World Bank Lending and the Quality of Economic Policy

This study investigates the impact of World Bank development policy lending on the quality of economic policy. It finds that the quality of policy increases, but at a diminishing rate, with the cumulative number of policy loans. Similar results hold for the cumulative number of conditions attached to policy loans, although quadratic specifications indicate that additional conditions may even reduce the quality of policy beyond some point. The paper measures the quality of economic policy using the World Bank’s Country Policy and Institutional Assessments of macro, debt, fiscal, and structural policies, and considers only policy loans targeted at improvements in those areas. Previous studies finding weaker effects of policy lending on macro stability have failed to distinguish loans primarily intended to improve economic policy from other loans targeted at improvements in sector policies or in public management. The paper also shows that investing in economic policy does not ‘crowd out’ policy improvements in other areas, such as public sector governance or human development. The results are robust to using alternative indicators of policy quality and correcting for endogeneity with system generalized methods of moments and cross-sectional two-stage least squares. The more positive results in the study relative to some previous studies are consistent with claims by the World Bank that it has learned from its mistakes with traditional adjustment lending.     

The Relational Dynamics of World Bank Survey Missions

This article demonstrates that World Bank internal learning has led to significant changes in how the organization interacts with government officials through survey missions. Reviewing evidence of institutional learning and associated changes in practice and focusing on the relational modes being manifest in technical assistance, the article identifies three main phases of World Bank survey missions: general survey missions (1940s–1960s), country assistance strategies (1990s–2000s), and country partnership frameworks (2010s). Overall, World Bank reviews have repeatedly highlighted the importance of non-hierarchical interactions between Bank staff and country officials. In recent years, practice has begun to catch up with these operational insights.     

Patterns of Enterpreneurship: A Study of Gender Training Frameworks for Officers of the Indian Administrative Service

Abstract

The awareness of women as a category of development promoted the establishment of Women in Development (WID) organizations but these remain on the peripheries of mainstream development concerns. This research examines the entrepreneurial roles of Indian Administrative officers for gender aware planning and implementation of gender aware development planning. The Indian Administrative Service (IAS) is a critical stakeholder in the innovation process for gender aware development planning. This article reviews the introductory training program of all IAS candidates to establish the institutional culture and organizational procedures describing the audience of the IAS organization. The institutional culture and procedures of the IAS perpetuate a gender bias for WID and not Gender and Development (GAD) programs. Bureaucratic advocates for this type of development planning hold conflicting roles within government agencies as system maintainers and policy advocates. This study reviews the content and implications of three different gender-training frameworks dominate in the field: gender analysis, gender-planning, and social relations. Comparing these frameworks provides insights into the positioning of IAS officers and departments as possible agents of innovation for gender aware planning and policy. The range of innovations vary from acquiring skills for job performance, or creating separate agencies and new institutions to assessment of entrenched attitudes and procedures reinforcing gender inequity within the agency. Implicit in each framework are different views about IAS officers as planners and administrators.     

Gender and institutional strengthening: the World Bank's policy record in Latin America

This article examines the gendered nature of institutional strengthening policies at the World Bank, as part of an attempt to analyse what role gender plays in the institutionalist turn within development policy. It focuses on three snapshots of Bank action wherein debates about gender and institutional strengthening are particularly pertinent: Washington, DC policy texts and Presidential speeches; gender policy enacted in the Latin American and Caribbean region; and an Argentine project loan on social capital promotion and family strengthening. Two themes emerge from these sites: (1) that couplehood between men and women has been identified as a key informal institution necessary for development; and (2) that gender reform has been positioned as an institutional change issue requiring attention to issues such as social marketing. New norms about gender interaction thus emerge as an explicit part of the Bank's reform agenda, and are shaping project experiences across Latin America.     

