Many fragile states suffer severe internal conflict, and most are mired in a deteriorating socioeconomic climate, with environments that are not conducive to absorbing significant quantities of development assistance. Given their exceptionally challenging environments and track records of poor performance, they often are also in danger of effectively being abandoned by the international community, to the great detriment both of their suffering populations and the wider world, which cannot afford a proliferation of failed states.
In addition, countries emerging from conflict or going through political transitions after prolonged crises often have sizeable needs for financial assistance to support reconstruction programs. The Bank has worked to improve its ability to provide early and effective support for reconstruction in countries that are showing a strong commitment to re-establishing peace. The range of Bank tools for financing in fragile states and post-conflict reconstruction include regular performance based (PBA) IDA allocations, the Post-Conflict Fund, the LICUS Implementation Trust Fund, Multi-Donor Trust Funds, and exceptional allocations through arrears clearance and reengagement grants.
Financing for low-income countries through IDA includes special windows for exceptional allocations to post-conflict countries and to countries in fragile transitions re-engaging with the international community; these windows provide grant resources for critical recovery efforts. IDA regulates these exceptional allocations by using the World Bank’s Post-Conflict Performance Indicators (PCPI) ratings framework, which is specifically designed to evaluate performance in IDA-eligible countries. The PCPI indicators are similar to the Country Policy and Institutional Assessment (CPIA) that assesses the quality of a country’s present policy and institutional framework, but the PCPI takes into account the fact that performance and results expected in post-conflict settings may be different or less ambitious than in non-conflict situations. In addition to indicators that align with the CPIA, the PCPI measures progress in areas that are critical for fragile transition processes but are not captured in the CPIA: (i) security; (ii) demobilization and reintegration of ex-combatants; (iii) political and reconciliation processes that are normally enshrined in post-conflict agreements; (iv) and reintegration of displaced populations. The PCPI review process is conducted for both post-conflict and LICUS TF states in order to track progress and to demonstrate improvements or deterioration that would otherwise not be observed through CPIA ratings. The PCPI ratings assess countries in four major areas: (i) security and reconciliation, (ii) economic recovery, (iii) social inclusion and social sector development, and (iv) public sector management and institutions.
The PCPI rating framework was refined for the 2004/05 cycle and the 2006 cycles. The main changes were: the conversion of the ratings scale from 1 to 4, to a scale of 1 to 6; the addition of an indicator to measure social cohesion and non-discrimination; the amalgamation of the health and education into a single ‘building human resources’ indicator; greater emphasis on private sector development in the economic recovery section; and treatment of all budgetary and fiscal management issues in the indicators covering fiscal and budgetary management and efficiency of revenue mobilization indicator. Country PCPI ratings are not currently disclosed publicly.
 PCF/LICUS TF Grant Database
LICUS Implementation Trust Fund (LICUS TF)
Post Conflict Fund (PCF) Multi-Donor Trust Funds (MDTFs)
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