IDA (the International Development Association), the World Bank’s concessional fund, was set up in 1960 to provide affordable finance to countries with the smallest economies, lowest per capita incomes, and lowest creditworthiness. The goal was to help those countries to grow faster and more equally and thereby sustainably to reduce poverty. IDA can fairly claim to have made a significant contribution to global poverty reduction over recent decades. And its choices are important, because it is the largest single source of international finance for economic and human development in the world’s poorest countries.

IDA is financed by donor contributions (effectively grants to the World Bank, though in principle, were IDA ever wound up, the remaining funds would go back to the donors), topped up more recently by repayments from borrowing countries of loans taken out long ago and borrowing against the equity IDA has built up over the decades. The first fund agreed in 1960 amounted to $900 million. It has subsequently been topped up 18 times, roughly every three years. Each replenishment brings not just more money but also adjustments to IDA’s policies and priorities.

Report by the Center for Global Development