Context

Situations of fragility, conflict, and forced displacement have intensified over the past decade. More than 1 billion people—one out of every eight globally—live in countries on the World Bank’s list of countries classified as fragile and conflict-affected situations (FCS). In these countries affected by fragility, conflict, and violence (FCV), development progress has been upended, and by 2030, 60 percent of the world’s extreme poor are projected to be living in FCS, up from 50 percent in 2024. Fragility and conflict are among the most intractable development challenges, and the ability to operate under FCV conditions is increasingly important to achieving development progress and the World Bank Group’s mandate. Stable, peaceful, and resilient societies make effective development possible.

In 2020, the Bank Group launched its first FCV strategy—the World Bank Group Strategy for Fragility, Conflict, and Violence 2020–25—to improve the effectiveness of its engagement in FCS. The strategy built on more than a quarter-century of Bank Group experience with fragility and conflict and aimed to address the drivers and consequences of FCV and to build resilience, especially among the most vulnerable populations. It proposed changes to the Bank Group’s operational framework to promote effective engagement in FCS. The changes encompassed programming, personnel and staff incentives, partnerships, policies, and enhanced financing tools.

About This Evaluation

This evaluation seeks to support the development of a new Bank Group FCV strategy by gathering insights and lessons learned from the implementation of the 2020–25 strategy.

The evaluation examines the relevance and implementation of the strategy’s adjustments to the Bank Group’s operational approaches in FCS. As the aim of those adjustments was to make engagement in FCV more effective, the evaluation examines whether the changes have had an effect on how the Bank Group operates in FCV contexts. The evaluation focuses on 42 countries classified as FCS by the Bank Group and covers FY 2015–24. In a second phase to this evaluation, planned for FY27, the Independent Evaluation Group (IEG) will focus on outcomes of Bank Group engagement in countries affected by FCV.

Overall Findings

The 2020–25 strategy was relevant in its strategic orientation, although additional components are needed to translate aspirations into operational outcomes. The strategy was timely, ambitious, and comprehensive in covering challenges across the full spectrum of fragility and conflict. However, it lacked a theory of change to connect changes in the Bank Group’s operational framework to desired outcomes—such as strengthened institutions, the delivery of services to citizens, and more economic opportunities. Another shortcoming of the FCV strategy was its lack of an implementation plan with clear actions, responsibilities, targets, or indicators to help guide implementation at both the Bank Group and country levels. In addition, the strategy did not elaborate on engagement objectives for some FCV issues it had identified, such as crime and violence, subnational conflict, or forced displacement contexts.

The FCV strategy has enabled the Bank Group to advance its engagement with FCV issues, even amid heightened global volatility and crises. Tangible progress has been made in strengthening the Bank Group’s analytical and knowledge base for engaging in countries affected by FCV, incorporating fragility-sensitive considerations into strategies and programs, and deploying targeted financing instruments. It also strengthened partnerships in operations in FCS, particularly with the United Nations agencies. Overall, the Bank Group has adapted by maintaining its presence in countries experiencing ongoing conflict or crisis, such as with a more people-centered service delivery approach when remaining engaged in countries affected by conflict or crises.

Efforts to support conflict prevention have had limited success. This outcome is partly because additional support notionally targeted at prevention often arrived after countries had already entered conflict.

Additionally, the Bank Group’s internal operational framework remains incomplete. Inconsistencies between strategic objectives, analytics, and implementation continue to hinder the effectiveness of the Bank Group’s work in FCS. Gaps include the following:

• Challenges in articulating pathways from Bank Group engagements to results indicators and higher-level FCV outcomes;
• Limited ability of fragility diagnostics in guiding operational decisions;
• The stagnation of administrative budgets in the face of increased FCS engagement;
• The lack of staff incentives;
• Limited policy flexibility; and
• Unmet expectations of impact when engaging the private sector and using third-party implementation (TPI).

The following sections detail the main aspects of the Bank Group’s operational framework.

