Beyond banking: Crisis risk finance and development insurance in IDA19

This paper reviews the evolution of the World Bank’s approach to crisis risk financing, focusing especially on the International Development Association (IDA) and its Crisis Response Window (CRW). The discussion paper acknowledges the significant progress made in recent years in this area of policy, but also argues that as IDA and its partners prepare for the 19th replenishment of IDA, they have an opportunity to make important changes that would deliver both better outcomes for the poorest living in high-risk contexts and better value for shareholders.

In particular, the authors examine how reform of the existing instruments could accelerate IDA’s proposed ‘pivot to prevention (when crisis risks can be mitigated) and preparedness (when they cannot)’. Reform would also significantly improve the effectiveness and efficiency of financing responses.