Contact:
Jeremy Gaines
jgaines@cgdev.org
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Tracker Finds that Multilateral Development Bank Climate Reforms Advance, While Other Reforms Lag
Washington – Today, ahead of the World Bank-IMF Spring Meetings, the Center for Global Development released its 2024 MDB Reform Tracker, which analyzes the progress of the multilateral development banks including the World Bank in implementing reforms that will transform them into institutions that can meet 21st Century needs.
The 2024 tracker reveals that while the multilateral development banks (MDBs) have made significant strides in incorporating global challenges like climate change into their agendas, they have a long way to go on implementing other reforms needed to build bigger and better banks.
The analysis, led by Nancy Lee, director for sustainable development finance at CGD, tracked reform progress at seven of the largest MDBs on 28 reform agenda items grouped into five categories: making more efficient use of capital, adding to capital, expanding mandates to include global challenges, transforming engagement with countries, increasing mobilization of private finance.
Shareholding countries have called on the World Bank and other major MDBs to shift their focus to include climate change alongside poverty reduction and development and to take on more risk to expand their lending. A number of major reports commissioned by the G-20 and in other forums have laid out specific reforms for the MDBs to implement. The MDB Reform Tracker shows that these reports are gaining traction. Most of the MDBs examined have at least indicated their intention to pursue the reforms flagged in these reports. However, the reform implementation progress is very uneven across different components of the reform agenda and across institutions.
Key findings of the 2024 MDB Reform Tracker include:
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MDBs have made the most progress on updating their mandates to take into account climate and other global challenges, underscoring a collective and increasing recognition of the urgency and importance of addressing climate change within the financial sector. All seven MDBs assessed have either included global challenges in their mandates or are in the process of doing so.
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However, for most of the 28 items on the reform agenda, evidence in the majority of MDBs is weak of actual implementation of reforms.
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Implementation progress is limited in the categories of: making more efficient use of MDB capital, adding to capital, and transforming country engagement. Implementation is somewhat further along in the category for mobilization of private finance, but there is a lack of data to show major gains in actual mobilization performance.
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No single MDB can claim a monopoly on reform progress or excels in all the reform categories. However, individual institutions are leading the way for different reforms. That variation holds promise: what is possible for one institution should be possible for the others.
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Different MDBs have taken the lead on different parts of the reform agenda: the ADB and the IDB Group have done the most work to maximize the efficient use of their capital, while the EBRD has had the most success in expanding the capital available to it. The EBRD and IDB Group have gone the furthest on reforms to mobilize more private finance, while the AfDB is in the lead on transforming how it engages with its client countries. And four different institutions—the ADB, EBRD, IDB Group, and World Bank Group—have taken major steps to expand their institutional mandates.
The MDB Reform Tracker highlights the need for continued focus and action across all major MDBs to address these lagging areas.The researchers note that urgent and sustained efforts are needed to translate intentions into tangible outcomes across all reform categories.
"We have spent two years debating and discussing multilateral development bank reform. 2024 has to be the year for action,” said Nancy Lee, the lead researcher for the 2024 MDB Reform Tracker. “This is a challenging reform agenda. If momentum lags, inertia could set in at a time when we can’t afford an underperforming MDB system.”
The Center for Global Development updates the tracker regularly. You can find the full MDB Reform Tracker at https://www.cgdev.org/page/mdb-reform-tracker.
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