Contents -- Foreword -- Acknowledgments -- Abbreviations and Acronyms -- Executive Summary -- Millennium Development Goals (MDGs) -- 1 Overview: Building Momentum toward the Millennium Development Goals -- 2 Spurring and Sustaining Economic Growth -- 3 Scaling Up Service Delivery -- 4 Realizing the Development Promise of Trade -- 5 Increasing Aid and Its Effectiveness -- 6 Strengthening and Sharpening Support from International Financial Institutions -- References -- Boxes -- Millennium Development Goals -- 1.1 A five-point agenda for accelerating progress toward the MDGs -- 2.1 Growth is central to sustained poverty reduction -- 2.2 South Asia shows that stronger growth and better service delivery are key to the MDGs -- 2.3 Do poverty traps account for Africa's underdevelopment? -- 2.4 A gush of oil rents and surge in public investment do not ensure sustained growth -- 2.5 Political commitment is central to breaking the conflict cycle -- 2.6 Better macroeconomic policies and stronger institutions are associated with longer growth accelerations -- 2.7 Challenges for fiscal policy in oil-producing Sub-Saharan countries -- 2.8 Fiscal transparency has improved in Africa, but much remains to be done -- 2.9 Strengthening expenditure monitoring under the enhanced HIPC Initiative -- 2.10 Comparing business regulations in two resource-dependent economies: Angola and Botswana -- 2.11 High returns to investment climate improvements in Uganda -- 2.12 How does governance affect per capita incomes in Africa, and vice versa? -- 2.13 The Economic Commission for Africa's governance indicators and agenda -- 3.1 Sub-Saharan Africa shows that fast progress is possible in closing the gender gap -- 3.2 Reducing child mortality in Mozambique -- 3.3 Improving sanitation in India's slums -- 3.4 Attracting doctors to rural areas in Thailand.

3.5 IMF programs and MDG progress -- 3.6 Scaling up service delivery in low-income countries under stress (LICUS) -- 3.7 Rewarding schools for MDG outcomes -- 4.1 The varying effects of the Agreement on Textiles and Clothing -- 4.2 Why has rapid export growth failed to significantly reduce poverty in Madagascar? -- 4.3 Many of the rents created by trade preferences accrue to importers -- 5.1 The U.S. Millennium Challenge Account-poised to deliver -- 5.2 Estimates of MDG financing needs vary widely, but all point to the need for a major increase -- 5.3 Addressing absorptive capacity in Ethiopia -- 5.4 Scaling up development efforts -- 5.5 Alignment and harmonization: country examples show a wide variety of approaches -- 5.6 Mozambique's performance assessment framework-for donors -- 5.7 Proposals for additional debt relief-moving beyond HIPC -- 6.1 Profile of the "Big 5" multilateral development banks -- 6.2 Independent evaluation of the World Bank's role in poverty reduction strategies -- 6.3 Grant financing in the African and Asian Development Funds and IDA -- 6.4 IDA's strategy in Sub-Saharan Africa -- 6.5 Cambodia's country strategies-coordinating efforts among multiple donors -- 6.6 Malawi's sectorwide-and multisectoral-approach to HIV/AIDS -- 6.7 Multilateral development banks' support to build Colombia's culture of evaluation -- 6.8 IDA13's Results Measurement System-comparing targets and results -- 6.9 Indicators introduced under IDA14's Results Measurement System -- 6.10 IMF activities in Sub-Saharan Africa -- 6.11 Recent evaluations by the IMF's Independent Evaluation Office -- 6.12 Key elements of the IMF's role in low-income countries -- Figures -- 1.1 Country focus and leadership are key to coherent and effective implementation of the MDG agenda -- 2.1 Growth prospects are promising, but wide regional disparities remain.

