Achieving poverty reduction and shared prosperity increasingly depends on the World Bank’s ability to effectively engage in conflict-affected environments. The World Bank Group has made a strong commitment to address the rising levels of poverty and human suffering in conflict-affected countries. Globally, conflict is becoming more complex and intense. The increasing intensity of warfare presents significant risks to an expanded volume of World Bank commitments in conflict-affected situations. Conflict actors are also more diverse—and are becoming increasingly internationalized; consequently, working in conflict-affected situations has become more complex. Complicating the battle against extreme poverty is the interaction among conflict, climate change, and the coronavirus pandemic (COVID-19), which is resulting in a reversal of poverty eradication gains.

The World Bank has adapted the way it works in conflict-affected situations. It has done this, among other things, by launching an ambitious fragility, conflict, and violence (FCV) strategy; introducing a new methodology for classifying conflict-affected countries on its list of fragile and conflict-affected situations; updating its conflict analysis methodology and operational policies based on lessons from experience; deepening and formalizing its partnerships with the United Nations (UN) and humanitarian agencies; and increasing the availability of finance tailored to various phases of conflict and fragility. Altogether, the share of commitments to conflict-affected countries, as a percentage of all new World Bank commitments, has risen from 5 percent in fiscal year (FY)10 to an annual average of 15 percent during FY15–20, or from $2.7 billion in FY10 to $7.2 billion in commitments in FY19. Over the same period, conflict-affected International Development Association (IDA)–eligible countries’ share of new commitments more than doubled.

The purpose of this evaluation is to surface lessons to inform early implementation of the World Bank’s FCV strategy in situations of conflict. The evaluation analyzes how the World Bank works differently in conflict-affected situations by assessing four key aspects of engagement: (i) the extent to which the World Bank identified and addressed conflict drivers and risks at the strategy and country levels; (ii) how these drivers and risks are integrated into operations; (iii) the ways in which the World Bank has adapted its engagement by working with clients during situations of political instability, partnering with the UN and the International Committee of the Red Cross, leveraging corporate security, and adjusting its portfolio instruments; and (iv) how the World Bank has contributed to project-level results and higher-level outcomes related to peace and stability.

Identifying and Addressing Conflict Risks at the Strategy and Country Levels

The identification and analysis of fragility factors and conflict drivers, relevant for achieving development effectiveness, have improved over the evaluation period. This is due to IDA FCV policy commitments, the development of the FCV strategy, country management commitment, and the elevation of the Risk and Resilience Assessments (RRAs) to a core diagnostic to inform lending. Compared with those of the first half of the evaluation period (2010–15), more recent conflict analyses are twice as likely to identify relevant factors of fragility and to articulate specifically how these factors influence conflict and violence.

However, the client-facing nature and the potentially broad distribution of conflict analyses in the World Bank have sometimes prevented frank assessments of fragility and conflict drivers, limiting the transmission of conflict considerations into portfolio and operational decisions. Specifically, the analyses and redress of conflict drivers has proven difficult when the root causes of conflict are overtly political (that is, geopolitics, elite capture, corruption, and pervasive governance challenges). Although these issues may be understood by World Bank country managers, the limited availability to task teams of information on the political contributors to conflict undermines efforts to tailor operations to conflict drivers. Also, the quality of the diagnostic, or hard-to-operationalize or missing recommendations in conflict analyses, have sometimes limited the transmission of conflict considerations into strategy and operations.

Conflict-informed sector advisory services and analytics prepared in the wake of political or social upheaval have helped country teams navigate local dynamics to inform World Bank responses. For instance, after Madagascar’s 2009 coup and during its political transition, the World Bank suspended disbursements and significantly cut back lending but ramped up nonlending activities. This enabled it to supplement its understanding of technical issues across sectors with conflict- and political economy–related factors. Much the same was true after conflict events in Burundi (2014–15), Iraq (2014–16), Myanmar (2017), and South Sudan (2013–present).

However, few sector advisory services and analytics conducted before major warring activities discussed conflict or political economy–related factors. Virtually all sectoral advisory services and analytics conducted before conflict—and easily accessible by staff (many political economy analyses remain confidential)—were not conflict sensitive.

