The World Bank’s budget support to governments during the COVID-19 pandemic comes with demands that may get in the way of the speed and flexibility of financial assistance, according to new research urging the bank to remove its normal policy reform conditions during the health crisis.
The analysis by Clemence Landers and Rakan Aboneaaj at the Center for Global Development looked at development policy financing, or DPF — the bank’s way of providing unearmarked funds that are subject to conditionalities. Between April 2020 and March of this year, the World Bank dispensed $21.6 billion in budget support through International Development Association and International Bank for Reconstruction and Development programs, according to the CGD researchers.
On average, the bank has demanded recipient governments implement eight “prior actions” as conditions before it would disburse money. Most focused on issues such as climate and standard fiscal policy reforms, while some were related to health and COVID-19.