2.2 Most regions will reach the poverty MDG by 2015, but Sub-Saharan Africa is seriously off track -- 2.3 Sub-Saharan Africa has lagged behind other regions -- 2.4 And the gap in income levels is widening -- 2.5 Lower investment rates in Sub-Saharan Africa have been a source of low growth -- 2.6 Sub-Saharan Africa has suffered from many conflicts -- 2.7 Annual growth rates during accelerations are improving in Sub-Saharan Africa -- 2.8 There is scope for allocating more to priority sectors such as health -- 2.9 Sub-Saharan firms view taxes, finance, electricity, and corruption as particularly constraining -- 2.10 Sub-Saharan Africa lags other regions in the quality of the business environment -- 2.11 The cost of starting a business varies widely -- 2.12 A weak investment climate entails high costs -- 2.13 Business environment reforms need to be scaled up in Sub-Saharan Africa -- 2.14 Registering property is unduly time-consuming in Malawi -- 2.15 Financial depth is lowest among low-income Sub-Saharan countries -- 2.16 The cost of borrowing is higher in Sub-Saharan Africa -- 2.17 Weak access to infrastructure is a major constraint in Sub-Saharan Africa and South Asia -- 2.18 Infrastructure spending fails to meet needs, particularly in Sub-Saharan Africa -- 2.19 Private participation in infrastructure remains low in most Sub-Saharan countries, and has recently fallen -- 2.20 Participatory processes are improving in developing countries, but most rapidly in Africa -- Stronger performance on political representation -- weaker performance on public sector management and institutional effectiveness -- 3.1 Despite progress, the 2005 gender target will not be met -- 3.2 Several regions are off track to achieve to universal primary completion by 2015 -- 3.3 Despite progress on child mortality, all regions are off track.

3.4 Since 1990 the number of people living with HIV/AIDS has quadrupled -- 3.5 Progress is being made in water supply, especially in South Asia but sanitation progress is slower -- 3.6 Progress on health does not always benefit poor people -- 3.7 Progress on education is generally more equitable -- 3.8 Health service coverage increases with the number of providers -- 3.9 Provider presence is also associated with better health outcomes -- 3.10 Projected primary teacher needs are large in Sub-Saharan Africa -- 3.11 Projected primary teacher needs far exceed training capacity in many African countries -- 3.12 Low-income countries are spending more on health and education -- 3.13 Budget shares for health and education have increased in many regions -- 3.14 Seventy percent of bilateral education aid is reported to be technical assistance -- 3.15 Donor commitments can oscillate substantially -- 3.16 Total ODA for health and education is increasing -- 3.17 Higher spending on education and health do not always mean better outcomes -- 3.18 Leakage of funds can be high but is not inevitable -- 3.19 Absence rates can be very high, especially in health -- 4.1 LDC Exports: Less food and raw materials, more energy and apparel -- 4.2 Nontariff measures are more important in rich countries -- 4.3 Trade restrictiveness at home and abroad falls as countries become richer -- 4.4 Trade restrictiveness at home and abroad rises with poverty headcount -- 4.5 Agricultural protection is high in OECD countries, and border barriers account for most of it -- 4.6 OECD trade restrictiveness remains high for developing countries -- 4.7 A low ambition round vs. deep WTO reforms -- 4.8 WTO Market access commitments for services by mode of supply -- 4.9 Foreign direct investment and cross-border exchange account for most trade in services.

4.10 Distribution of ODA for trade-related activities and infrastructure by region and main category -- 4.11 Bank trade-related lending -- 5.1 ODA is rising but is well short of what is needed -- donors need to raise their post-Monterrey commitments and extend them beyond 2006 -- 5.2 Wide variation in donor effort -- 5.3 Debt relief and technical assistance dominate the increase in ODA -- 5.4 Dependence on aid varies by region and is highest in Sub-Saharan Africa -- 5.5 Sub-Saharan Africa's largest donors -- 5.6 Official flows are the main source of external finance for Sub-Saharan Africa, twice as large as FDI and nearly four times as large as remittances -- Projected income poverty in Ethiopia, 2003-15 (Headcount index) -- 5.7 Higher development assistance is increasingly supporting and catalyzing more spending in priority areas -- 5.8 In low-income countries donors allocate more aid to better performers -- more generous donors also tend to be more selective -- 5.9 Difficult partnership countries receive less aid than predicted by their policy/institutional quality and poverty levels -- 5.10 Aid fragmentation is high, especially in Sub-Saharan Africa -- 5.11 Progress on alignment, harmonization, and predictability of aid needs to be accelerated -- 6.1 Financial flows from the Big 5 multilateral development banks, IMF, and private sources -- Differences in the Big 5 client bases -- Average incomes of Big 5 client countries -- Small states in the Big 5 -- Borrower shares in Big 5 ownership -- Big 5 decentralization -- 6.2 Trends in lending and grant commitments by multilateral development banks -- 6.3 Policy and poverty selectivity of aid from multilateral development banks, 2003 -- 6.4 Big 5 multilateral development banks: sectoral distribution of lending, 1999-2004 -- 6.5 DFID Scorecard for multilateral development banks -- Tables.

2.1 Over the next 10 years growth is expected to rise and poverty fall around the world.