For the ‘outcomes reflex’ to become a World Bank norm, incentives are key

Under President Ajay Banga, the World Bank Group launched a corporate scorecard and a year later created an outcomes department — a commitment to ensure that its roughly $90 billion in annual disbursements translate into meaningful impact. Yet even well-intentioned bureaucracies often drift into “isomorphic mimicry,” in the words of Lant Pritchett et al: Adopting the language of reform without the underlying behavioral and institutional shifts. As one of the most influential players in international development, how the World Bank fares will reverberate widely. Two years since the scorecard launched, are these reforms translating into substantive changes? The corporate scorecard has brought much more focus by defining 15 “outcome areas” — directly translated from the bank’s strategy — measured with 22 outcome-level indicators, which are reported on regularly, robustly, and transparently. Knowledge reforms are underway that aim to build stronger data capabilities and feedback loops. And effort is underway to align incentives so that outcomes shape day-to-day decisions. The durability of the reform will hinge on whether impact incentives drive how the institution runs. Multilateral development banks are designed to safeguard accountability and manage risk, yet face mounting pressure to deliver more, faster, while navigating heightened shareholder scrutiny. In this context, disbursement has often become the most visible marker of progress. The World Bank’s own evaluations have documented “pressure for lending volume” and a perception that individual success depends more on securing and disbursing loans than on quality. The outcomes department seeks to change this, but as the Center for Global Development’s Nancy Lee and Samuel Matthews have noted, MDB scorecards in general have done more to define outcomes than to shift incentives. Without linking metrics to how staff are evaluated, promoted, and rewarded, the scorecard risks becoming another reporting tool rather than a genuine driver of change. Incentives: Two levers to pull There are two levers the World Bank can pull to translate its results agenda into sustained institutional change. Neither will be easy, but these or similar ideas are what is required to achieve sustained transformational reform. The first lever is internal: aligning staff incentives with outcomes. Building and sustaining what senior leaders at the bank call an “outcomes reflex” requires ensuring staff are rewarded for achieving measurable results alongside delivering lending. Formal incentives — such as how performance is assessed, how promotions are determined, and how budgets are allocated — are embedded in systems and therefore hard to reform. Yet, adjustments that realign departmental, team, and individual incentives to outcomes can make a change for the better. There are complexities and nuances in tackling formal incentives that must be considered to ensure a culturally appropriate approach, but these should not hold back the rigorous impact of accountability. Nonfinancial incentives also have an important reinforcing role in shaping behavior. These include public recognition, career visibility, access to learning opportunities, and the freedom to experiment and take smart risks that can quickly influence team culture toward impact. These signals help establish an environment where results matter and where candor about what is and is not working is valued. In terms of new routines, defaulting project teams into simple results-tracking templates consistent with the scorecard, making outcome data more visible through dashboards, or highlighting teams that adjust course based on evidence can help normalize results-oriented habits. The second powerful lever lies in how the Bank deploys its trust funds — nonreimbursable grants provided by donors. In fiscal year 2025, the bank’s trust funds disbursed nearly $18 billion. These funds often operate in parallel to the bank’s core lending, with greater flexibility in design and governance. That flexibility presents a real opportunity. By linking a larger share of trust fund disbursements to outcome indicators, the bank could use them as a “carrot” to reinforce results-focused behavior, both internally and with clients. This approach — underpinned by externally verified achievement of outcomes — could drive real performance change among staff, governments, and donors alike. There are promising examples. The Global Partnership for Results-Based Approaches, or GPRBA, has paired grant financing with loan operations, disbursing only when measurable results are achieved. In Kenya, for instance, a World Bank loan to expand electricity access in Nairobi’s informal settlements was complemented by a GPRBA grant that rewarded the utility for each household that received and paid for a new connection. Converting trust funds to this modality would need to be designed carefully and would not always be appropriate, especially when trust funds focus on particularly volatile outcomes and environments. But expanding this approach and designing an internal allocation mechanism to direct grant finance to teams and regions that drive greater outcomes would arguably be a powerful incentive realignment the bank can engineer. Donors would need to be part of this journey — potentially attracted by this as a path that can deliver greater value for money. A durable path forward The World Bank’s recent actions mark progress toward becoming a more outcome-oriented institution. Aligning incentives will be critical to ensure that outcomes are not just measured but actively managed and rewarded. Sustaining reform will also depend on transparency and credible reporting with detailed public dashboards. In this way, the bank can strengthen its own effectiveness and help set a new standard for the multilateral development system: One where institutions truly learn, adapt, and reward impact over volume.