“Digital transformation” has become an increasingly central pillar of the international development landscape. “Reaping the benefits of digitalization” is seen as a developmental imperative, and new technologies are widely hailed to provide transformative opportunities. For multilateral development banks (MDBs) in particular, digitalization has become a strategic priority, and these institutions are financing a rapidly growing number of projects with digital components. Although digital technologies can be transformative, whether and under what conditions such transformations enhance economic and social well-being in the ways that MDBs proclaim requires close examination.
Focusing on the International Finance Corporation (IFC), a private-sector lending institution of the World Bank Group, this report unpacks the concept of “digital transformation,” posing the question: what exactly is being transformed by digital technologies, for whom, and with what implications? The report then analyzes the IFC’s current framework for assessing the risks and impacts of its investments and for remedying harms arising from its projects and identifies key challenges that digitalization poses to existing risk and impact assessment frameworks and remedy mechanisms. It then proposes forward-looking suggestions for how existing frameworks might be rethought and reformed.
