The World Banks Independent Evaluation Group (IEG) has
issued high marks for the Banks early response to the
global financial crisis, rebutting claims that the Bank took a
Vinod Thomas, IEG Director-General, noted the significant
positive impact of Bank financing, particularly for middle
While OECD countries have posted post-crisis growth of
approximately 4%, middle income countries are closer to 8%, and
developing countries as a whole approach 6%, Thomas pointed
He attributed the middle income countries strong
performance to their having been great beneficiaries of IFI
assistance and while all IFIs sharply increased their
financing in response to the crisis, the World Bank disbursed a
record $80 billion between fiscal years 2009 and 2010. This was
more than any other IFI in that time period.
The increased lending by a dramatic amount by the
World Bank in this context of recession reflects a role it has
now played in helping to stabilize world economic growth,
Thomas told Emerging Markets.
One leading independent development think tank agreed that
the World Bank had performed well during the crisis, but said
there was room for improvement in its work with low income
countries. Ben Leo, Research Fellow at the Center for Economic
Development in Washington, said there was a broad
consensus that the Bank had responded well to the
I agree that the Bank responded very vigorously in the
middle-income countries, Leo told Emerging Markets.
Its institutional and capital structure allowed it to be
much more agile.
The record disbursement by the World Bank was due in part to
the happenstance of low pre-crisis demand for funding from its
middle-income country financing arm, the International Bank for
Reconstruction and Development (IBRD). This left the
institution with significant leeway to increase its
middle-income lending by nearly three times, according to
The International Development Association (IDA), the
Banks funding arm for low-income countries, also made a
positive response. Leo noted that the Bank moved swiftly to get
resources to low income countries at the outset of the crisis
but the fact that IDAs resources were limited to a
fixed pot of money that it receives every three years meant it
was constrained in what it could do.
The IEGs analysis also addressed concerns that low
income countries may have lost out to increased lending to
middle income countries. In a way there is no clear
substitution, Thomas noted. The former does not
take away from the latter. Without the former, the latter would
While acknowledging the increases over the past two years,
Thomas noted that there is no doubt that additional
funding [to low income countries] will be critical.
The positive effect of the crisis-responsive funding bodes
well for the World Banks future role, Thomas said.
This kind of support from the multilaterals, the World
Bank plus the others, is a major force in supporting and
shoring up the stabilization of growth. This is a different
role, a new role. Its something to be reckoned
with, he said.