IDA13




Three-Year or Four-Year Replenishment Cycle
    Results of Consultation with Donors




        International Development Association
                    January 2001

                 IDA13: Three-Year or Four-Year Replenishment Cycle

                              Results of Consultation with Donors


1.      In August 2000, IDA donors were sent a set of questions to solicit their views and
guidance on the possibility raised at the Lisbon meeting that IDA replenishments might
cover a four-year period, with a mid-term review after two years. For IDA13 this four-year
period would cover FY2003 through FY2006. Seventeen out of thirty eight donors
responded to the survey. This note summarizes donors' responses, grouped into four
categories: (1) donors' budgetary and legislative processes; (2) efficiency gains; (3) mid-
term review; and (4) resources mobilized.

2.      No issue was raised with respect to donors' budgetary and legislative
procedures. Most donors would have no difficulty of this type in moving to a four-year
cycle. For some, the budgetary and legislative processes are on a yearly cycle while for
others, there is flexibility in their internal processes to accommodate a change to a four-
year cycle.

3.      Donors recognized the efficiency gains of less frequent replenishments, in terms of
lower administrative workload, time savings, and less activity vis-à-vis their legislatures.
However, administrative efficiency was not considered to be the key consideration. Less
frequent replenishments would reduce the opportunity for donors to meet and review
IDA's results and re-orient IDA to new priorities. Some noted that given the increasing
number of potential new objectives (such as global public goods, AIDS) and IDA's lending
to Africa, the current shorter cycle might be preferable to allow donors the opportunity to
exchange views during replenishment meetings or to react in a timely way to correct
possible IDA operational and allocation issues.

4.      Several donors noted that the mid-term review provides such an opportunity to
review IDA's policies and priorities, discuss progress and provide guidance going forward.
Nonetheless, it was also noted that significant policy changes could not be easily adopted at
such reviews, as compared to replenishments. In this context, some donors questioned
whether it would be wise to wait for four years to review IDA's implementation and
recommend policy changes.

5.      Most donors took the view that the key consideration for changing the
replenishment cycle would be the likely effect on the level and stability of IDA
resources. It was emphasized that a trade-off between IDA resources and more efficient
processes for donors was not desirable. Some donors were unsure that a change to a longer
cycle would in practice be accompanied by a fully proportional increase in budgetary
allocations and hence in the volume of IDA replenishments; for these donors a change in
the replenishment cycle could carry the risk of a relatively lower volume of IDA resources
on a per annum basis.

Conclusion

6.      The balance of opinion seemed to be that retaining the three-year cycle in IDA13
was the preferred course at this time. Several noted, however, that there could be merit in
revisiting the issue later in the replenishment process.