World Bank Group Financing in FCS

Financial commitments to FCS increased during the strategy period, driven by several large countries falling into fragility and conflict and the COVID-19 pandemic. The Bank Group’s FCV strategy (2020–25) set the vision, objectives, and pillars for engagement in FCV contexts, and financing tool kits informed by dialogue around the strategy provided the instruments, resources, and operational flexibilities needed to deliver on those objectives. These tool kits are elaborated through Bank Group policies and corporate strategies, initiatives, and commitments where FCV is prioritized, such as the 19th Replenishment of the International Development Association (IDA), the International Bank for Reconstruction and Development and International Finance Corporation (IFC) capital increase package, the Bank Group’s FY20–22 Human Resources Strategy, and the Multilateral Investment Guarantee Agency (MIGA) FY21–23 strategy. World Bank financing support almost tripled in nominal terms, reaching an average $15.2 billion per year during FY20–24, compared with $5.2 billion during FY15–19. During FY20–24, FCS accounted for an average of one-fifth of the International Bank for Reconstruction and Development’s lending commitments and one-third of IDA financing. This growth was attributable to the new classification of several large borrowers as FCS (such as Ethiopia, Nigeria, and Ukraine) and the large Bank Group shock response to the COVID-19 pandemic. However, in real terms—when adjusted for inflation—these nominal increases diminished significantly.

IFC and MIGA increased their commitments, with 6.4 percent of IFC long-term commitments and 9.2 percent of MIGA’s guarantee volume going to FCS. IFC committed $4.7 billion in long-term investments, and MIGA issued guarantees for $2.7 billion. As with the World Bank, these increased commitments reflect increases in the number of countries classified as FCS. IFC and MIGA have adapted and increased their toolbox for operating in FCS, but IFC’s capacity-building and pipeline development efforts have thus far not met corporate targets. This is in part due to private activity in FCS having been constrained during the strategy period by the disruptions resulting from the COVID-19 pandemic and, since then, the context of a historically weaker level of growth than in the decade before COVID-19, including a decline in foreign direct investments.

World Bank administrative budget resources did not keep pace with the increases in financing volumes. In fact, when adjusted for inflation and FCS reclassifications, World Bank administrative budgets in FCS declined by 21 percent in real terms. Given tight administrative budgets, Country Management Units opted to ring-fence supervision budgets, prioritizing resourcing for the implementation of operations in high-risk settings. However, this decision came at the cost of analytical task budgets and preparation budgets, which might adversely affect the quality of the operations pipeline. A heavy reliance on trust funds in FCS also raises issues of sustainability when development resources are shrinking globally. For IFC and MIGA, the cost of doing business in FCS has historically been significantly higher than in non-FCS.

The IDA FCV Envelope facilitated a more structured policy dialogue and increased resource flows. The FCV Envelope provided a cumulative $10.4 billion in commitments during the IDA19 and IDA20 replenishing rounds. Milestones linked to the IDA Prevention and Resilience Allocation and the IDA Turn Around Allocation enabled a more strategic dialogue between the World Bank and recipient countries, but rather than adapting project portfolios to better address fragility, the allocations often led to simply expanding existing portfolios. Prevention support primarily involved countries that had already descended into conflict, with the intent of preventing further deterioration. More recently, eligibility for the FCV Envelope has been selectively expanded to countries before conflicts have escalated, such as Benin and Togo. Interviews with Country Management Units and other World Bank staff working on FCS highlight the transition challenges for countries that lose eligibility for FCV Envelope funds, including risks to program continuity and sustainability.

Programming

Country Partnership Frameworks in FCS have made important strides in integrating FCV concerns but need to strengthen links to operational programming through better use of diagnostics, conflict-sensitive portfolios, and FCV indicators. Notable progress was made in improving the quality and timeliness of FCV diagnostics, particularly Risk and Resilience Assessments, and in integrating the findings of these diagnostics into country strategies. To maximize their impact, Risk and Resilience Assessments could focus more on operationally relevant recommendations. Gaps persist in the relevance of these assessments to operational decision-making, as well as in how they incorporate geopolitical and corruption issues, scenario planning, and climate-fragility links. Similarly, although Country Partnership Frameworks increasingly referred to FCV drivers, integrating FCV drivers into operational programming and adaptation to fragility remains a work in progress. While some outcomes, such as improved governance and institution building, may be more intangible and inherently difficult to measure, engagements can deepen the conflict sensitivity of projects and programs, with clear FCV indicators and more granular strategies on partnerships—especially in countries where TPI is a key delivery model.

Lending portfolios showed limited adaptation to FCV issues. More often, the lending portfolio emphasized risk mitigation over transformative impact. Results frameworks and indicators in strategies and projects are often inconsistent and typically do not track outcomes related to fragility reduction.

