Engaging with Fragile States : An IEG Review of World Bank Support to Low-Income Countries under Stress

Home to almost 500 million people, roughly half of whom earn less than a dollar a day, fragile states, until recently known in the World Bank as Low-Income Countries Under Stress (LICUS), have attracted increasing attention. The Bank identified 25 such countries in fiscal 2005 based on their income and Country Policy and Institutional Assessment (CPIA) rating. These 25 countries have a number of similarities: their infant mortality rate is a third higher than that of other low-income countries, life expectancy is 12 years lower, and their maternal mortality rate is about 20 percent higher. There are also important differences among LICUS. Some, Angola and Cambodia among them, grew at around 4 percent per annum during 1995-2003; others, such as the Solomon Islands, the Democratic Republic of Congo, and Guinea-Bissau, had negative growth rates of similar magnitude. Some, such as Angola, the Democratic Republic of Congo, Nigeria, and Papua New Guinea, have abundant natural resources, but others, such as Burundi and Haiti, are resource poor. This paper includes the following headings: effectiveness of the Bank's LICUS approach; operational utility of the LICUS identification; classification, and aid-allocation system; the Bank's internal support for LICUS Work; and conclusions, lessons, and recommendations.