Background Material on Conditionality

Key Findings of the 2005 Conditionality Review

• The operational policy introduced in 2004 is consistent with a view that conditionality is neither coercion to undertake reform, nor prescriptive of policy content.
  
• The Bank has fully recognized the importance of country ownership for development effectiveness, however, it is grappling with the practical challenges of assessing ownership and responding to changing policy environments.
  
• The Bank has made important strides in adapting its policy-based lending to complex reform programs and focusing on critical actions, but should try to using large and complex policy matrices – especially in multi-sectoral operations.
  
• The Bank's conditions and expected prior actions (triggers) have typically been transparently disclosed and clearly defined. However, the flexibility of programmatic approaches needs to be exercised cautiously to balance predictability with performance.
  
• The Bank's approach is fully compatible with  the goal of harmonizing financial support with other development partners while retaining the Bank’s distinct accountability.

Good Practice Principles Emerging from the 2005 Conditionality Review

• Actively reinforce country ownership by relying on clear evidence of ownership informed by analytic work.
  
• Agree up-front with the government and other financial partners on a coordinated accountability framework which includes both policy actions and outcome indicators.
  
• Customize the accountability framework used to evaluate country performance under the program and modalities of Bank support to country circumstances. Do not use the framework to leverage additional reforms outside the government’s agenda.
  
• Choose only actions critical for achieving results as conditions for disbursement.
  
• Conduct transparent progress reviews conducive to predictable and performance-based financial support. 

External Submissions to Conditionality/PRS Review

Consultations

The Bank carried out a number of face-to-face discussions with borrowers, multilateral and bilateral donor partners, civil society organizations (CSOs), and the private sector to elicit feedback and suggestions on the selectivity criteria, design criteria, and implementation objectives in the Bank's Development Policy Lending.. All comments were summarized and, together with the background papers formed the basis for the policy paper that waspresented for discussion to the World Bank's Board of Executive Directors. The Executive Board's discussion has helped to shape the paper that will be presented to the World Bank's Development Committee for consideration by the World Bank's Board of Governors at the Annual Meetings in the fall of 2005. The conclusions of the Development Committee will shape a set of good practice principles that will be issued to guide the World Bank staff in their work with conditionality in the coming years.

Consultation Events