determining allocations for most IDA‐eligible countries.<sup>8</sup> The IDA donors, largely working in concert with Bank management and staff, determine the content of the CPIA and its weight in the allocation formula. Morrison (2013) finds that during the Cold War IDA‐eligible countries received more IDA commitments when they held seats on the World Bank Executive Board. However, he reports that this effect is absent after 1989, when IDA’s performance‐based allocation system became more formal and transparent, reducing any discretion in the process. He found no support for the hypothesis that the CPIA ratings at the core of this allocation system are influenced by the Bank’s shareholders.

Not all donors, however, are equally supportive of current IDA allocation policies. For example, some donor countries have called for increasing the weight accorded to need in the allocation formula, so that countries emerging from conflict may benefit from increased funding (see Manning 2014).<sup>9</sup> Such donors might reduce their contributions to IDA and divert them to supporting trust funds that complement IDA funding. While donors could also shift these funds to their respective bilateral aid budgets, they might want some share of it implemented by the Bank. The IEG (2011a: 6f) evaluation suggests that donors appreciate the World Bank as a trustee because of its capacity, expertise and strong working relations with governments. If trust fund aid is used in this way to complement the (cross‐country) allocation of the IDA funds, then trust funds should be more weakly related than IDA funds to the quality of policies in IDA‐eligible recipient countries – and the relationship could even be negative.

Trust funds are often used to respond to natural disasters and other humanitarian crises, and to fund environmental and other projects with significant spillovers across national borders that do not always conform well to IDA’s country‐based approach. To the extent humanitarian and cross‐ border problems are not correlated with per capita income and policy quality, allocations of trust funds responding to these problems are likely to be less poverty‐ and policy‐selective than IDA allocations. For several reasons, therefore, trust funds can potentially undermine IDA’s “performance‐based allocation” (PBA) system intended (1) to direct more aid to countries where its development impact is likely to be greater, and (2) to create incentives for policy improvements in recipient countries.

Our data on disbursements by World Bank trust funds for the 2002‐2012 period allow us to study whether and how trust fund aid is allocated differently from bilateral and multilateral aid, particularly with respect to policy‐ and poverty‐selectivity. We analyze trust fund disbursements using linear regression models that account for time‐invariant recipient characteristics and common

> 8 The CPIA measures numerous aspects of policies and institutions, grouped into four “clusters” or broad policy areas: (macro)economic management, structural policies, equity and social inclusion, and public sector management and institutions. A detailed description can be found at http://siteresources.worldbank.org/PROJECTS/Resources/40940‐ 1244163232994/6180403‐1372096800800/CPIAcriteria2012.pdf.

> 9 Donor countries can and, surprisingly, do unilaterally increase their IDA contributions beyond what is seen as their fair share (Manning 2014). These additional contributions do not increase the formal voting power of the donor, although higher voluntary contributions might function as an informal leverage effect for their preferences. It could be that these additional contributions are popular domestically (Milner 2006). For example, the United Kingdom committed more than the USA to IDA15 and IDA17 replenishments USA (Manning 2014).

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