Main Findings: Implementation Experience and Operational Framework

The Bank Group 2020–25 FCV strategy was timely and ambitious. The strategy recognized that fragility and violence are among the most pressing long-term global challenges to development, with growing implications for poverty, stability, and the sustainability of development outcomes. The FCV strategy sought to shift how the Bank Group engages in FCS through a comprehensive framework that spans prevention, engagement during conflict, transition support, and mitigation of spillovers.

While the strategic orientation was relevant, the design lacked some key components for translating aspirations into operational outcomes. Specifically, it did not include an implementation plan that set out clear principles, intended outcomes, responsibilities, targets, or indicators that could be used to monitor progress and to identify and adapt to challenges as they arose, both from internal and external factors. Nor did it clearly articulate how changes across the Bank Group’s operational framework—spanning programming, policies, personnel management, partnerships, and financing—aimed to connect to outcomes for FCS.

Programming

Notable progress was made in FCV diagnostics and strategic integration. RRAs improved in quality, consistency, and timeliness, and CPFs increasingly referenced FCV drivers. However, translation into operational programming remains weak. Many lending portfolios showed limited adaptation to fragility, and conflict sensitivity often emphasized risk mitigation over transformative impact. FCV indicators in strategies and projects remain inconsistent and rarely track outcomes related to fragility reduction.

Efforts to support private sector development in FCS fell short of expectations. The Bank Group can benefit from adopting more holistic approaches to support and leverage local private sectors. Despite corporate commitments, IFC and MIGA struggled to scale up investments due to a lack of bankable projects, challenging risk environments, and limited adaptation of their business models to FCS.

Financing

The significant increase in World Bank financial commitments to FCS was not matched by growth in administrative budgets, raising the risk for operational quality. Bank Group financial commitments to FCS increased significantly during the FCV strategy period. However, much of this growth was attributable to the new classification of several large borrowers as FCS, inflation, and the large COVID-19 pandemic response. When adjusting for these factors, the increase in World Bank financing to FCS was just 3 percent annually. However, administrative budget resources did not keep pace with these increases. Indeed, when adjusted for inflation and FCS reclassifications, administrative budgets declined by 7 percent. Analysis of budget data showed that given tight administrative budgets, the share of supervision budgets increased, indicating that CMUs prioritized resources for the implementation of operations in high-risk settings. However, this prioritization came at the cost of lower overall shares for analytical task budgets and lower preparation budgets in FCS, increasing the risk for the quality of the pipeline of new operations. Higher reliance on trust funds in FCS raises concerns about sustainability in the context of shrinking global development budgets.

The FCV Envelope facilitated structured policy dialogue and increased resource flows to IDA FCS countries. Yet portfolio analysis indicated that portfolio recalibrations often resulted in scaled-up versions of existing programs rather than fundamental shifts in the composition of the lending portfolios. Milestone frameworks linked to the PRA and the TAA supported more strategic engagement, but prevention financing primarily involved countries that had already descended into conflict, with the intent to prevent further deterioration. Transition challenges remain for countries that lose eligibility for FCV Envelope funds, with risks to program continuity and sustainability.

Policies and Institutional Practices

The OP for managing risk after irregular power transfers provides a robust framework for dialogue and managing financing, but its application is perceived as inconsistent and subject to bias. OP 7.30 on de facto governments allows the World Bank to pause its engagement after an irregular transfer of power in a borrower country, sets out a process, and provides the Bank Group with the ability to adapt in uncertain and often high-risk environments. However, inconsistencies in the interpretation and application of OP 7.30 undermine its credibility. While pragmatic flexibilities helped sustain engagements in some contexts, the lack of clear guidance and transparent procedures, as well as the highly political nature, contributed to perceptions of bias.