Country teams are increasingly innovating with real-time conflict risk identification and monitoring. Although these efforts have been developed in reaction to major conflict-related events that posed significant risks to the World Bank and country portfolios, many have been sustained as a portfolio monitoring tool. Critical to these efforts is the use of local knowledge gleaned from social media, newspapers, and word of mouth, as well as the ability to interpret these events in relation to decisions that are taken in real time to adapt the World Bank’s country engagement.

Identifying and Addressing Conflict Risks at the Operational Level

Investment projects in conflict-affected areas increasingly identify and address fragility factors and conflict drivers; include adaptive, design, and implementation mechanisms; and mitigate exposure risks (in effect, “lean in” to conflict). Compared with the first half of the evaluation period, projects approved during the second half were 50 percent more likely to identify and address fragility factors and conflict drivers and include adaptive, conflict-sensitive design and implementation mechanisms. Likewise, fewer investment projects avoided or neglected conflict. Notwithstanding this improvement, the number of projects that consider conflict dynamics in conflict-affected areas remains low in Agriculture and Food, Energy and Extractives, and Transport, especially in the Sahel.

Key institutional and operational issues discourage staff from engaging effectively in conflict situations. There are disincentives to effectively engaging in conflict situations that stem from disbursement pressures and higher costs of supervision (in a context of limited resources for project implementation). Disbursement pressures and higher supervision costs discourage staff from covering conflict-affected areas. Staff cited pressure to disburse as a key reason for this behavior. Likewise, the higher costs of supervision (in a context of limited resources for project implementation) are dissuading staff from engaging more in conflict situations.

The existence of an RRA encourages leaning into conflict. RRAs, through formal identification and analysis of conflict drivers, make subsequent investment projects in a particular country more likely to integrate conflict sensitivity. The few operations that did lean in to conflict before an RRA tended to be located in countries that have experienced protracted subnational conflict and that have been assisted by an FCV coordinator or conflict expert (for example, Afghanistan and the Democratic Republic of Congo) or, in other words, countries in which conflict was already being mainstreamed into operations.

Although the World Bank swiftly rolled out emergency COVID-19 responses to all conflict-affected countries with an active portfolio, only half of these operations referenced conflict risks, raising the specter of potentially exacerbating conflict drivers. Although it is acknowledged that the COVID-19 response projects were developed during unprecedented circumstances, for countries already experiencing a high degree of conflict or instability, COVID-19 is best understood and responded to as a multiphase complex emergency. COVID-19 has presented second- and third-order risks—especially security risks—for countries already experiencing a high degree of conflict or instability, a situation that differs from non-FCV countries. Going forward, it may also be useful to bundle analysis about the COVID-19 response with other elements of early response (for example, through development policy financing to stabilize the macro framework) to see if there are common elements in emergency response in conflict environments that World Bank teams should take into account.

Working Differently in Situations of Conflict

The World Bank is often able to help reduce the negative developmental consequences of political instability by restoring critical financing and leveraging donor funding. In five of the six countries that experienced military coups or unconstitutional interruptions followed by restorations of constitutional order, the World Bank was the first development partner to reengage. In these countries, the World Bank helped preserve hard-won development gains by working with de facto governments during political transitions; indeed, more than 80 percent of emergency operations approved during these transitions effectively maintained critical service delivery.

In working with de facto governments that are also a party to conflict, to mitigate significant slippage in development gains, the World Bank had to wrestle with reputational risks. How to engage in conflict-affected situations is a decision taken by the World Bank—in consultation with member countries and its Board of Executive Directors—during times of uncertainty. Working with de facto governments during political transitions has enabled the World Bank to contribute to the preservation of hard-won development gains and limit the risk associated with inaction. But engagement decisions can have risks that are not apparent in the short run. The World Bank’s Middle East and North Africa strategy acknowledges this reality, pointing out the risk that stakeholders could perceive the World Bank as taking sides in a protracted political transition when it reengages, such as when it provides support to a social transition, as it did in the Republic of Yemen (World Bank 2015e). Indeed, engaging de facto governments during political transitions has posed risks to the World Bank’s reputation in several Middle Eastern and North African and some Sub-Saharan African countries (World Bank 2019d).

