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World Bank P4R Financing

Strengthening institutions and building capacity
On January 24, 2012 the Executive Directors of The World Bank approved their newest financing instrument called the Program-for-Results. The World Bank P4R is an innovative financing instrument for client countries that links the disbursement of funds directly to the delivery of defined results.

The innovation of the P4R instrument helps the Bank's client countries improve, design, and implement their developmental programs that are targeted to achieve lasting results in the strengthening of institutions and building capacity. The P4R instrument provides a platform to help strengthen and build capacity in collaboration with government, development partners, and other stakeholders in larger global and country programs.

Innovation 1:
Focuses on Results
Results are at the center of the P4R Instrument and taken to a new level as disbursements are linked to tangible and verifiable achievements. The P4R innovation utilizes disbursement-linked indicators (DLIs) that play a critical role in the Instrumentís operations. Thus, providing the participating government with economic incentives to achieve key program milestones and improve performance.

Innovation 2:
Builds Capacity & Strengthens Institutions
P4R focuses on behavioral and institutional changes that are required to achieve results and manage risks. Capacity building ranges from direct technical assistance to training in specific needs or DLIs to strengthen performance. Capacity building activities will be informed by assessments of the programís technical, fiduciary, and environmental as well as social systems.

Innovation 3:
Leverages Bank Funds
In total the World Bank only finances a small percentage of the public expenditures of developing countries. In addition to providing a small percentage of the overall funding for a larger program the Bank will be able to apply its technical expertise, capacity building support, fiduciary, environmental and anticorruption oversight as well as access to Information Policy to a larger range of government spending.

Innovation 4:
Assurance that Financing is Used Appropriately
The P4R terms allows the Bank to assess the programís fiduciary systems which includes the capacity to manage fraud and corruption. Under the P4R Instrument the Bank excludes all contracts that are above a certain threshold and/or value. Under the P4R Instrument the Bank has the right to investigate all allegations of fraud and corruption in the entire program and not only those related to Bank financing. The Bankís borrowers are also obliged to follow new Anticorruption Guidelines.

Copyright 2010-2012 by Robert Louis Short. All rights reserved.
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