Will the Window for Host Communities and Refugees Survive “SimplifIDA”?

At next week’s meetings in Nepal to discuss the next replenishment of IDA, the World Bank’s concessional lending arm, stakeholders will discuss whether to merge the Window for Host Communities and Refugees (WHR) with the Regional Window to create a new “Regional and Global Solutions Window.” This move is part of the “SimplifIDA initiative, which aims to reduce the complexity of IDA. This blog, based on our ongoing research on the WHR, outlines four recommendations for stakeholders as they consider this merger.

What is the WHR?

The WHR provides a combination of grants and highly concessional loans to IDA-eligible countries (low- and lower-middle income) that meet three criteria: (1) a minimum number of refugees; (2) adequate refugee protection practices; and (3) the submission of a refugee policy strategy. The WHR began as the Refugee Sub-Window (RSW) under IDA18 (FY2017-20) with an allocation of US$2 billion, and its budget has steadily increased since. Under IDA20 (FY2023-25), it has an allocation of US$2.4 billion.

The WHR is motivated by the medium- and long-term development needs of refugees. UNHCR, the UN refugee agency, estimates that 66 percent of refugees are in protracted situations (displacement lasting at least five years), and yet the majority of relevant assistance goes to short-term, humanitarian needs. Further, refugees are often prevented or substantially restricted from working by laws and government practices.

The WHR provides refugee-hosting countries with concessional financing in exchange for development programs, inclusion into national systems, and the adoption of policies that facilitate self-reliance. Indeed, the World Bank has committed that at least 60 percent of countries eligible for WHR funds will implement “significant policy reforms” by the end of the current IDA20 cycle.

What impact is the WHR  having?

As part of our ongoing research, we have interviewed or surveyed more than 70 actors related to the WHR, including staff at the World Bank and UNHCR, donors, humanitarian workers, and refugee-led organizations. The goal is broad: to understand whether the WHR is achieving its aims and to identify ways it can be improved. Here we preview our topline findings as they relate to the potential merger.

We find that the WHR is a critical instrument in the response to forced displacement. With the increasingly protracted nature of displacement, the World Bank is the only actor focusing almost exclusively on medium- and long-term development programming to benefit the displaced, rather than short-term humanitarian relief. In particular, their model of financing through hosting governments has incentivized many countries which would not otherwise have included refugees in programming or considered policy changes to do so.

This has led to notable policy successes. For example, our interviewees stated that WHR financing was instrumental in the creation of Kenya’s “Shirika Plan”, moving the government away from a decades-old policy of keeping refugees confined to camps. In Ethiopia, similarly, WHR projects enabled thousands of refugees to access work permits. And in Mauritania, WHR financing ensured the inclusion of refugees in a large urbanization project which led to wider, important changes within the government.

However, we also found that opportunities for greater impact were missed due to insufficient prioritization of refugee issues within the World Bank. While the amounts of financing provided by the WHR are large in the displacement context, they are small within IDA and the World Bank overall. With relatively small amounts of money and minimal engagement from leadership, key staff are stretched too thin or uninterested in engaging in the complexity of refugee situations.

Designing and implementing effective WHR projects requires an in-depth understanding of the specific barriers that refugees face; a nuanced view of where WHR financing can incentivize policy change; and a strong relationship with the humanitarian sector. We heard repeatedly (from both outside and within the World Bank) that some staff deprioritized these difficult and time-consuming tasks. As a result, one of our strongest recommendations is to increase the number of staff dedicated to implementing the WHR.

Should it be merged?

We don’t yet know enough to be “for” or “against” the proposed merger. For example, a merged window could ensure that World Bank staff have access to greater and more flexible resources to address refugee inclusion, thereby increasing internal interest in development approaches to displacement.

However, a consistent theme from our research is that development programs and policies for refugees are often a low priority—among host governments especially but also among some key staff within the World Bank. The current standalone structure of the WHR—a dedicated allocation of funds combined with explicit policy commitments for refugees—is designed well, addresses some of these gaps, and is leading to significant impact. We believe it could have more impact if cracks in implementation, such as the lack of dedicated staff, were addressed.

We are concerned that a merged window would dismantle this structure, with its explicit focus on refugees, and further dilute both attention and resources in practice. Therefore, as stakeholders head to Nepal next week to consider the future of the WHR, we have four recommendations:

  1. Ensure the levels of dedicated finance to refugees and host communities are not cut. We are concerned that a broader focus would lead to a larger share of resources being dedicated to more popular global challenges (e.g. energy access) at the expense of refugee inclusion, as we see within the Evolution Roadmap discussions. At least US$2.4 billion should be “ring-fenced” specifically for refugees and host communities within IDA21, the upcoming replenishment.

  2. Ensure the terms for this dedicated financing remain at least as concessionary. Right now, the WHR provides more generous terms than other parts of IDA, and we heard repeatedly that grant financing is often the key to bringing host governments to the table. Within a merged window, the specific incentive for hosting governments to engage on refugee inclusion could be lost and, again, overtaken by other issues.

  3. Keep an explicit commitment on policy change. The WHR provides a clear connection between financing and policy commitments. This connection enables accountability and oversight by donor governments and external actors, and it has led to notable policy successes. These policy successes—combined with changes in practice—have the potential to make the longest-lasting impacts. A merged window raises concerns that policy commitments will be deprioritized or cut altogether.

  4. Increase the attention on refugee issues within the World Bank. Some key staff do not devote adequate attention to achieving the WHR’s goals. In IDA21, this should be addressed in two ways: increase the number of staff dedicated to implementing the WHR and require key staff (such as relevant country leadership) to meaningfully engage. Merging the WHR with other objectives risks further weakening the role the World Bank can ideally serve.

If the World Bank can simplify its window structure while achieving the same or better outcomes for refugees and host communities, it should. However, our research to date has indicated that the WHR is currently filling a critical gap in medium- and long-term engagement in refugee contexts, with a high return on its investment for some of the world’s most vulnerable, and the potential to expand that impact with minimal additional investment. Any merger that weakens the effectiveness, unique role, or dedicated funding of the WHR is a mistake.

Our paper with much more detail will be available later this summer. To learn more, please get in touch!


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.

Image credit for social media/web: UN Women/Allison Joyce