Partnerships

TPI became a key modality for operating in high-risk environments. The FCV strategy called for enhanced partnerships with a more diverse set of humanitarian, peace building, security, and private sector actors. The evaluation focused on the use of TPI, a core modality scaled up in the context of the FCV strategy’s priority of remaining engaged. TPI enabled continued service delivery in countries in ongoing conflicts or crises or where engagement with the government was not feasible, typically during the application of OP 7.30. However, TPI often lacked focus on long-term institution building and can prevent country ownership. In the absence of corporate guidance, contracting terms and cost structures were inconsistently managed, raising concerns about transparency, efficiency, and sustainability.

Personnel and Staff Incentives

Despite the strategy’s commitment to enhance staffing to meet the objectives in FCS, significant gaps remain. There are no clear principles or objectives to help plan or adaptively manage staffing in FCS, and systems for monitoring, evaluating, and learning are lacking. Attracting the most seasoned staff to FCS remained challenging. Personnel deployment gains were modest and primarily driven by FCS reclassifications. Staff deployed to FCS continued to be, on average, less experienced and were often considered to be lower performing than Bank Group averages, while staff based in hubs were considered essential but got less recognition for their roles. Promised improvements in incentives and career development were perceived as largely unmet. Data gaps constrained analysis of the World Bank’s actual FCV staffing footprint, including those staff working on but not based in-country, which undermines efforts to manage human resources more strategically and adaptively.

Early Results and Country-Level Findings

Early results from implementing the FCV strategy point to increased engagement in FCS and stable World Bank performance in project preparation and supervision, while IFC’s performance declined. However, project-level outcomes in FCS remain below those in non-FCS, and IFC’s investment project performance has declined significantly. MIGA’s few evaluated FCS projects performed well, but the limited sample constrains conclusions.

Country-level evidence from a sample of recent Country Program Evaluations reveals salient common findings of Bank Group engagements in FCS:

• Exceeding absorptive capacity. Lending allocations and commitments often exceeded implementation capacity, increasing the risks of project delays and weakening performance.
• Successes in gradual scaling. In low-capacity environments, using phased approaches and piloting engagements with monitoring, evaluation, and learning activities proved more effective than rapid scale-up.
• High risks to institutions’ sustainability. Gains in institution building and stronger service delivery are fragile, with limited domestic revenue generation or government capacity.
• Little adaptation in operations. A disconnect remains between strategic FCS commitments and operational practice in adapting operations to be sensitive to fragility.
• Weak accountability and learning. Weak FCV-relevant indicators impede learning and accountability.

Lessons

The evaluation identified the following lessons to strengthen the impact and institutional coherence of the next FCV strategy:

• It is important to clearly define the scope of the strategy across all FCV dimensions to ensure that each element can be effectively operationalized. The 2020–25 FCV strategy was comprehensive in discussing FCS but did not include engagement objectives for areas beyond the FCS list, including crime and violence and subnational conflict. Consideration could be given to whether to retain these elements or to address them elsewhere.
• Developing an implementation plan anchored in clear principles, objectives, and targets could help promote the operationalization of the strategy. The development of this plan would entail defining critical activities with specific actions, assigned responsibilities, timelines, and measurable indicators that are essential for effective operationalization. Integrating a strong monitoring, evaluation, and learning framework into the new country engagement approach will further enable teams to adapt to the uncertainties inherent in FCS.
• Curating and sharing knowledge improves the understanding of FCV-sensitive program design. This component includes developing and socializing knowledge among Bank Group TTLs and managers on good practices for FCV-sensitive engagements and helping translate the findings of fragility diagnostics into adapted operational programming.
• The IDA FCV financing tool kit could be further simplified, and the links between financing and fragility objectives could be made more explicit. Although the FCV Envelope is already more streamlined than its predecessors, further simplifying the FCV financing architecture by reducing the range of instruments and reducing complexity in the eligibility process could help strengthen its relevance and effectiveness. For example, the World Bank could revisit the eligibility and timing for prevention financing. In addition, top-ups could be better linked to fragility reduction objectives.
• Greater clarity on the objectives and greater central support would enhance TPI. Institutional capacity building could be more explicitly embedded within TPI projects, while standardized costing and contracting guidance could be developed to help teams to use TPI more effectively. Embedding (with results indicators) institutional capacity building and highlighting the importance of human capital within TPI would help strengthen the links to long-term development outcomes. Standardized guidance on costing and contracting should be developed to ensure more effective and sustainable outcomes.
• The implementation of strategic staffing, incentives, and adaptive management models can be greatly improved in FCS. This means articulating clearly defined principles based on expected outcomes, which can serve as a guide for managing and adjusting staffing levels in FCS. Regular monitoring of performance against these principles, using routinely available data, would enable timely adaptation and informed decision-making, ultimately strengthening the effectiveness of FCV engagements. Establishing clear, measurable commitments for improving recruitment, retention, career development, and recognition of staff working in FCS can promote more systematic follow-through and accountability. Additionally, introducing better targeted incentives for all staff working in FCS—regardless of their location—can further enhance motivation and performance.
• Improving data systems, results measurement systems, and FCV indicators can help inform learning, adaptive management, and strategic decision-making. Critical gaps in data systems identified by this evaluation include those for staffing and results that are sensitive to the FCS, as well as risk management.

