and re-engaging countries, and makes proposals for selective enhancement of this support. Under the proposed modifications, an additional 4 percent of overall IDA resources are expected to be redirected to post-conflict and re-engaging countries from the PBA pool (including reactivation of Cote d’Ivoire, Liberia and possibly Sudan).
IV. The Role of Trust Funds in Fragile States
Outlines how IDA supports fragile states through World Bank and donor-financed trust funds, as well as through the World Bank’s budget. Because of their flexibility, trust funds are an important complement to the support that donors deliver to fragile states through IDA, sometimes playing a critical role in laying the basis for IDA’s re-engagement in countries which have payments arrears. Beyond the Low Income Countries under Stress trust fund (LICUS TF) and the Post-Conflict Fund (PCF), examples of multi-donor trust funds presented in this section include the Afghanistan Reconstruction Trust Fund (ARTF), the Sudan Multi-Donor Trust Funds and the Great Lakes Multi-Country Demobilization and Reintegration Program (MDRP).
V. Conclusions and Issues for discussion
IDA still faces many implementation challenges in answering the challenges of intervening in fragile states, in terms of management, approach and financial support to fragile states.
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