The Public Sector Reform Movement: Mapping the Global Policy Network

Public sector reform in both developed and developing countries has now become a routine matter of public policy—reform is almost continuous, if not always successful. While the role of international transfer agents such as the World Bank and the Organization for Economic Cooperation and Development (OECD) in promoting reforms has often been noted, there has been no comprehensive mapping of the global network on public sector reform. This article makes a first attempt to map the close to 100 organizations that make up a loose global network around public administration and governance. It then provides a brief history of the evolution of the network, and the key events that encouraged a substantial degree of coherence among its members. It examines the practices and tools that are specific to this global public policy network, and concludes with some observations on policy transfer models. The article shows that in trying to understand the dynamics of public administration reform, we need to pay greater attention to this network, its members, and its influence over national policy priorities.     

Political enthusiasm for social pensions and its eventual decline in Taiwan: an institutional account of pension dynamics in a new democracy

Over the last two decades, there has been a remarkable transformation of the demography and political economy of East and Southeast Asia, thus raising pensions as an important policy issue. In addressing the pension needs of those outside formal sector employment, Taiwan was the regional forerunner regarding social pension provision. However, the immense political popularity of these schemes waned and from the mid-2000s onwards the government began to substitute them with a contributory system for the socially disadvantaged. This paper analyses the political dynamics of social pensions in Taiwan, from expansion of coverage through to gradual dismantlement. The politics surrounding these benefits has received scant attention in international scholarship, with the World Bank and the Asian Development Bank Institute, in particular, having focused most of their attention on policy design issues. The contention here is that a specific configuration of political factors featured prominently in Taiwan, thus providing an explanation for the evolution of its pension policy. Also, these political dimensions can shed light on how this type of pension could evolve in other East and Southeast Asian countries, which is pertinent given that many have increasingly ageing populations.     

The emergence of new technology enterprises in China: A study of endogenous capability building via restructuring

This article examines the emergence of a vital non‐state sector, consisting of New Technology Enterprises (NTEs) spun off from existing R&D institutions during the economic reforms in China. Most NTEs are engaged in computer and information technology. Based on an outline of the development of the NTEs, this article focuses on an analysis of a few critical aspects of the restructuring process through which the NTEs gained entry to a sphere of innovative economic activity. The analysis shows that, while the newly emerged NTEs have to have international levels of competitiveness, the restructuring process has been highly specific to the local society. The article concludes by stressing the critical importance of the organisational innovation of the economic actors and the creation of institutions to support creative economic activities, if developing countries are to cope with the pressing trends of rapid technological progress and economic globalisation.     

Czech regional development agencies in a shifting institutional landscape

In recent years regional development disparities in the Czech Republic have been increasing, regional policy and regionalisation have moved up the national political agenda, and considerable regional development resources have become available through EU Structural Funds. The Czech Republic now has more than 18 institutions that describe themselves as Regional Development Agencies (RDAs), with a wide range of policy and practical experience and, in the present climate, they should now be poised to take on a key regional development role. However, their function and position in regional development networks is continually plagued by uncertainty, and they are struggling to fulfil the ‘ideal’ of what an RDA is and what it should do. This article asks why this is the case and examines how domestic and EU policy agendas and actors have influenced the role and function of RDAs in the Czech Republic. Whilst theories such as ‘new regionalism’ suggest that RDAs can lead integrated, bottom-up regional development actions, it is questionable whether Czech RDAs have the capacity to adapt to the type of role that proponents of this approach expect.     

The civil unrest as an obstacle toward financial development in Georgia, 1991–2007

Georgia has been experiencing robust GDP growth since the Rose Revolution despite its formal financial system remaining critically underdeveloped. This goes against a strongly supported proposition that a country’s economic development is followed by a well-developed and efficient financial system. In this paper we first explain the shallow financial deepening in Georgia and show that the economic growth in Georgia has been driven by such determinants as public spending and construction works mainly supported by foreign debt and FDI inflow. This paper further argues that prolonged civil conflict is one of the critical obstacles toward financial development in Georgia. Bank lending activity is associated with high level of uncertainty stemming from recurrent civil war. Newly privatized commercial banks are excessively cautious in expanding their loan assets to private non-financial corporations due mainly to the banks’ inability to precisely assess borrower’s risk involving not only with individual financial soundness but also with political uncertainty.     

