A World Bank strategy with no clear direction

The World Bank is Norway's main aid channel. The strategy put forward today points in the right direction. It's not enough.

It describes a changing world: the United States is pulling back from parts of international cooperation, aid budgets are shrinking and pressure on priorities such as climate, gender equality and debt management is increasing. It also acknowledges something fundamental: that aid has become too fragmented, and that core support produces better results than earmarking.

But describing the problems is not the same as solving them.

The list of priorities in the strategy is extensive: climate, nature, energy, gender equality, human rights, anti-corruption, private sector, debt, jobs, Ukraine, Palestine, vulnerable states, tax revenues, KI — and more. It's all important. But when everything is important, nothing becomes a priority.

This is not just a rhetorical problem, but a governance issue. The strategy lacks mechanisms that make prioritization possible in practice.

The government further announces that it will reduce the number of funds Norway supports in the World Bank. Yet neither concrete goals, timelines nor ceilings are set. Fragmentation is not primarily a technical issue, but a political choice. Establishing new funds is easier than liquidating old ones — it provides visibility, control and political gains.

A better solution

At the same time, we know what works better.

The World Bank's Fund for the Poorest Countries, IDA, is one of the most effective aid instruments we have.

For every penny Norway gives, around NOK 3.5 in funding is mobilised. Administrative costs are on 2.3 percent It's lower than most we can compare it to. And the funds go to the 78 poorest countries in the world, most in sub-Saharan Africa.

Equally important is who is in charge. In IDA, it is the beneficiary countries themselves that prioritise the use of the funds within national plans. It provides real ownership and is in line with stated goals of shifting power to the global south. IDA is one of the few instruments that actually does this in practice.

Nevertheless, Norway has over time downplayed nuclear support. In the 1960s, more than 20 percent of Norwegian aid went to IDA. In 2024, according to the government, it was only 2.5 percent. Instead, Norway has built up an increasingly complex landscape of earmarked funds. Et Long-Term Memo on Norwegian Support to the World Bank documented in 2025 that Norway supported over 60 funds in the World Bank alone. Many of these have had limited effect.

The consequences of the number of funds are not just fragmentation, but more reporting, more requirements, parallel management structures, high costs and less room for action for recipient countries. This gives more control for the donors, but less ownership for the recipient countries.

Some funds have had an important function in testing approaches that have subsequently become part of the World Bank's core business.

Norway's support for the energy programme ESMAP, for example, helped build up the bank's capacity for renewable energy. However, once a theme is fully integrated into the IDA, it is no longer good policy to maintain own funds. Then it's not innovation -- it's inertia.

The strategy partly attempts to rectify this. For the period 2026—2028, the government has increased support for IDA by 50 percent compared to the previous three-year period, and the strategy states that until 2030, the government will “work for further increases”. It's very good. But 50 percent growth from a historic low is not showing ambition -- it's a partial correction.

At the same time, NOK 600 million of the IDA increase will be earmarked for food security. That undermines the point: The government says it will strengthen core support -- and keeps telling IDA what to prioritize.

We say we trust IDA. But we don't give the World Bank the freedom to prioritise itself.

Unclear priorities weaken strategy

The strategy also avoids an important question of principle: What should the World Bank primarily be? In 2024, 58 percent of World Bank aid went to Ukraine. The aid is understandable from security policy considerations, but is something other than long-term poverty reduction. The strategy attempts to combine these considerations without clearly clarifying priorities.

The government can't have both without being honest about it. Should the World Bank be used primarily to reduce poverty in the poorest countries, or to address global challenges such as security policy, pandemic and emissions reductions?

The World Bank cannot be both a narrow instrument for poverty reduction and a broad tool for global crises without clear choices being made about what should weigh heaviest.

Four steps needed

If the government is serious about the strategy, it must be followed up with concrete and verifiable choices:

1. Set a clear goal for IDA: Commit Norway to ensure that core aid will account for at least 15 percent of the total aid budget by 2030 — a force against poverty and inequality with national roots.
2. Tallfest the clean-up in funds: Set a concrete ceiling on the number of funds Norway will support, and publish an annual overview of which funds are liquidated. Without targets and reporting, fragmentation becomes difficult to reduce.
3. Establish a “gatekeeper”: Create a central function of management that must approve all new agreements with the World Bank. Today, embassies and subject departments enter into agreements independently of each other and contrary to the desire for a greater share of core support - that is the very source of the fragmentation.
4. Make IDA the default choice: Any proposal for a new fund or earmarked support must first answer one question: What added value does this provide beyond what IDA already delivers?

Global aid is under pressure. It is not just a temporary trend, but a structural shift in how international cooperation is financed and prioritized.

In such a situation, the need for clear priorities becomes all the greater. When resources are more limited, it is not sufficient to continue to embrace broadly — real choices must be made.

This is the essence of the government project Turning Point, which will result in a parliamentary announcement in spring 2027. The Minister of Development has himself raised the need to rethink the direction and priorities of aid policy. The World Bank strategy is an occasion to put it into practice.

The question is whether the will exists to make the choices that actually distinguish between prioritization and continuation of the status quo.

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