IDEAS home Printed from https://ideas.repec.org/a/bla/rdevec/v10y2006i2p253-266.html
   My bibliography  Save this article

Development Policy Lending, Conditionality, and Ownership: A Dynamic Agency Model Perspective

Author

Listed:
  • Alberto Paloni
  • Maurizio Zanardi

Abstract

Is the World Bank's Development Policy Lending likely to enhance ownership and have greater effectiveness than structural adjustment? We specify a dynamic common agency model in which a government considering economic reform faces domestic opposition from interest groups. The dynamic specification, which is original in the context of policy reforms supported by the International Financial Institutions (IFIs), is essential to allow the strength of special interest groups to arise endogenously during the reform process. We show that conditionality may alter the country's political equilibrium and lead to higher social welfare. However, under certain circumstances which depend on country‐specific circumstances, conditional assistance could lead to lower social welfare. Thus, for conditionality not to be inconsistent with ownership, its design must be appropriate to the country circumstances and directly affect the domestic political constraint.

Suggested Citation

  • Alberto Paloni & Maurizio Zanardi, 2006. "Development Policy Lending, Conditionality, and Ownership: A Dynamic Agency Model Perspective," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 253-266, May.
  • Handle: RePEc:bla:rdevec:v:10:y:2006:i:2:p:253-266
    DOI: 10.1111/j.1467-9361.2006.00316.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-9361.2006.00316.x
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Wolfgang Mayer & Alex Mourmouras, 2004. "The Political Economy of Conditional and Unconditional Foreign Assistance; Grants vs. Loan Rollovers," IMF Working Papers 04/38, International Monetary Fund.
    2. Alex Mourmouras & Wolfgang Mayer, 2002. "Vested Interests in a Positive Theory of IFI Conditionality," IMF Working Papers 02/73, International Monetary Fund.
    3. Wolfgang Mayer, 2004. "The Political Economy of Unconditional and Conditional Foreign Assistance: Grants vs. Loan Rollovers," University of Cincinnati, Economics Working Papers Series 2004-02, University of Cincinnati, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Graham Mallard, 2014. "Static Common Agency And Political Influence: An Evaluative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 17-35, February.
    2. Wolfgang Mayer & Alex Mourmouras, 2008. "IMF conditionality: An approach based on the theory of special interest politics," The Review of International Organizations, Springer, vol. 3(2), pages 105-121, June.
    3. Vaughn F. Graham, 2017. "Toward a Conceptual Expansion of Ownership and Post-2015 Global Development Policy: Illustrations from the Jamaican Experience," Development Policy Review, Overseas Development Institute, vol. 35(3), pages 373-395, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:rdevec:v:10:y:2006:i:2:p:253-266. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley Content Delivery). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.