The Bank Group lacks an effective and coordinated approach for engaging in private sector development in FCS, and so far, efforts have not realized the intended impacts. Achieving this impact is a priority of the One World Bank Group agenda, and IFC and MIGA have set ambitious targets to scale up their business volumes in FCS. However, engaging in FCS is challenging due to poor enabling environments, high risks, and a shortage of bankable projects that meet IFC and MIGA standards and criteria. To address such constraints, the Bank Group is attempting to collaborate and coordinate more systematically to tackle FCS-specific risks and improve the private sector enabling environment. Country-level evaluations indicate that most of these efforts have been relevant yet often insufficient to overcome constraints to private investment in FCS.

Policies for FCS Operations

The FCV strategy generally supports operational flexibility in FCS, but beyond revising Operational Policy (OP) 2.30 no specific measures adapting Bank Group procedures and practices were proposed or rolled out. As such, this evaluation focused on traditional outcome measures of operational flexibility—that is, the use of waivers and project preparation times in FCS compared with non-FCS. No differences in the use of waivers or project preparation times were found, despite higher context complexity in FCS.

OP 7.30, which outlines the Bank Group approach to dealing with de facto governments, has helped the World Bank navigate its engagement during times of irregular power transfer in borrowing countries, but its application is perceived as inconsistent. OP 7.30 is a tool that allows the World Bank to pause its engagement during irregular transfers of power (such as a coup d’état) in a borrowing country. However, inconsistencies in the interpretation and application of the policy undermined its credibility as a tool to reduce and manage the World Bank’s political and reputational risks.

The processes for applying, assessing, and lifting OP 7.30 are not sufficiently explicit, which can lead to perceptions of inconsistency. Pragmatic flexibilities helped sustain the World Bank’s engagement in some contexts. However, clearer guidance and transparent procedures are needed to reduce perceptions of inconsistency and potential bias. Practices among multilateral agencies varied considerably regarding procedures similar to OP 7.30, with most agencies not having such a procedure at all.

Partnerships in World Bank FCS Operations

The FCV strategy aimed to expand partnerships at the corporate and operational levels with a more diverse set of actors, including those focused on humanitarian support and peace building and those representing the private sector. Over the past 15 years, the Bank Group has deepened its engagement with a wider range of development partners, reflecting a notable shift toward collaborative approaches to addressing FCV challenges. For example, the partnership with UNHCR, the United Nations Refugee Agency (formally known as the Office of the United Nations High Commissioner for Refugees), deepened joint responses to forced displacement. Other United Nations agencies have monitored milestones for the Prevention and Resilience Allocation and the Turn Around Allocation, supporting accountability in highly fragile environments. In addition, joint Risk and Resilience Assessments have informed joint engagements and helped coordinate response. This evaluation focused on assessing operational partnerships, primarily partnerships in TPI. Partnership with the United Nations agencies was the most significant TPI delivery modality that was scaled up to support the FCV strategy’s priority of remaining engaged.

TPI has become a key operational tool for the World Bank to remain engaged in countries in conflict or crisis or where direct implementation with a government is temporarily not feasible. TPI was increasingly applied during the 2020–25 FCV strategy period, accounting for about 10 percent of IDA and International Bank for Reconstruction and Development FCS commitments and 20 percent of FCS projects. TPI enabled the World Bank’s continued engagement during OP 7.30 episodes.

Although the majority of TPI projects include development components, these projects tend to be somewhat more output oriented than World Bank–implemented FCS projects. This orientation may contribute to a perception of blurred lines between the World Bank’s development engagement and humanitarian support. Direct TPI of World Bank projects, implemented mainly by United Nations agencies, has concentrated on health and social protection interventions with defined outputs such as cash transfers, equipment, medical supplies, and external technical assistance, which may lay the foundations for critical outcomes by protecting human capital.

An important finding of this evaluation is that the majority of the World Bank’s TPI projects included development components, though not systematically. These projects included long-term strengthening of institutions and capacity-building components and contributed to long-term development by maintaining or building human capital. However, there is no evidence of a systematic approach to institution building in World Bank–supported TPI engagements. The long-term development impact of TPI could therefore be enhanced by systematizing support for institutions and capacity building.

In the future, TPI-based World Bank engagements would benefit from clearly defined time limits and explicit phase-out strategies. Treating these engagements as temporary from the outset and establishing a timed exit strategy during project design and approval would promote a planned transition either to standard World Bank implementation procedures or to a gradual phaseout. This approach aligns with the World Bank’s development mandate and helps mitigate dependency on Bank Group financing among agencies undertaking TPI.

