This week, the U.S. Treasury Department issued a report to the appropriations committees of the House and Senate that provides clear recommendations for how the World Bank Group should adjust the budgets and mandates of its two independent accountability mechanisms (IAMs)—the Inspection Panel and Compliance Advisor Ombudsman (CAO). We welcome these recommendations, and urge Treasury as well as Congress to ensure they are implemented in full by the World Bank Board of Directors.
The report rightly points out that the independence of the IAMs is one of their greatest strengths, on which their credibility and effectiveness rely. It also points out that the disparate functions they possess—namely, monitoring, dispute resolution, and advisory services—should be seen as inter-related, and that they contribute to their overall effectiveness when they are integrated properly. Finally, the report provides a clear roadmap for the Bank’s Board as it looks to wrap up a reform process on the Panel and embark on a new review of the CAO.
With respect to the Inspection Panel specifically, the report articulates the position of Treasury on the three outstanding proposals for reform as such:
With regard to the CAO, the report also outlines preliminary views on how IFC and MIGA should approach the upcoming review, including:
In addition to advocating for these additional functions, the report also calls for an increase in the budgets of both the Inspection Panel and CAO for both practical reasons—given the Bank’s stated goal of increasing engagement in fragile states, and to fund new functions—as well as to demonstrate the Bank’s commitment to the accountability process generally.
As the World Bank’s largest shareholder, and one of the strongest advocates for transparency and accountability within the institution, the United States government should exercise its influence through its regular activities as a member of the Board of Directors to ensure these recommendations are adopted. As IDA19 negotiations move forward, Congress should also make clear that these recommendations are priorities for them as they prepare to consider a contribution to the replenishment.