Publicization,privatization, synthesis,tradition: options for public-private configuration (1)

In contrast to the attention paid to the privatization movement, relatively little heed has been given to a related and similarly large and important trend toward publicization. In publicization, a public sector organization proactively undertakes actions or responsibilities, and takes on characteristics, usually identified in that given setting with the private sector. An example of this movement appears at the local level of government: the ongoing funding available from Urban Development Action Grant and Community Development Block Grant programs is invested in development projects that private sector firms undertake. After discussing these examples, the article develops the concept of publicization and examines it in relation to the well-established concept of privatization. Based especially on the work of E.S. Savas, a typology is developed to place both publicization and privatization in a broader framework of public-private configurations. The typology indicates the relationship among publicization, privatization, and the additional categories of synthesis and tradition.     

Federalism and low-maintenance constituencies: Territorial dimensions of economic reform in Argentina

How does the territorial distribution of political and economic resources within national polities influence politics and policy making? This article examines the electoral dynamics of market reform in Argentina between 1989 and 1995. It provides insights into the way that the distribution of economic and institutional resources in federal systems shapes policy making and coalition building options for reformist governments. The electoral viability of the governing Peronist Party during the economic reform period was facilitated by the regional phasing of the costs of market reform. Structural reforms were concentrated primarily on economically developed regions of the country, while public spending and patronage in economically marginal but politically overrepresented regions sustained support for the governing party. Statistical analyses contrast patterns of spending and public sector employment in “metropolitan” and “peripheral” regions of the country during the reform period, as well as the social bases of electoral support in those regions. A conceptual distinction between “high-maintenance” and “low-maintenance” constituencies is also introduced to shed light on the dynamics of patronage spending in contexts of market reform.     

‘SAFEGUARDING NATIONAL CREDIBILITY’: FOUNDING THE BANK OF CHINA IN 1912

Abstract

The Bank of China led China’s modern-style banks during the Republican era, supporting the Chinese state through war and peace and financing China’s industrialization in the first half of the twentieth century. This article explores the founding of this institution in 1912 in the context of building the modern Chinese nation state following the 1911 Revolution. It argues that the events that made possible the Bank of China’s founding illustrate the contingent nature of state building. Furthermore, emphasis is on the critical relationship between finance and political legitimacy in state building. The article also shows how the creation of an institution such as the Bank of China, which was originally intended to be the new Republic’s central bank, gave the fledgling state the opportunity to support the transfer of legal rights in regime change.     

How comprehensive is comprehensive? Using Wangari Maathai as a critique of the World Bank’s contemporary development model

This paper asks how comprehensive and holistic is the World Bank’s current development model, also known as the Comprehensive Development Framework (CDF), in Africa? By comprehensive and holistic, I am referring to whether the framework has the ability to capture the sources of all impediments to progress in different African contexts and offer corresponding solutions. I argue that the CDF is myopic and hackneyed. Not only does the World Bank employ the same neoliberal logic that informed structural adjustments, but it also continues to miss crucial non-material facets of development in the African countries it purports to serve. I make this argument by comparing the CDF/Poverty Reduction Strategy Papers (PRSP) model in Kenya to the under-utilised development philosophy of Wangari Maathai. This comparison intimates that an alternative to the CDF is not only possible, but also necessary. Maathai demonstrates how any holistic development approach for postcolonial Africa must grapple with both international and domestic factors that historically and currently exacerbate the chrysalis of political, economic, and social progress. A comprehensive approach must also deal with the particulars of each context while not eliding the uniform histories of exploitation and purposive underdevelopment that many African countries share.     

