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Fragile and conflict-affected countries (FCCs) pose a great challenge to the development community as a whole and to the International Development Association (IDA, the concessional lending arm of the World Bank), in particular. How much financing should IDA provide to these countries? How can it strengthen incentives for development results? Such questions are on the agenda for IDA17, the upcoming round of replenishment, but they will only become more important in the future as better-performing countries graduate from needing IDA’s assistance and FCCs constitute a larger share of its clients.
To strengthen its support for FCCs, IDA needs additional flexibility to scale up successful projects. One way to do this would to supplement the country-level performance-based allocation (PBA) with a results-based allocation (RBA). Doing so would provide a strong incentive to focus on results and provide good monitoring and evaluation. It would also bridge the gap between IDA supporters who argue for increased and more flexible allocations to FCCs on the basis of need and IDA supporters concerned not to sacrifice effectiveness or to dilute the PBA system that is at the core of IDA’s principles.
This brief outlines how to implement a results-based approach in a way consistent with the bank’s recent experience with results-based disbursement, including its approval of the new Program for Results (PforR) instrument.