The Role of the World Bank in Fragile and Conflict-Affected Situations

This note, a joint product between CGD, the IRC, and Mercy Corps, was originally posted on Mercy Corps' website.

Introduction: World Bank Engagement in Crisis and Conflict Settings

The geography of poverty is changing. Extreme poverty is increasingly concentrated in places characterized by fragility and violent conflict: by 2030, 85 percent of the extreme poor—some 342 million people—will live in fragile and conflict-affected states.[1] Yet just one in five fragile states are on track to achieve the Sustainable Development Goals (SDGs).[2] Meaningful progress on the goal of reducing global extreme poverty requires meeting the development needs of vulnerable populations in fragile contexts; but assistance in these contexts has traditionally been limited to short-term humanitarian aid, ill-equipped to address underlying development challenges.  

World Bank leadership, staff, and shareholders recognize that protracted crises and associated mass displacement and chronic extreme hunger, as well as threats from sudden-onset emergencies such as climate disasters and pandemics, threaten development progress. Driving progress in these complex environments is the only way that the World Bank will meet its twin goals of reducing global poverty and improving shared prosperity, and address the underlying drivers of some of the world’s most protracted crises.   

In 2016, the World Bank began greatly amplifying its engagement in fragile states and humanitarian contexts, engaging in the World Humanitarian Summit, launching new crisis-focused mechanisms in the 18th replenishment of the International Development Association (IDA18, covering July 2017-June 2020), and establishing new trust funds to respond to crises. World Bank financing and programs could mobilize vast new intellectual and financial resources for fragile and violent contexts, and in doing so, potentially improve the lives of millions of vulnerable people.   

The World Bank’s increased engagement in these contexts is a significant, concrete example of the “nexus”[3] that is ever present in assistance rhetoric of late, highlighting both the promise and the challenges of creating coherence between humanitarian and development approaches in practice. The World Bank is uniquely positioned to leverage its convening power, credibility with governments, and longer-term financing mechanisms, among other tools, to better address sources of instability and recurrent humanitarian crises. But these contexts also pose unique challenges to the World Bank’s traditional operating model. Collapsed or fragile governments, chaotic security environments, and constantly changing local dynamics stand in stark contrast to the more stable contexts where the World Bank has traditionally worked.  

In some fragile and crisis settings, the national governments—the default partners of the World Bank—are parties to conflict or benefit from (and perpetuate) protracted fragility. Fragile and conflict-affected countries often have weak or collapsed service delivery and management capacity, as in South Sudan, Libya, and Yemen. The World Bank’s longstanding practice of engaging with governments and implementing through state systems may not be viable or appropriate in many fragile and conflict-affected settings, necessitating different partnership and implementation modalities. The World Bank must also work at a faster pace to meet rapidly evolving needs, while at the same time ensuring a “do no harm” approach amidst volatile conflict dynamics.   

The World Bank’s attempts to navigate these challenges have so far met with mixed success. In Cameroon, World Bank leveraged its presence and financing to shape the government’s policy to better protect refugees. In Lebanon, it demonstrated adaptability when it scaled up its cash transfers project to target host communities, who perceived they were being excluded by humanitarian organizations working with refugees. On the other hand, the World Bank’s approach in Yemen presented significant challenges. It launched an emergency cash transfer program that successfully helped millions of vulnerable Yemenis on the cusp of famine to buy food.[4] However, its approach was poorly coordinated with humanitarian actors serving these same populations—resulting in inadvertent tensions, duplication, and implementation challenges.  

As the World Bank develops a new Fragility, Conflict and Violence (FCV) Strategy, and approaches its 19th replenishment of IDA (IDA19, covering 2021-2024), this note explores the lessons learned since 2016 and asks what is working, what isn’t, and what else should the World Bank be considering?  

The World Bank’s recent efforts demonstrate the importance and unique value-add of its work in fragile, crisis-affected, and humanitarian environments. Its proposed four pillars of engagement in FCV settings, as outlined in IDA19 Special Theme documents[5] and in the concept note for the FCV Strategy[6]—pivoting to prevention; remaining engaged in conflict; escaping the fragility trap; and mitigating FCV externalities —are promising. The World Bank will need to better mitigate risks that come with engagement within fluid and sensitive contexts, and partner with a more diverse set of actors to ensure complementarity, principled engagement, and maximal impact. It will be important for the World Bank to more clearly define its comparative advantages in FCV settings, and in the process, to avoid duplicating capacities that already exist and are better met by impartial humanitarian actors.  

This note outlines the critical importance of World Bank investments in fragile states and crisis-related funding through IDA, offers a constructive critique and stock-taking of the Bank’s latest efforts, and provides recommendations for the Bank and its shareholders to consider moving forward. It draws on experiences and observations by the authors' organizations of the World Bank's efforts, as well as experiences of implementing programs in crises where the World Bank's tools are being deployed.[7]

[1] Overseas Development Institute, "SDG Progress: Fragility, crisis and leaving no-one behind," 2018, p. 19.

[2] Overseas Development Institute, "SDG Progress: Fragility, crisis and leaving no-one behind," 2018, p. 16.

[3] The humanitarian-development or humanitarian-development-peace nexus refers to the vision that the actors in these sectors work coherently, through planning and financing, to address people's vulnerability before, during, and after crises. 

[4] World Bank Group, "Factsheet: Yemen Emergency Crisis Response Project - Fourth Additional Financing," 14 May 2019.

[5] International Development Association, “Special Theme: Fragility, Conflict and Violence,” 2019, p. ii.  

[6] World Bank Group, "Strategy for Fragility, Conflict and Violence, 2020-2025: Concept Note," 2019. 

[7] Of particular focus are the World Bank’s Crisis Response Window (CRW), Catastrophe Deferred Drawdown Option (Cat DDO), Refugee Sub-Window (RSW), Pandemic Emergency Financing Facility (PEF), the Famine Action Mechanism (FAM) (see Annex for further details). 


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