State Your Business! - An Evaluation of World Bank Group Support to the Reform of State-Owned Enterprises, FY08-18 - Report to the Board from the Committee on Development Effectiveness - Meeting of October 26, 2020

Jul 19, 2026

Report to the Board from the Committee on Development Effectiveness summarizes the October 26, 2020 review of an IEG evaluation on World Bank Group support to reform state-owned enterprises for FY08-18, alongside management’s draft response. It highlights SOEs’ potential roles in development and emerging economies, the importance of governance and anti-corruption in performance outcomes, and challenges linked to mixed mandates and political importance. Key recommendations emphasize regulatory reform, financial sustainability and PFM attention, and sequencing driven by country context.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages2

Reading Time5 min

AccessFree to download

Meeting overview

IEG evaluation and management response

Key findings on SOE roles and reform outcomes

Development impact and service delivery

Governance, corruption, and competitive conditions

Policy and implementation recommendations

Regulatory and PFM considerations

Private financing, sequencing, and the Cascade approach

Public Disclosure Authorized Public Disclosure Authorized State Your Business! An Evaluation of World Bank Group Support to the Reform of State-Owned Enterprises, FY08-18 and the Draft Management Response Report to the Board from the Committee on Development Effectiveness ∗ Meeting of October 26, 2020 The Committee on Development Effectiveness (CODE) met to consider the report entitled State Your Business! An Evaluation of World Bank Group Support to the Reform of State-Owned Enterprises, FY08-18 (CODE 2020-0048) and the Draft Management Response (CODE2020-0053) . The Committee welcomed IEG’s first systematic assessment ofthe WBG’s support for the reform of State-Owned Enterprises (SOEs) for the period 2008-2018 and commended it for the quality and learning orientation of the Report. Members were pleased to learn that Management broadly agreed with IEG’s findings and that it was already working in the direction of the Report’s recommendations. Members welcomed the Report’s findings that SOEs can play a major role in both developing and emerging economies to achieve economic, social, and political objectives, including to promote growth; deliver and extend access to services; fill market gaps; develop key sectors or regions; job creation; and to address issues of heightened national priority or security. They noted the use of SOEs by governments and donors, including the WBG, to channel subsidies or benefits, such as deferred payment of utility bills or subsidized credit to enterprises in response to the COVID-19 crisis. Members highlighted the importance of SOE reforms to help client countries achieve the Sustainable Development Goals (SDGs) and recognized that even in normal times, SOEs’ mixed institutional mandates and political importance often pose performance, financial and governance challenges. They acknowledged the evaluation’s findings that reforms have higher rates of successful outcomes in countries with better control of corruption and competitive conditions at the sector and enterprise level and that positive experiences from collaboration across WBG institutions is a key to mobilizing private financing and capabilities consistent with the MFD/Cascade. Members underscored the importance of corporate governance and corruption, especially in challenging market environments noting that this should not inadvertently lead to a movement away from these challenging environments, particularly in IDA and FCS countries. They noted that SOE reform is broader than ownership and privatization and underscored the importance of regulatory reforms to promote competition and remove potential bottlenecks for private players. Members noted that financial sustainability issues in many SOEs and their impact on general government budget are often a challenge in client countries and encouraged Management to continue paying close attention to PFM reforms. The Committee recognized that SOE reforms could be used to help client countries overcome public sector and MDBs limited financing capacity and that by promoting, when relevant, a more robust and commercially organized governance of SOEs, including with the use of de-risking instruments, the WBG could set clients on a trajectory from sovereign-guaranteed public sector financing to commercial financing. Members highlighted that mobilizing private financing for SOE reform can have positive externalities, notably in terms of transparency and underscored that the sequencing of reforms must be driven by country context, making policy analysis an essential part of the assessment. They recognized that ∗ This report is not an approved record. SOEs can impose barriers to private participation in sectors where their dominant presence enables anticompetitive behavior. They noted that SOEs represent a fertile ground for the implementation of the Cascade approach and for the Group to strengthen its collaboration efforts and encouraged Management to continue assisting client c

FAQs

What evaluation and management response were reviewed by the Committee on Development Effectiveness?

The Committee reviewed an IEG evaluation titled “State Your Business! An Evaluation of World Bank Group Support to the Reform of State-Owned Enterprises, FY08-18” and the related draft management response (CODE2020-0053).

Why are SOE reforms considered important, according to the Committee’s discussion?

SOE reforms are viewed as important for helping client countries achieve development objectives and the SDGs. The discussion also emphasizes how governance and corruption issues affect performance, financial results, and broader governance challenges.

What factors influence whether SOE reforms lead to successful outcomes?

The Committee notes higher rates of successful outcomes where corruption control and competitive conditions are stronger at both the sector and enterprise level. It also highlights that reform sequencing must be driven by country context and supported by policy analysis.

Jul 19, 2026

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