Recommendations

IEG makes three recommendations to strengthen and provide directions for the next FCV strategy:

1. Publish an implementation plan for the FCV strategy to link strategic intent with action. The implementation plan should be grounded in clear principles, objectives, and targets. This plan should elaborate on critical activities connected via clearly articulated pathways to desired outcomes, detailing specific actions, assigned responsibilities, timelines, and measurable indicators to support the strategy’s implementation and periodic monitoring. This plan can then be tailored to specific country contexts through the new country engagement model, which stresses how using well-articulated theories of change can help clarify the logical links between interventions and intended outcomes. This approach should make it easier to design, implement, assess, and adapt country strategies. It would also enhance transparency, help identify knowledge gaps and challenges, and promote learning to adapt to changing FCS.
2. Enhance FCV-sensitive programming and approaches. The strategy should support the use of fragility and conflict diagnostics and improved FCV indicators to develop theories of change that lay out the various pathways linking the design of CPFs, projects, and programs to desired FCV outcomes. Bank Group FCV diagnostics, such as the RRA, should focus more on informing operational decision-making aimed at transformative impacts rather than emphasizing risk mitigation in FCS. Regular reviews should track implementation progress and challenges, helping teams learn and adjust their work to achieve better outcomes. This should lead to more country programs and projects that directly address the causes of fragility and conflict and have more explicit FCV goals. Also, establishing guidance for the selection, contracting, and cost parameters of TPI arrangements and their exit strategies should enhance the consistency, transparency, and value for money of such arrangements. In addition, sectoral engagements aimed at expanding economic opportunities and jobs should more actively involve the private sector in FCS, learning from successful examples and using both public and private sector instruments.
3. Revamp Bank Group financial and personnel resource frameworks and data systems to better align with the operating requirements in FCS. This alignment can be achieved by recalibrating administrative budgets for FCV portfolios to reflect actual needs, with regular reviews to ensure resources match rapidly changing requirements. This recommendation also requires a new strategic approach to strengthen the management of human resources in FCS through tailored career paths, training, and incentives. This will allow staff in FCS to have access to specialized development opportunities and enable the strategic objectives in FCS to be matched with commensurate skills and staff expertise. Actions under this recommendation might include introducing better targeted incentives for all staff working in FCS—regardless of their location—to further enhance motivation and appropriately reflect performance in different FCS. Overall, this would entail articulating clearly defined personnel management principles and commitments based on expected outcomes, which can serve as a guide for managing and adjusting staffing in FCS. Regular monitoring of performance against these principles, using routinely available data, should also enable adaptive management. In some instances, this will require better data and systems that can provide necessary information in a timely manner. Upgrading data systems for FCV operations, including real-time data dashboards, could help inform decision-making and adaptive management.

By addressing these areas, the next FCV strategy can more effectively equip the Bank Group to operate in increasingly fragile contexts and deliver on its development mandate.