International organizations do not always live up to the expectations and mandates of their member countries. One of the best examples of this gap is the environmental performance of the multilateral development banks, which are tasked with allocating and managing approximately half of all development assistance worldwide. In the 1980s and 1990s, the multilateral development banks came under severe criticism for financing projects that caused extensive deforestation, polluted large urban areas, and displaced millions of people. In response to these failures, member countries established or str ... More

International organizations do not always live up to the expectations and mandates of their member countries. One of the best examples of this gap is the environmental performance of the multilateral development banks, which are tasked with allocating and managing approximately half of all development assistance worldwide. In the 1980s and 1990s, the multilateral development banks came under severe criticism for financing projects that caused extensive deforestation, polluted large urban areas, and displaced millions of people. In response to these failures, member countries established or strengthened administrative procedures, citizen complaint mechanisms, project evaluation, and strategic planning processes. These reforms were intended to close the gap between the mandates and performance of the multilateral development banks by shaping the way projects are approved. This book provides a systematic examination of whether these efforts have succeeded in aligning allocation decisions with performance. It demonstrates that reforms undertaken to increase the amount of information about performance have caused the multilateral development banks to give aid more effectively by promoting selectivity—moving toward projects with a record of success and away from projects with a record of failure for individual countries. This outcome happens when information about performance makes less successful projects harder to approve or more successful projects easier to approve. This argument is substantiated with an extensive analysis of evaluations across four multilateral development banks and two decades, together with in-depth case studies and dozens of interviews. Member countries have a number of mechanisms that allow them to manage international organizations for results.