The World Bank introduced its Framework for Financial Incentives (FFI) in February 2025, offering middle-income countries benefits such as increased financing, extended repayment terms, and reduced interest rates for projects that generate advantages beyond their national borders. The FFI is designed to support initiatives in areas like pandemic preparedness, biodiversity conservation, and cross-border water management while aligning with each country's development objectives.
Through the Livable Planet Fund under the FFI, these countries—representing about three-quarters of the global population and containing most of the world's biodiversity hotspots—can now access targeted grants. These grants are intended to make large-scale cross-border projects financially feasible.
Homi Kharas, a senior fellow at the Brookings Institution, commented on the evolving understanding of global public goods: "Global public goods is now such an interesting concept because it essentially starts to recognize that we are in a single world. Development in any country also has implications for how other countries develop."
Kharas highlighted what he sees as a key advantage of the FFI: "The beauty of these kinds of programs is that it takes away this notion of a trade-off. For the finance minister the question is never going to be 'either do this or do that.' The question is: if you do this in this way, then you can actually do better for your own country and better for the world."
Kevin Watkins, visiting professor at the Firoz Lalji Institute for Africa at the London School of Economics, described the importance of prioritizing global public goods. "It's great to see the World Bank today playing a leadership role in restoring global public goods to where they ought to be, which is right at the top of our international agenda,” Watkins said.
Watkins emphasized the long-term responsibility inherent in such initiatives: "Our ultimate responsibility is to hand on to our children and to their grandchildren a planet that is sustainable, a planet that is livable. We need to behave like good ancestors who think about the well-being of people in the future, and I think what the World Bank has put in place with this initiative is a financial structure that creates the incentives that could enable us to do that."
Nick Vaughan from International Finance Fixture for Education pointed out challenges around collective action but expressed optimism about new approaches. He said: "Countries should be offered incentives to make the necessary investment to address the externality. I'm really pleased and excited to see the World Bank innovating at pace to offer incentives and adjust their frameworks."
Vaughan encouraged nations considering investments with broad impact: "I would urge [countries] to approach the World Bank and other MDBs first because these institutions provide the best possible terms for countries to invest in national priorities."