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Transitioning to a Circular Economy

Chapter 5 | Conclusions and Recommendations

Municipal solid waste is projected to triple in volume in LICs by 2050 (and nearly double in LMICs and UMICs). Most of the waste in LICs and LMICs is managed improperly, untreated, and disposed of in open dumps. Left unmanaged, the growing volume and changing composition of waste—including nonbiodegradable and plastic waste—will continue to contribute to an increase in greenhouse gas emissions and global and local land and water pollution, which affect the health and welfare of impoverished people disproportionately.

Municipal solid waste should be managed through a waste hierarchy approach that puts efforts to reduce consumption and increase reuse ahead of efforts focused on waste collection, recovery, and disposal. The waste management hierarchy complements circular economy thinking, which promotes efforts to recycle end-of-life products back into the economy, in addition to promoting waste reduction and reuse.

The Bank Group has increasingly recognized and advocated for waste hierarchy and circular economy approaches to MSWM. World Bank Group (2021), for example, sets out a goal of pursuing integrated waste management and circular economy approaches to help countries and cities advance climate, development, and broader sustainability goals.

However, waste hierarchy and circular economy principles are yet to be mainstreamed into many country strategies and operations. Just over one-third of the 55 countries in which the World Bank has supported MSWM activities include references to the waste hierarchy or circular economy aims in their SCDs or CPFs, and only 11 countries with MSWM portfolios included activities geared toward achieving an integrated approach.

Bank Group support does not consistently provide for some elements essential to integrated waste management, including revising policies, planning for cost recovery, involving the private sector, incorporating behavioral factors, and considering waste pickers. The Bank Group often supports the provision of infrastructure and services that are expected to increase MSWM coverage and improve service delivery. However, to achieve an integrated approach, the Bank Group needs to simultaneously address more of the determinants of MSWM in more of its activities.

The Bank Group infrequently diagnoses and addresses municipal solid waste issues in LICs, where they are most urgent. Less than half of SCDs in LICs—where waste generation and associated negative effects are mounting—diagnose MSWM issues, compared with almost all SCDs in UMICs and HICs, and only two LICs received funding for MSWM. Relatedly, LICs received 1.5 percent of all Bank Group MSWM spending.

There has been limited Bank Group collaboration in support of MSWM. References to the complementary roles that the World Bank and IFC can play in a coherent approach for improved MSWM are absent from most CPFs, CPSDs, and IFC country strategies. MSWM has been a very difficult sector for MIGA to enter because of several constraints related mainly to the lack of bankable projects that would seek guarantees and the capacity limitations of municipalities as counterparts.

The World Bank is helping clients achieve its policy, capacity development, and planning goals, but the links between these goals and MSWM outcomes are not articulated. IFC does not play a strong role in MSWM policy and institutional development. However, in the few instances when it did provide that support through its advisory services, it showed that it can be effective in improving enabling frameworks for private investment in MSWM.

Efforts to identify and clarify MSWM policy and regulatory issues tend to take place in countries where the Bank Group has supported a more integrated approach. The specific link between policies and regulations enacted and overall improvements in MSWM systems are often not articulated. However, successful efforts to enact policy and regulations are found in countries that have undertaken activities geared toward achieving integrated approaches.

World Bank support for basic municipal solid waste infrastructure and service delivery has been generally effective. Infrastructure and service provision are the leading activities in the World Bank’s MSWM lending support, and they were carried out as planned in most MSWM-related projects. These are necessary but not sufficient conditions for improving the MSWM value chain, though.

The effectiveness of infrastructure and service activities is undermined by challenges in achieving financial sustainability. The World Bank addressed the issue of cost recovery and improved financial sustainability in about 40 percent of closed projects, which yielded positive results in just over half of the cases. Lessons can be learned from some lower-middle-income economies (Mozambique, Vietnam, and West Bank and Gaza) where most of the solid waste providers’ costs were recovered from user fees. However, several other countries had less success in meeting cost recovery targets, even at project completion.

Very few projects tracked the environmental, social, or economic outcomes of improved MSWM activities. Of the projects that did, many either did not report on outcomes or reported that the intended outcomes were not achieved because of delays or implementation challenges with the MSWM activities. Local governments and regulatory agencies are ultimately responsible for measuring these impact areas, and this measurement may require more specialized and expensive interventions than are provided currently.

Capturing higher-order impacts shows the substantial contributions that MSWM can make toward countries’ environmental, social, and economic goals. Good practice examples show how investments in MSWM can contribute to reducing global greenhouse gas emissions (in Bosnia and Herzegovina) and local pollution (especially in China). Other examples show how focused attention on job creation can enhance the economic security and working conditions for lower-income urban populations, including youth and women, and for those living in fragile and conflict-affected situations, as in the Central African Republic and Côte d’Ivoire.