LIBERALIZATION AND THE PUBLIC SECTOR: THE PRE-EMINENT ROLE OF GOVERNMENTS IN THE 'SALE' OF HIGHER EDUCATION ABROAD

Much recent scholarship concerning liberalization has emphasized the role of regulatees, rather than governments, in promoting liberalization. This article examines such scholarship in the light of an important development in the British and French public sectors—the creation of new agencies (the Education Counselling Service and EduFrance) to 'sell' British and French higher education to potential international students. The new agencies attempted to induce two things: competition amongst higher education institutions for the recruitment of international students from developed and emerging economy countries, and the commodification of these students. This article shows that, contrary to existing theories of liberalization, governments were pre-eminent in pushing forward this liberalization, while higher education institutions attempted to hold it back.     

A Social Discount Rate for Appraisal of Regional Investments: Evidence from Russia

This article provides estimates of a social discount rate (SDR) to inform government policy in Russia. We find that a SDR should be determined for the whole country as well as for particular regions. We apply the social rate of time preferences approach and estimate values for public sector projects at national and regional levels. All calculations are based on data from the Federal State Statistics Service of Russia. Findings help the decision-making process in the public sector of economics. Suggestions are useful for Russia as well as for post-Soviet countries and other developing economies with regional diversity.     

Environmental resettlement and development,on the steppes of Inner Mongolia,PRC

Abstract

The World Bank, other development institutions and a few countries, like China, have elaborated resettlement policies which envisage Resettlement with Development (RwD). However, the understanding of Development embodied in the discourse of RwD is confused. After distinguishing between the concepts of development as outcome and development as process, we investigate two projects of environmental resettlement in Inner Mongolia, PRC. The planning and implementation of these projects reveal the state's interpretation of RwD. There has been some Development (outcome) in some places, notably improvements in material well-being. However, the processes of development have been more extensive, involving increased participation in markets for produce and labour. The state, we conclude, identifies involvement with markets as the principal means of achieving material Development outcomes.     

Why are Informal Loans Still a Big Deal? Evidence from North-east Thailand

Abstract

This article examines the use and benefit of informal loans for different income groups of rural households in north-east Thailand. Using a difference-in-differences estimation approach, which is later complemented by propensity score matching, the article shows that different household groups profit from informal loans in different ways. Poor households increase their asset endowment, and in particular farming assets, whereas rich households’ (food) consumption rises, especially if households borrow due to a shock. By showing that informal loans serve different households for different purposes, this article provides an explanation why they still play an important role.     

Inter-Jurisdictional Economic Development: A Political Institution Explanation for Policy Choice

This study examines the role of formal institutions and rules of government in the formation of joint venture agreements for economic development. Research suggests local governing arrangements play an influential role in the policy area of local economic development. This study presents an argument that form of government provides incentives that influence the decision to establish a developmental, redistributive, or regional interjurisdictional agreement. The results of a multinomial logit model using survey data collected from 12 metropolitan areas provides evidence to support the hypotheses that unreformed governing institutions, compared to cities with an appointed professional manager, are more likely to form joint venture agreements that are developmental in nature.     

AGENTS OF INFLUENCE: COUNTRY DIRECTORS AT THE WORLD BANK

This article seeks to understand the operations of the World Bank by examining one particular group of players—the country directors (CDs). It argues that the analysis of international organizations (IOs), by focusing on the behaviour of their principals (states), as principal-agent analysts do, or on organizational cultures, as the constructivist approach does, is inadequate in explaining the operation and behaviour of IOs, which are themselves complex organizations with chains of cascading relationships. Country directors at the World Bank occupy a pivotal position in this chain: with executive directors and the president as their nominal and ultimate principals, vice presidents as their direct principals and client countries as informal principals. They are themselves principals to their country team and to some sector people. For both conceptual and empirical reasons, therefore, CDs deserve separate analysis. To explain the way these relationships shape the work CDs do and how they do it, this article examines three basic functions of country directors at the Bank: (1) representing the Bank to the client countries; (2) representing the country to the Bank; and (3) managing the country offices and country programmes. The empirical section of this article is based on interviews with over 80 officials in both Washington and field offices. We show that an understanding of the Bank and its operations requires an examination of its internal processes and its staff.