Leveraging UN and humanitarian implementation partnerships has enabled the World Bank to deliver critical services to conflict-affected populations in areas inaccessible to the World Bank. This has helped mitigate operational risks by enabling communication with nonstate actors otherwise off limits to the World Bank. The FCV strategy points to the need to step up partnerships with humanitarian, development, peace-building, security, and private actors to maximize impact in conflict-affected countries. Engaging UN agencies has enabled the World Bank to reach conflict-affected populations residing in hostile and contested areas. Because UN agencies are better able than the World Bank to negotiate with all parties to obtain access to parts of the country, partnering with them enables the World Bank to better understand social perceptions, group and network dynamics (such as whether certain groups will act as spoilers), and how to avoid doing harm. This has been the case in the Republic of Yemen, where a nonstate actor—the Houthis—controls the capital and most of the country’s north; providing health and social services to at-risk populations in those areas entails working with them to secure access.

Engaging and partnering with the UN has allowed the World Bank to finance critical services even in situations in which there is no central government. Without the possibility of partnering (authorized under Operational Policy 2.30), the World Bank would be hard pressed to provide support to vulnerable populations when there are multiple or no governments in power, given its state-centric model, such as in the Republic of Yemen after the 2014–15 conflict.

However, such implementation partnership arrangements have been challenged by disagreements over the implementation of fiduciary and security rules and protocols when problems arise. The World Bank has formalized relationships with UN agencies and the International Committee of the Red Cross, allowing them to follow their own rules and protocols when implementing World Bank–financed projects; however, when procurement or financial management issues have arisen from implementation problems, differences between World Bank and UN systems have contributed to a perception on the side of the World Bank of heightened fiduciary risk. Additionally, UN agencies abide by their own security policies, developed in line with a risk calculus of acceptable loss as a function of lives saved. However, the World Bank has a lower risk tolerance; when faced with these calculations, some Country Management Units have been reticent to adhere to the arrangements followed by UN agencies.

In the face of heightened conflict or political crises, the World Bank has effectively rebalanced its financial support when doubts have arisen about government commitment to sound fiduciary management. After crises in Burundi (2015), Guinea-Bissau (2012), and Myanmar (2013), the World Bank halted budget support and repurposed IDA to sustain service delivery through investment lending. This allowed it to mitigate the reputational risk associated with providing fungible budget support, which could more easily be diverted. In Madagascar and Somalia, the World Bank pivoted toward subnational entities to bypass political deadlock or to avoid reputational risk associated with working with particular regimes. Trust funds have also been crucial in allowing the World Bank to operate in conflict situations in which IDA resources were unavailable or limited, including in Somalia, Sudan, and West Bank and Gaza; they have also provided resources to cover the extraordinary costs of working in conflict situations and allowed the World Bank to innovate across the portfolio, including in the areas of risk monitoring, conflict analysis, and third-party monitoring mechanisms.

The World Bank has significantly ramped up its security coverage to better support its operations in conflict-affected situations. Enhanced measures include expanding the number of country-based security professionals and ensuring that new staff possess the qualifications—including soft skills—needed to support the safety of operational teams. This has also enhanced the World Bank’s capacity to translate security analyses into operational recommendations to heads of office.

However, security-related costs are extremely high and come out of project supervision charge codes. This has been a disincentive to engaging in conflict-affected areas, especially in locations where vendor-based close protection is needed. Also, the deployment of Corporate Security staff is based on the number of nonsecurity staff and frequency of missions per country. This may negatively affect smaller countries and Country Management Units, potentially leading to disconnects between risk level and security staffing.

There are marked differences in operational responses to otherwise similar security instances. Unlike the UN, the World Bank does not provide concrete guidance to heads of missions on how to systematically process data on changes to conflict risk levels as they pertain to the country portfolio. Without this, responses to similar security incidents have varied depending on the risk tolerance of the head of office, and there is no process in place to ensure that the decision-making regarding these issues is optimal.

