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Progress evident, but a long way to go on reform implementation, report finds.
WASHINGTON – The Center for Global Development released its biannual Multilateral Development Bank (MDB) reform tracker today, evaluating the progress of the ambitious reform agenda across the seven largest MDBs, including the World Bank. The tracker is designed to be an objective tool for stakeholders to judge progress on specific reforms.
The report reveals a mixed picture, with promising signs of progress in some areas, while other important reforms have not yet been initiated and relatively few reforms have been fully completed. Some institutions, like the Asian Development Bank and the Inter-American Development Bank Group, have moved faster than others.
“Our findings show some notable progress since our last update, but it is far too early to declare victory in any reform category. And half-measures are not an option if these institutions are to meet urgent 21st century challenges,” said Nancy Lee, the lead author of the report and a senior policy fellow at the Center for Global Development.
The report finds:
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Progress on major reform groups remains highly variable, with shares of reforms actually implemented ranging from 5 to 64 percent.
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Reforms to stretch MDBs’ existing capital to leverage more lending capacity have fallen well short of potential gains, including from appropriate valuation of callable capital.
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All seven institutions have updated their mandates to address climate change, and some have also included other global challenges like pandemics. But shareholders have not yet initiated the analysis to determine the additional capital needed to address these new expanded mandates.
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Shareholders have been more forthcoming in setting up sizable portfolio guarantee funds that free up MDB capital for more lending.
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Four institutions are exploring issuing hybrid capital, a form of non-voting capital which can be leveraged, but only the African Development Bank has actually completed an issuance.
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Two institutions have set targets for boosting their mobilization of private capital relative to their own finance commitments. But more clarity is needed from the others to judge the scale of their ambitions for mobilizing more private finance.
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Impact reporting has improved, with five institutions reporting at the project level and four at the country level. Three institutions set impact baselines and targets, essential for judging performance.
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The set of reforms to improve how the MDBs work with country partners has seen more progress on streamlining processes than on supporting country-owned platforms.
“This is the difficult middle period for a reform agenda, after the speeches have been made and the nuts-and-bolts work of implementation has started. It’s easy for reform to lose steam going forward, but MDB leaders and shareholders have a shared responsibility to go the distance,” said Lee.
For the full set of findings and to explore the reform progress by each MDB, visit the MDB Reform Tracker: https://www.cgdev.org/media/mdb-reform-tracker.
About the Center for Global Development: The Center for Global Development works to reduce global poverty and improve lives through innovative economic research that drives better policy and practice by the world's top decision-makers.