Beyond the Numbers: Why the World Needs a More Ambitious MDB Response to COVID-19

A recent CGD paper and the World Bank’s response  focused on precisely how much financial support the Bank is likely to provide this year to low- and middle-income countries (LMICs) and whether this would match with targets the institution set for itself at the start of the COVID-19 pandemic. The back and forth on numbers risks obscuring a larger issue: The World Bank, and other multilateral development banks (MDBs) for that matter, are unlikely to pull out the stops in their response to this once in two generations crisis unless they get clear guidance from their major shareholders to do just that. The evidence suggests the rich country shareholders on whom the Bank depends for financial support are not sending this message. Indeed, some have signaled quite the opposite. US Treasury Secretary Mnuchin was most explicit in calling upon the World Bank to “manage financial resources judiciously and transparently […] so as not to burden shareholders with premature calls for new financing.” Other major shareholders conveyed the same message in private.