Document 3:4 (2021-2022) / Published Investigation of Norway’s support to the World Bank’s trust funds

The Ministry of Foreign Affairs does not have sufficient documentation that the World Bank’s trust funds are an efficient, effective way of providing aid.

In summary

  • Development aid channelled through trust funds does not necessarily contribute to the attainment of Norway’s development policy goals.
  • Several funds cannot provide documentation showing that the aid reaches the people it is intended for.
  • Significant costs are incurred related to administration and operation. It is uncertain whether the aid is cost-effective.
  • The Ministry of Foreign Affairs does not have an overarching strategy.

Main criticisms

The Ministry of Foreign Affairs and Norad have not assessed or calculated the cost of using trust funds as a channel. There are few examples that they have verified the costs.

The Ministry of Foreign Affairs has continued to support the climate change investment fund Scaling up Renewable Energy Programme (SREP) despite slow progress and few tangible results.

It is also reprehensible that the Ministry of Foreign Affairs

  • does not have a basis for decision-making that weighs up the priorities between core support and earmarked support
  • does not have an overarching strategy for Norway’s support to the World Bank in general and trust funds in particular
  • has not equipped the embassies to be able to monitor the multilateral component of Norway’s development aid – which constitutes an ever-increasing proportion of Norway’s total aid

Conclusions

Recommendations to the Ministry of Foreign Affairs

We recommend that the Ministry of Foreign Affairs

  • take steps to ensure that Norwegian-supported funds are better able to demonstrate results for end users in the recipient countries
  • monitor costs in funds more closely and develop a better knowledge base in order to know whether the support is cost-effective
  • ensure compliance with the white paper Report no. 27 to the Storting (2018–2019) Norway’s role and interests in multilateral cooperation (insert link) by considering giving more of the support to the World Bank as core support

We also recommend that the Ministry of Foreign Affairs

  • develop a more long-term, coordinated strategy for Norway’s support to the World Bank’s trust funds
  • equip the embassies to be better able to monitor the multilateral component of Norway’s development aid
  • ensure that the Storting receives a more balanced, comprehensive presentation of the results achieved and the actual costs of development aid provided through trust funds

About the investigation

The Storting has adopted clear goals for Norway’s development policy, such as that it shall help reduce world poverty. The Ministry of Foreign Affairs and Norad have been tasked with working to ensure the goals are attained.

Norway is donating a growing proportion of its development aid through multilateral actors and their funds. In 2020, Norway donated more than NOK 5 billion to the World Bank, about NOK 4 billion of which was channelled through trust funds. We have investigated whether the work done by the Ministry of Foreign Affairs and Norad ensures that this support contributes to the efficient and effective attainment of Norway’s development policy goals. We have largely focused on the period from 2018 to 2020.

Kategorier: Foreign affairs