The Bank Group has a new mandate—to establish itself as a knowledge-oriented institution that provides a unique blend of knowledge and financial services in an increasingly competitive world.

IEG’s 2008 evaluation of the Bank’s use of knowledge showed a positive correlation between knowledge and better lending and higher efficiency in World Bank operations. The study found that sound knowledge work, particularly economic and sector work (ESW) and technical assistance, had a direct association with better loan design and effective lending.

Evaluative findings also suggest that the Bank Group needs to be more selective and focused in its knowledge services and to track the results of its knowledge and advisory work better. IEG’s recent evaluation of 9 knowledge-intensive programs supported by the Bank Group found that the institution was more effective when

• It worked on specific sectors rather than on broad topics
• Designed tasks to address specific client concerns
• Customized international best practice to local conditions
• Generated data to support policy making
• Formulated actionable recommendations that fit local administrative and political economy constraints.

In the same study, IEG also found that—regardless of the level of government that operated as counterpart (central or local)—client participation and good monitoring and evaluation systems were key to good results.

Additionally, for the Bank Group to provide premier knowledge services, there is a need for better incentives for staff to be active producers and users of knowledge. This was reiterated in IEG’s evaluation of the World Bank’s matrix system, which found challenges in access and utilization of knowledge generated inside and outside the Bank, and in giving knowledge work the same importance as lending, particularly in a flat budget environment.