For financing purposes, the International Development Association (IDA) groups fragile states in four categories:

• Countries receiving allocations based on IDA’s Performance Based Allocations (PBA) system
  

   

• Countries receiving exceptional post-conflict allocations
  
  

   

• Countries receiving exceptional allocations upon re-engaging with IDA after a prolonged period of inactivity, but which did not qualify for post-conflict assistance
  

   

• Countries that do not receive any IDA financing because they are in arrears on IDA repayments
  

   

IDA provides financing primarily through the PBA system, which emphasizes performance, while factoring in country needs. Generally, if a country receives a good rating (i.e., good governance, managing inflation and debt, among others), then the Bank will try to allocate more money to it. This is problematic for fragile and conflict-affected countries, particularly post-conflict countries. In these situations, the Bank takes into account the special circumstances of the country. The following shows how through IDA, the Bank has assisted fragile states.

• From 2002 to 2005 (IDA13) IDA provided grants to the poorest countries, debt-distressed poorest countries, post-conflict countries, and for HIV/AIDS and natural disasters. Many of these provisions benefited fragile states.
  

   

• Starting in July 2005 (IDA14), IDA provided grants based on a country’s risk of debt distress. IDA established policy-determined debt burden thresholds because generally countries with better policies and institutions can carry more debt. Because fragile states have weak policies and institutions, they also have lower debt-carrying capacity and therefore mainly receive grants.
  

   

• In July 2008 (IDA15) the World Bank Management committed to a range of actions related to work in fragile and conflict-affected countries: progress on human resources reforms; cooperation with the UN and other development actors; implementation of good practice principles for engaging in and adapting Country Assistance Strategies to fragile and conflict environments; and strengthening IDA support for state- and peace-building activities.
  

   

• Because of the Multilateral Debt Relief Initiative (MDRI), IDA, the AfDF and IMF all canceled their debt for countries reaching Heavily Indebted Poor Countries (HIPC) completion point. Cancelling the debt freed resources in these countries to meet their developmental needs. See more under Debt Relief.