The World Bank sits at the heart of the present international aid architecture, and enjoys considerable confidence among the donor community.  However, there are a number of pressing reform issues on the table.  First, there are strong criticisms of the Bank’s own governance arrangements, particularly the method of choosing its President and the lack of effective developing country representation on the Board.  Second, the IBRD is losing its traditional MIC clients, who now have ready access to the capital markets.  Most of them are now repaying more than they borrow.  This reduces the Bank’s ability to cross-subsidise its operational costs and IDA activities from IBRD income, raising the question of whether its basic business model is still viable.  

The literature contains many reform proposals for the World Bank, including:

• Changes to the composition or voting weights within the Board, to reflect the growing importance of the emerging markets and to give more voice to borrower countries;
• Greater use of double-majority voting (of members and of shares) in the Board, which would force the G7 group to make more effort to build consensus with borrower countries;
• Measures to improve the quality of representation on the Board, including publication of transcripts and providing secretariats to development countries members to help them engage in policy debates;
• A transparent, merit-based leadership selection process;
• Combining the Bank’s field presence with the regional development banks;
• Changes to staff incentives to reduce disbursement pressures;
• Broadening the mandate, to permit the Bank to finance non-state actors;
• Stronger independent evaluation;
• New financing terms for borrowers, such as 10-year financing agreements, to increase predictability of aid flows.