The portfolio supported by TPI has performed well—compared with the World Bank–implemented projects in FCS—yet there is neither operational guidance nor support for contracting TPI arrangements for country teams. Additionally, IEG could not assess the value-for-money proposition of TPI arrangements due to a lack of data access. There is no established practice or guidance for the selection or contracting of third-party agencies, which typically leaves Country Management Units on their own to negotiate TPI arrangements with potential partners. Most critically, appropriate cost parameters or benchmarks for TPI arrangements are not provided to country teams. TPI cost data were not disclosed to IEG in aggregate, by country or by project. IEG was only able to obtain anecdotal cost evidence from individual Country Management Units. The World Bank needs to improve its practices and guidance to country teams on TPI selection, contracting, and costs to ensure consistency, transparency, and value for money in TPI arrangements.

Personnel in FCS Operations

Attracting the right staff to FCS remains challenging, even though the number of staff deployed increased in line with the number of countries classified as FCS. The FCV strategy did not clearly define principles or expected outcomes to help guide, manage, and adjust the staffing in FCS. Aside from the staffing impact of countries redesignated as FCS, staff in FCS increased by only 1.4 percent. Hiring managers in these countries indicated in interviews that they face difficulties in attracting the best and most experienced staff. Data confirm that staff working in FCS are less experienced, as measured by years of in-grade experience, and that FCS are less likely to attract top talent. Without a large pool of experienced internationally recruited staff willing to deploy to FCS, managers and staff have promoted locally recruited staff, which accounts for the majority of the increase in senior professional staff in FCS. There is some perception that less global knowledge is flowing to FCS in need of both innovative and tested-and-tried approaches. Data gaps limited IEG’s analysis of the World Bank’s actual staffing footprint in countries affected by FCV, and the gaps undermine efforts to manage human resources more strategically for FCS.

Among staff and management working in FCS, there is a strong perception that the strategy’s commitments relating to staff incentives and career development have not been met. Perceptions about inadequate incentives and lack of follow-through on commitments to career development were evident in case studies, interviews, and focus groups. In practice, there are two parallel models of incentives for staff working in FCS: the in-country model and the hub model. Staff working in FCS but based in nearby hubs are not entitled to any FCS benefits, even if a large portion of their work is in FCS. Staff based in FCS are provided with compensation and greater benefits, but most of the posts are not for families, and the hardship makes it difficult to attract the most experienced specialists. In the upcoming strategy, the Bank Group may wish to look at staff incentives and reconsider its staffing model to balance those working on and regularly traveling to FCS with those located in FCS. Improvements to the data available will help management adapt staffing to better suit such volatile environments.

Early Implementation Findings

During implementation of the 2020–25 strategy, project-level results indicated stable project outcome ratings for the World Bank; however, IFC’s investment project performance declined. Overall, World Bank project-level outcome ratings in FCS remain comparably below those in non-FCS, while ratings of the World Bank’s own performance have improved. However, IFC’s investment project performance ratings have declined significantly. MIGA’s few evaluated FCS projects performed well, but the limited sample constrained conclusions. A synthesis of FCS country evaluations indicates several salient cross-cutting findings:

• Lending commitments in FCS often exceeded absorptive capacity, increasing the risks of project delays and weakening performance.
• In low-capacity environments, phased approaches and pilot engagements with monitoring, evaluation, and learning proved more effective than rapid scale-ups.
• Gains in institution building and strengthening of service delivery remained fragile, especially with limited domestic revenue generation and government capacity.
• A disconnect remained between strategic FCS commitments and the operational practice of adapting portfolios to be sensitive to FCV.
• Weak FCV-relevant indicators impede learning and accountability.

Lessons

This evaluation identifies 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 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 essential for effective operationalization. Integrating a strong monitoring, evaluation, and learning framework into the new country engagement approach further enables 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 task team leaders 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 complexity in the eligibility processes 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 linked to fragility reduction objectives more clearly and systematically.
• Offering greater clarity on the objectives and more central operational support would enhance TPI. Institutional capacity building could be more explicitly embedded within TPI projects, and standardized costing and contracting guidance could be developed to help teams use TPI more effectively. Embedding institutional capacity building (with results indicators) 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 staffing management models in FCS can be greatly improved. The strategy could articulate 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 inform decision-making, ultimately strengthening the effectiveness of FCV engagements. Establishing clear, measurable commitments for improving the 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 FCS, as well as risk management.

Recommendations

IEG makes three recommendations to strengthen and provide direction 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 Country Partnership Frameworks, projects, and programs to desired FCV outcomes. Bank Group FCV diagnostics, such as the Risk and Resilience Assessment, 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.