The World Bank is adapting the way it engages in situations of conflict to achieve its corporate goals. It has done this, among other things, by launching an ambitious FCV strategy, updating its conflict analysis methodology and operational policies, expanding and deepening its partnerships with the UN and humanitarian agencies, and providing financing tailored to various phases of conflict and fragility.

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 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 drivers of FCV.

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. 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 ASA prepared in the wake of political or social upheaval have helped country teams navigate local dynamics to inform World Bank responses.

However, few sector ASA conducted before major warring activities discussed conflict or political economy–related factors. Virtually all sectoral ASA 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. 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 real-time decisions to adapt the World Bank’s country engagement.

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. The existence of an RRA was shown to encourage “leaning in.” 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.

When faced with security-related implementation challenges, fewer than 20 percent of projects in the portfolio analyzed that had initially avoided or neglected conflict used restructuring or flexible mechanisms to adapt project design. This differs from projects that “lean in,” which included adaptive mechanisms to mitigate such risks. Staff and a World Bank review of the use of conflict analyses in operations cite pressure to disburse as a key reason for this behavior.

Although the World Bank swiftly rolled out emergency coronavirus pandemic responses to all conflict-affected countries with an active portfolio, only half of these operations referenced conflict risks in their project documents, raising the specter of potentially exacerbating conflict drivers. It is acknowledged that the COVID-19 response projects were developed during unprecedented circumstances. However, the pandemic has presented particular risks for countries already experiencing a high degree of conflict or instability, contributing to a multiphase, complex emergency—a situation that differs from non-conflict-affected countries.

The World Bank is often able to help stem the developmental consequences of political instability by restoring critical financing and leveraging donor funding. In these instances, the World Bank has helped preserve hard-won development gains by working with de facto governments during political transitions (and avoided risks associated with suspension and delayed engagement).

However, in working with de facto governments that are also a party to conflict, the World Bank’s engagement has led to perceptions of it taking sides or being a party to a failed social transition. 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). Yet there are also risks of inaction (including reputational risks involved in not acting).

Leveraging UN and humanitarian implementation partnerships, including in situations in which there is no central government, has enabled the World Bank to deliver critical services to conflict-affected populations in areas inaccessible to the World Bank. This has also helped mitigate operational risks by enabling communication with certain nonstate actors that are otherwise off limits to the World Bank. However, disagreements over the implementation of fiduciary, environmental and social, and security policies and procedures when challenges arise risk undermining the effectiveness of these partnerships.

In the face of heightened conflict or political crises, the World Bank has effectively rebalanced its financial support when doubts arise about government commitment to sound fiduciary management. This has allowed it to mitigate reputational risk associated with providing fungible budget support, which could be diverted. Trust funds have also been crucial in allowing the World Bank to operate in conflict situations.

The World Bank has ramped up its security coverage to support its operations in conflict-affected situations. It has both increased the number of security specialists and focused on developing the soft skills needed 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, a factor that has dissuaded engagement in conflict-affected areas. Also, the deployment of Corporate Security staff is based on the number of nonsecurity staff and the 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. The World Bank does not provide concrete guidance to heads of mission 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 foster an optimum approach.

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 an integration of conflict-related issues into country objectives. Also, few CPF 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 these programs and their contribution to higher-order outcomes. CPFs that have received additional FCV IDA allocations have a more coherent narrative about their transition. Yet their results frameworks only monitor the 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 is evaluated and evaluations in conflict-affected areas are not comprehensively assessing Bank performance. Many trust-funded activities, which are 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 IEG validation. Expanding the share of projects in conflict situations that are evaluated and validated and revising evaluation guidance on issues like Bank performance 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 the extent to which World Bank operations in conflict-affected areas may be exacerbating underlying grievances. Relatedly, although attention to GBV 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. CPFs 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 IEG to revisit its current $5 million threshold for validating ICRs.