government budgetary allocations in administrative areas and the area-based activities of other donors into account in determining its own subnational resource allocations.<sup>21</sup>

# **4. Results**

### **4.1 Correlation results**

The analysis of the geographical allocations involved in World Bank investment projects in 58 countries shows that, in 72 percent of the cases, the presence of World Bank–supported activities is positively correlated with the presence of bottom 40 populations. This is assessed by correlating the distribution of project funds at one administrative level below the national level with the distribution of the national bottom 40 population across the same subnational administrative levels.<sup>22</sup> As shown in table 1, 42 countries present a positive correlation. In 20 of these countries (34 percent of the total), the correlation is at least 0.5, while the average is 0.26.

## **Table 1: Subnational Allocations, by Country, Correlation Coefficients between the Share of World Bank Project Funding and the Bottom 40**

|_Correlation_|_Countries_|
|---|---|
|0.5 to 1.0|Armenia, Bangladesh, Bolivia, Bosnia and Herzegovina, Brazil, Cabo Verde, Chile, El<br>Salvador, Ethiopia, India, Indonesia, Kyrgyz Republic, Lesotho, Madagascar, Mauritania,<br>Nepal,Tajikistan,Timor-Leste,Uruguay,Republic of Yemen|
|0 to 0.5|Afghanistan, Angola, Bhutan, Burkina Faso, Cameroon, Chad, Ecuador, Guatemala,<br>Haiti, Iraq, Kenya, Lao People’s Democratic Republic, Mali, Niger, Peru, Philippines,<br>Republic of Congo,Russian Federation,Sri Lanka,Uganda,Ukraine,Vietnam|
|−0.5 to 0|Belarus, Burundi, Democratic Republic of Congo, Georgia, Ghana, Guinea-Bissau,<br>Mexico,Mozambique,Nigeria,Senegal,South Africa,Tanzania|
|−1.0 to −0.5|Guinea,Rwanda,Sierra Leone,Zambia|

_Source:_ Estimates based on Global Monitoring Database (internal database), Poverty and Equity Global Practice, World Bank, Washington, DC; World Bank Geocoded Research Release (database), AidData, College of William and Mary, Williamsburg, VA, http://aiddata.org/data/world-bank-geocoded-research-release-level-1-v1-4-2.

<mark>However, table 1 also shows that World Bank allocations in 16 countries are negatively correlated with the bottom 40. This finding raises questions about the allocations involved in investment projects in these countries that do not seem to target or reach the bottom 40. Some of these results are explained by substantial allocations of project resources to capital cities, whereas most of the bottom 40 live elsewhere. Closer inspection suggests that this is the case mostly in African countries, particularly the Democratic Republic of Congo, Ghana, Guinea, Guinea-Bissau, Mozambique, Senegal, Sierra Leone, Tanzania, and Zambia. In the remaining countries, a negative correlation seems not to stem from the overabsorption of resources by capital cities, but from the higher share of resources going, on average,</mark> to areas with lower shares of national bottom 40 populations.

<mark>To illustrate, map 1 displays the geographical distribution of the bottom 40 and World Bank project funding across administrative areas in the Lao People’s Democratic Republic. This allows a simple visualization of the disproportion in the shares of World Bank funding relative to the shares of the bottom 40 in these areas. Although the correlation between the locations of the bottom 40 and of World Bank</mark>

> 21 See appendix A for definitions of the variables and data sources.

> 22 In this analysis, an equal split of total project commitments is assumed across the subnational areas in which projects are active. The correlations in most countries tend to be somewhat higher if a population-weighed split of resources across subnational areas is applied (see appendix B).

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