Four factors have a strong, often limiting, influence on the effectiveness of the Bank Group’s MSWM support. These factors are (i) the nature of World Bank support in terms of continuity, coverage, and coherence; (ii) government commitment to ensuring the financial sustainability of MSWM; (iii) local governments’ accountability for providing adequate and sustainable MSWM services; and (iv) land availability and the NIMBY phenomenon.

Long-term, well-sequenced, and coherent engagement across the evaluation pillars was linked to achieving improved MSWM. Extended, well-sequenced, and coherent country engagement that includes support for key policy reforms and investment has been effective in helping countries build an integrated approach to MSWM incrementally. For this reason, improved MSWM is more likely to be achieved when MSWM is the focus of a core project rather than when it is included as a smaller project component. The evaluation highlights examples of such country engagements, mainly in LMICs and UMICs.

The inability of governments to ensure sustainable financing is a second factor affecting the provision of adequate MSWM services. This inability can arise at any layer of government (national, provincial, or local), mainly because of lack of political commitment or competing demands for public financing. Several World Bank projects included components for ensuring the financial sustainability of MSWM services through arrangements for improved cost recovery via user fees or tariffs, sometimes supplemented by earmarked municipal revenues or budget transfers from provincial or central governments. In some cases, the expected results were not achieved at project completion, and even where favorable results were achieved, the improvements attributable to the projects were often not sustained.

The third factor limiting effectiveness is local governments’ accountability for providing adequate and sustainable MSWM services. Accountability for adequate and affordable MSWM services can be undermined by lack of transparency and vested interests in existing arrangements for service provision for solid waste collection and transport. Addressing these political economy issues can be facilitated by improved arrangements for monitoring of MSWM services, for which internet and cell phone–based systems are readily available and affordable. Improved monitoring needs to be combined with increased awareness and behavior change on the part of all stakeholders, including waste generators (households and enterprises), local and national governments, and service providers.

The fourth factor limiting the World Bank’s ability to provide support to clients is the inability to acquire land for solid waste infrastructure. The constraint is partially attributable to the NIMBY phenomenon.

The Bank Group is by far the leading source of lending and knowledge on solid waste management. The Bank Group’s lending of about $3 billion for MSWM during FY10–20 far exceeds that of other multilateral development banks. Regarding knowledge, the Bank Group produced two flagship reports on the state of and approaches to MSWM worldwide—What a Waste and What a Waste 2.0—and has been conducting technical certification courses on MSWM for professionals and policy makers worldwide. Without an international coordination mechanism for MSWM, leading sector experts see scope for a global convening role on MSWM for the Bank Group that goes beyond and builds on current efforts on marine plastic pollution through PROBLUE and advocacy for circular economy approaches for MSWM under the climate change action plan.


The evaluation identifies three areas where the Bank Group can enhance its relevance and effectiveness when supporting countries with MSWM.

Recommendation 1. To achieve more sustainable and scalable outcomes in municipal waste management, Bank Group technical and financial support to clients should give clear priority to the adoption and implementation of waste hierarchy practices, in line with client needs and capabilities for MSWM. To achieve this, the Bank Group’s support could build on proven good practice from its own experience in addressing the entire waste value chain (collection, transport, recycling, recovery, and disposal) in an integrated, phased, and incremental manner tailored to client needs and capabilities. This would require greater collaboration among the World Bank, IFC, and MIGA in supporting governments with promoting financial sustainability and accountability in service provision, updating policies and regulations, incentivizing private sector participation, increasing awareness and behavioral change, and integrating waste pickers into MSWM processes.

Recommendation 2. To support the LICs where municipal solid waste is growing most rapidly, the Bank Group should identify constraints on demand and investments and leverage external partnerships to implement context-specific MSWM solutions. To achieve this, the Bank Group could increase its ASA in LICs and foster external partnerships to find context-specific solutions appropriate to the prevailing policy and service delivery gaps. This would entail, for example, systematically closing illegal dumps, ensuring that the regulatory framework is clear and predictable, and providing incentives to reduce the rate of growth of waste generation and increase recycling, with a view to support LICs to “leapfrog” (move forward rapidly through the adoption of modern systems without going through intermediary steps) to the extent possible.

Recommendation 3. To bring prominence to and spur action on the global municipal solid waste agenda, the Bank Group should take up a clear leadership position, collaborating and convening with developmental partners. The Bank Group could leverage its leading role in financing and knowledge for MSWM by building on and scaling up current partnerships to improve municipal solid waste practices in the context of the climate change action plan and in specific areas, such as addressing riverine and marine plastic pollution through PROBLUE.