Review of post-crisis Multi-Donor Trust Funds

Review of post-crisis Multi-Donor Trust Funds

How effective are Multi-Donor Trust Funds in addressing post-crisis situations?

This paper sets out the main findings of a joint review of MDTF performance in post-crisis situations and seeks to identify what arrangements work best. It concludes that MDTFs have been a useful instrument for joint action in post-crisis situations and that donors should consider strengthening them. It outlines best practices and lessons learned, and makes a number of recommendations for strengthening MDF performance.

The authors focus on a number of cross-cutting issues, including governing structures, harmonisation and coordination, time frames for establishment, the relationship between the UN system and the World Bank, the impact of donor policies and the role of implementing agencies.

The reports finds that:

  • MDTFs have been important instruments for resource mobilisation, policy dialogue, risk and information management
  • they generate “positive externalities” that other instruments do not
  • there is an emerging understanding regarding "best practice" in MDTF design and "lessons learned" regarding how to improve MDTF performance
  • MDTFs have a comparative advantage in rebuilding core public administration functions and funding capacity development in the public sector
  • administrative costs of MDTFs compare favorably to management costs of non-pooled programming
  • if well-managed, MDTFs can contribute to reducing the chance of a volatile situation reverting to open conflict

The report's general recommends include:

  • stakeholders should consider making MDTFs part of a Post-Conflict Needs Assessment Action Plan
  • MDTF designs should be as simple as possible, where feasible using a single-fund
  • MDTF secretariats need to be staffed up quickly to ensure that the start-up phase runs smoothly
  • because they operate in high-risk, high-cost environments, MDTFs require flexible and adequate funding
  • specific recommendations are also made for donors, national authorities, the World Bank, the UN and MDTF operations

This report was commissioned by the World Bank, Norwegian Ministry of Foreign Affairs and Norwegian Agency for Development Cooperation (Norad), in cooperation with Canadian International Development Agency (CIDA), Netherlands Ministry of Foreign Affairs and UK Department for International Development (DFID).

  1. How good is this research?

    Assessing the quality of research can be a tricky business. This blog from our editor offers some tools and tips.