Results and Outcomes of World Bank Engagement in Situations of Conflict

At the country level, results frameworks do not capture the World Bank’s contribution to conflict-related country outcomes well. This reflects the absence of both a clear conflict narrative and integration of conflict-related issues into country objectives. Few Country Partnership Framework results frameworks are adaptive and capture conflict-reduction aims; the World Bank’s reliance on quantitative metrics, attribution, and short time frames may not suit the nature of country programs in conflict-affected countries and their contribution to higher-order outcomes.

Country Partnership Frameworks that have received additional FCV IDA allocations have a more coherent narrative about their transition. Yet their results frameworks only monitor progress of allocation areas directly supported by the World Bank.

An accurate picture of project outcomes is elusive in conflict-affected countries because only a small share of investment projects are evaluated and evaluations in conflict-affected areas are not comprehensively assessing Bank performance. Many trust-funded activities, often used in these contexts, are not being evaluated by the World Bank to support adaptive decision-making and learning; they also fall below the threshold for Independent Evaluation Group validation. Expanding the evaluated share of projects in conflict situations and revising evaluation guidance would provide a more accurate picture of outcomes and contribute to learning from experience.

There are information gaps about the way the World Bank is monitoring or assessing unintended outcomes in conflict-affected areas. Little is known about how World Bank operations in conflict-affected areas can exacerbate underlying grievances. Relatedly, although attention to gender-based violence by the World Bank is increasing, the percentage of at-risk projects in conflict-affected areas that include mitigation measures remains low and is inconsistent. Although the use of armed security personnel is rising, few projects indicate how associated risks will be mitigated in project areas.

Recommendations

To improve the effectiveness of its engagements in conflict-affected settings, the World Bank will need to address key impediments and implementation challenges that undermine its ability to adapt to context, derive lessons from experience, and manage risk.

To achieve this, the evaluation puts forth four specific recommendations:

Recommendation 1. To enhance the conflict sensitivity of World Bank engagement, ensure that politically sensitive, confidential analysis is generated, retained, and managed so that it can be used by select future staff working on that country. Partial coverage of conflict drivers can at times reflect the client-facing nature and the potentially broad distribution of conflict analyses in the World Bank. To address this, there is a need for a well-understood and safe channel for retaining, managing, and conveying extremely sensitive information that cannot be widely circulated internally or put into publicly disclosed documents. The management of this information should not rest solely with individual heads of office.

Recommendation 2. Ensure that country engagements are informed by timely analyses of conflict dynamics and risks. This would entail regularly and systematically using conflict analysis for strategy and operational decision-making and other forms of timely conflict risk monitoring (for example, that track shifts in societal perceptions and dynamics and that identify opportunities for peace building) to support adaptive decision-making at the country level.

Recommendation 3. Address factors that dissuade World Bank engagement in conflict-affected areas. Several of these factors have resulted in inadequate financial and technical support for project preparation and project supervision in conflict-affected areas. They have contributed to insufficient security coverage for operationally relevant staff who support the implementation of projects in these areas, but who are not directly employed by the World Bank.

Recommendation 4. In conflict-affected countries, rethink what success looks like. This will require moving away from an over-reliance on quantitative metrics, attribution, and short time frames that do not suit the nature of these country programs and their contribution to higher-order outcomes. Higher-order outcomes should reflect transition aims and the development of monitoring and evaluation systems to track these aims. Country Partnership Frameworks should include a clear conflict narrative, integration of conflict considerations into objectives, and adaptive results frameworks to capture conflict-reduction aims. Programmatic trust funds used in such contexts should frame their objectives against these transition aims, while putting robust evaluation and learning systems in place. Many trust-funded activities are not being evaluated by the World Bank to support adaptive decision-making and learning. The World Bank should address inadequate compliance with evaluation requirements for smaller projects, many of which are funded by trust funds. This would require the Independent Evaluation Group to revisit its current $5 million threshold for validating Implementation Completion and Results Reports.