The World Bank pushes for more poverty-targeting in most of its loan conditions on social protection even whilst acknowledging the downsides to this means of selecting beneficiaries, a new analysis has found.
Eurodad, the European network on debt and development, finds that in 2017 alone, the World Bank attached 434 conditions to loans to 46 countries, and 18 of these covered social protection spending. Two-thirds of these social protection conditions required loan recipient countries to increase the poverty-targeting of schemes, Eurodad’s briefing highlights, in a bid to ensure only those in poverty receive them.
Two countries with poverty-targeted schemes that were asked to enhance poverty-targeting, Guatemala and Rwanda, “were among the least effective in reaching the poor [with social protection schemes] according to a 2019 survey,” Eurodad says. This highlights the recently-published work carried out by Development Pathways with the support of the Church of Sweden, which looked at the effectiveness of Mi Bono Seguro and Vision 2020 Umurenge among others.
The briefing warns: “In its loan to Guatemala, the World Bank acknowledged [Mi Bono Seguro‘s] exclusion errors and lower benefit spending because of the programme’s ‘lack of resources’… Rather than questioning the methodology and approach which is the root cause for excluding many beneficiaries,” Eurodad says, “the World Bank continues its plea for more targeting”. Eurodad, a network of 46 civil society organisations, urges a re-think as it signals that loan conditions will continue to increase.
Development Pathways welcomes Eurodad’s analysis as providing further evidence on the extent to which the World Bank promotes a stance that flies in the face of findings on the failure of poverty-targeting. Our work, referenced by Eurodad, underlines that poverty-targeted schemes in almost every case fail to reach half of the people eligible for support – reducing their impact and undermining social cohesion. We would not advise further targeting in these cases, but a review of the approach.
Eurodad also finds that in 2017 the World Bank also attached a raft of other conditions that go beyond economic management and relate to social development, including 70 conditions on resource management, 28 on urban and rural development and 19 on gender and human development.
The briefing adds: “World Bank lending will be scaled up in the coming years due to the capital increase approved last year. Loan conditions will therefore become more relevant for borrower countries.”
For a further reaction to our work, access a recent blog by Nicholas Freeland, here.