How Can the World Bank Group Improve Its Private Sector Projects in African Fragile States?

In recent years, the World Bank Group has made increasingly strong andexplicit commitments to fragile and conflict-affected states, putting them atthe top of the development policy agenda. These commitments are promising,but give rise to significant operational challenges for the various arms ofthe World Bank Group, including the International Development Association(IDA), the International Finance Corporation (IFC), and the Multilateral InvestmentGuarantee Agency (MIGA). The bank also faces steady pressure fromshareholders to scale up involvement in fragile states while also improvingabsorptive capacity and project effectiveness.

In this brief, we assess the bank’s private sector interventions in Africanfragile states. We summarize and analyze project-level data from IDA, IFC,and MIGA, and introduce a new framework which may assist in the designand implementation of projects in fragile states. We argue that to improveits private sector interventions, the World Bank must align its projects withthree principal criteria:

  1. The constraints that businesses cite as the most binding limitations togrowth.
  2. The host governments’ priorities for business climate improvements orstrategic economic sectors.
  3. The sectors in which World Bank Group projects have been most effectiveover time.

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