Multi-Donor Trust Funds (MDTFs) combine the contributions of multiple donors, generally for a program of activities over many years. Their arrangements include standard legal agreements with all donors, which specify governance procedures covering trust fund management, operational and financial reporting, and the allocation and uses of funds. Bank-administered MDTFs do not allow donors to earmark funds to specific activities or recipients.

MDTFs are used frequently in post-crisis environments—both post-conflict and post-disaster. Countries in these situations generally are not providing basic services to a needy population, and require reconstruction of social and economic infrastructure. Because governance and administrative systems may be weak, they may need capacity development. In these countries, risk, uncertainty, and information costs are high, so delivering on needs tends to be costly.

MDTFs can improve resource efficiency and effectiveness by reducing transaction costs, and by managing the high-risk levels inherent in post-crisis environments. For national authorities, MDTFs can increase and untie funding and provide political visibility. International support can bring legitimacy to the overall peace process. For donors, MDTFs reduce information, administrative, and various access costs by working in a coordinated manner.

Being involved in MDTFs can allow the Bank re-entry into countries that have not been eligible for Bank support, including helping address arrears and helping countries become eligible for IDA support. Moreover, the Bank can promote economic growth and strengthening the institutions and processes of governance in these countries by administering MDTFs.

Resources on Post-Crisis MDTFs

MDTF Review. In 2006, the World Bank and Norway’s Ministry of Foreign Affairs and its Agency for Development Cooperation, in cooperation with the Canadian International Development Agency, the Netherlands Ministry of Foreign Affairs, and the UK’s Department for International Development, commissioned a review of post-crisis Multi-Donor Trust Funds (MDTFs).

Find the Full Report here, as well as the Country Case Studies. Key findings from the Review are summarized in this presentation.

MDTF Speed and Results. As a follow up to the MDTF Review, the Bank established a task team to conduct further analysis on the speed with which MDTF projects were launched. OPCFC lead the task team, with membership from the Delivery Management unit in OPCS, the Trust Funds Operations unit, and the Development Research Group. Read the summary of that analysis of speed and results, or review the the dataset.

Post-Conflict MDTFs: Practitioners’ Advice from Field Teams. Based on consultations with Africa Region country teams and experienced MDTF managers, the MDTF Tip Sheet covers the following:

• Early upstream discussions about MDTF purpose, scope, and structure

 

• Process of designing and launching the MDTF

 

• Staffing the local office and Technical Secretariat

 

• Identifying, preparing, and appraising projects

 

• Supporting governments in developing their capacity to play their designated roles

 

• Supervising projects intensively to monitor progress and adjust accordingly