[11] The UN and United States government published reports expressing support for the creation of a multilateral, concessional lending program for the poorest developing countries.

[10] However, the United States was largely unresponsive and ultimately distracted by its involvement in the Korean War and unconvinced that development needed greater financial stimulation.

[11] Developing countries grew increasingly frustrated with not being able to afford IBRD lending and perceived the Marshall Plan as a comparatively generous gift to European nations.

Despite the launch of the IFC in 1956, developing countries persisted in demanding the creation of a new concessional financing mechanism and the idea gained traction within the IBRD.

[12] Paul Hoffman, the Marshall Plan's former Administrator, proposed the idea of a soft-loan facility within the World Bank, where the US would have a preponderant voice in the allocation of such loans.

[11] The resolution passed the senate in 1958, and then-U.S. treasury secretary Robert B. Anderson encouraged other countries to conduct similar studies.

[citation needed] By the end of January 1960, fifteen countries signed the articles of agreement which established the International Development Association.

[19] In 2011, the group recommended the Bank provide recognition and incentives to staff and management for implementing activities which implement the Paris Declaration on Aid Effectiveness principles of harmonization and alignment, promote greater use of sector-wide approaches to coordination, and explain the reasons why when a country's financial management system is not used so that the client country may address those shortcomings.

These changes will imply a need for the association to carefully examine its financial models and business operations to determine an appropriate strategy going forward.

[27] The association assesses countries based on their per capita income, lack of access to private capital markets, and policy performance in implementing pro-growth and anti-poverty economic or social reforms.

[7][28] As of 2019[update], to borrow from the IDA's concessional lending programs, a country's gross national income (GNI) per capita must not exceed $1,145.

[30][31] Whereas the IBRD acquires most of its funds by raising capital on international financial markets, the IDA heavily depends on contributions from its member states.

Most of the donor countries such as the United States commit letters of credit to the IDA which bear no interest and are not able to be transferred or revoked, and which are exchanged for cash as needed for project disbursal.

When donor countries convene to negotiate the replenishments, there is often intense discussion about redefining the association's goals and objectives or even about reforming the IDA.

[41] Due to delays in the United States Congress impeding the approval of IDA funding, the association's members implemented a set of policy triggers outlining the commitment threshold necessary for replenishment to take effect.

Though countries intended for the triggers to hold the United States to its commitments, the threshold ultimately provided the United States a de facto veto power over replenishment and capital increase negotiations due to its ability to bring replenishment negotiations to an impasse by threatening to withhold support.

The U.S. has used this influence to further its long-term foreign policy objectives and short-term political and economic goals by imposing conditionality on replenishment negotiations.

[11][dubious – discuss] The IDA lends to countries with the aim to finance projects that will develop infrastructure and improve education, healthcare, access to clean water and sanitation facilities, and environmental responsibility.

Numerous Asian countries have graduated from the IDA lending program, including the Philippines, China, South Korea, Thailand, and India.

To mitigate this effect, the IDA adopted an economic plan of action which established organizations to improve education and healthcare, with a focus on reducing poverty across Asian nations in ways that are compatible with local culture.