World Bank's Private Sector Aid Fails to Benefit Poor, Internal Audit Says

The Ashta hydropower plant is one of the projects supported by the International Finance Corp. in Albania. An audit by the World Bank's Independent Evaluation Group indicates that benefits of IFC's investments do not trickle down to the poor. Photo by: Angelo Dell'Atti / IFC

While the World Bank’s private sector investments help to generate growth, their benefits do not trickle down to the poor, an internal audit reveals.

The audit by the Independent Evaluation Group urges the International Finance Corp., the bank’s private sector arm, to rethink how its investments can help the poor.

“The link between growth and poverty reduction is not automatic or universal,” Ade Freeman, the report’s lead author, told Bloomberg in a phone interview.

IFC should “make explicit the assumption through which growth leads to poverty reduction,” and “do a better job of tracking the poverty outcomes and impacts from its interventions.”

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About the author

  • Ma. Rizza Leonzon

    As a former staff writer, Rizza focused mainly on business coverage, including key donors such as the Asian Development Bank and AusAID.