Addressing Country-Level Fiscal and Financial Sector Vulnerabilities - Evaluation of the World Bank Group’s Contributions - Report to the Board from the Committee on Development Effectiveness (June 18, 2021)

Jul 19, 2026

Evaluation summary presented to the Board Committee on Development Effectiveness on June 18, 2021, covering an Independent Evaluation Group assessment titled “Addressing Country-Level Fiscal and Financial Sector Vulnerabilities” and related World Bank Group management comments. Members highlight timely discussion after the COVID-19 crisis, quality and rigor of case studies, and the relevance of diagnostic work grounded in the Financial Sector Assessment Program. The evaluation finds overall relevance and effectiveness, while raising concerns about compound shocks, assessment timeliness for smaller economies, and debt sustainability optimism. Recommendations emphasize strengthening macro fiscal monitoring and improving social protection delivery.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages1

Reading Time3 min

Meeting Overview

Cluster of Interrelated Evaluations

Key Findings and Committee Remarks

Constraints and Areas of Concern

Follow-up Questions and Recommendations

Public Disclosure Authorized Public Disclosure Authorized Addressing Country-Level Fiscal and Financial Sector Vulnerabilities An Evaluation of the World Bank Group’s Contributions Report to the Board from the Committee on Development Effectiveness ∗ Meeting of June 18, 2021 The Committee on Development Effectiveness (CODE) (“the Committee”) met to consider the Independent Evaluation Group (IEG) evaluation entitled Addressing Country-Level Fiscal and Financial Sector Vulnerabilities. An Evaluation of the World Bank Group’s Contributions (CODE2021-0025) and the Draft World Bank Group’s Management Comments (CODE2021-0032/1) . The Committee welcomed the evaluation, remarking on the timeliness of the discussion in the context of efforts to build back better after COVID-19 related crisis. They noted that this evaluation is oneof a cluster of four undertaken on interrelated macroeconomic and macro financial issues: Public Financial and Debt Management (PFDM) discussed by CODE in February, and the upcoming evaluations on Domestic Revenue mobilization (DRM) and the Sustainable Development Finance Policy (SDFP) . Members welcomed the quality of the report and the rigor with which the case studies were conducted. Members appreciated Management’s recognition that lessons learned would inform the World Bank Group’s (WBG) initiatives to support client countries’ efforts to face adverse fiscal and financial risk and build resilience to external shocks. Members were pleased to learn that the WBG’s work on addressing fiscal and financial sector vulnerabilities in client countries is both relevant and effective; that WBG’s diagnostic work on financial sector was comprehensive and credible, reflecting the rigor of the Financial Sector Assessment Program (FSAP); and that countries that received and acted on Bank Group support to address fiscal and financial sector vulnerabilities were generally better prepared to respond to a major shock. At the same time, members expressed concern about IEG’s findings that the WBG needs to consider fiscal and financial compound shocks more systematically as part of its macro fiscal monitoring; that the WBG’s ability to produce timely and comprehensive assessments ofthe financial sectors of smaller economies is constrained by the division of labor with the IMF on FSAP work; and that Debt Sustainability Analysis (DSA) was sometimes overly optimistic giving a misleading impression of vulnerabilities or underestimating fiscal risks. Members asked IEG about views on how to overcome these challenges and encouraged Management to address challenges to strengthen social protection delivery systems and social safety net programs. ∗ This report is not an approved record.

FAQs

What is the main purpose of the June 18, 2021 committee meeting?

To consider an IEG evaluation on addressing country-level fiscal and financial sector vulnerabilities and to review related World Bank Group management comments.

What does the committee consider strengths in the evaluation work?

Members value the report’s quality and rigor, including comprehensive, credible diagnostic financial sector work and evidence that supported countries were generally better prepared for shocks.

What concerns did committee members raise about the evaluation’s findings?

They expressed concern that fiscal and financial compound shocks were not addressed systematically enough, that timely assessments for smaller economies are constrained by division of labor with the IMF, and that debt sustainability analysis could be overly optimistic and understate risks.

Jul 19, 2026

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