The World Bank Group's Response to the Global Economic Crisis

PHASE 1
The World Bank Group’s Response
to the Global Economic CrisisThe World Bank Group
WORKING FOR A WORLD FREE
OF POVERTY
he World Bank Group consists of fi ve institutions—Tthe International Bank for Reconstruction and De-
velopment (IBRD), the International Finance Corporation
(IFC), the International Development Association (IDA),
the Multilateral Investment Guarantee Agency (MIGA),
and the International Centre for the Settlement of Invest-
ment Disputes (ICSID). Its mission is to fi ght poverty for
lasting results and to help people help themselves and
their environment by providing resources, sharing knowl-
edge, building capacity, and forging partnerships in the
public and private sectors.
The Independent Evaluation Group
IMPROVING DEVELOPMENT RESULTS
THROUGH EXCELLENCE IN EVALUATION
he Independent Evaluation Group (IEG) is an indepen-Tdent, three-part unit within the World Bank Group.
IEG-World Bank is charged with evaluating the activities
of the IBRD (The World Bank) and IDA, IEG-IFC focuses on
assessment of IFC’s work toward private sector develop-
ment, and IEG-MIGA evaluates the contributions of MIGA
guarantee projects and services. IEG reports directly to the
Bank’s Board of Directors through the Director-General,
Evaluation.
The goals of evaluation are to learn from experience, to
provide an objective basis for assessing the results of the
Bank Group’s work, and to provide accountability in the
achievement of its objectives. It also improves Bank Group
work by identifying and disseminating the lessons learned
from experience and by framing recommendations drawn
from evaluation fi ndings.The World Bank Group’s
Response to the
Global Economic Crisis
—PHASE 1—
2011
The World Bank
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T is volume, except for the “Management Response” and the “Chairperson’s Comments,” is a product of the staf of the
Independent Evaluation Group of the World Bank Group. T e f ndings, interpretations, and conclusions expressed in this
volume do not necessarily ref ect the views of the Executive Directors of T e World Bank and IFC or the governments they
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Cover photo: Child eating porridge from food bank, Lukula, Tanzania. Photo courtest of Gideon Mendel/Corbis.

ISBN: 978-0-8213-8665-1
eISBN: 978-0-8213-8666-8
DOI: 10.1596/978-0-8213-8665-1
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ii | Gender and DevelopmentTable of Contents
Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vi
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .viii
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ix
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x
Management Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xxi
Chairperson’s Comments: Committee on
Development Eff ectiveness (CODE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxix
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Evaluation Issues and Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. The Global Crisis and Its Impact on Developing Countries . . . . . . . . . . . . . . . . 8
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Globalization of the U.S. Financial Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Impact of the Crisis on Developing Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Social Impact of the Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Fiscal and Debt Dynamics: Before and After the Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Comparison with Previous Crises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3. The World Bank Group’s Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
World Bank Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
IFC Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
MIGA Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4. Assessment of the World Bank Group Response. . . . . . . . . . . . . . . . . . . . . . . . . 46
Assessment of World Bank Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Assessment of the IFC Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Assessment of MIGA’s Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
5. Lessons and Issues for the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Lessons from Past Crises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Emerging Lessons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Issues Going Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80
Appendix A: Evaluation Met