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The World Bank and governance : the Bank's efforts to help developing countries build state capacity

  • de Janvry, Alain
  • Dethier, Jean-Jacques

This paper examines historically the World Bank's twin features: lending to developing economies to achieve tangible results and advocating specific development policies. Section 1 provides some conceptual underpinnings for the view that an effective state is essential for development. It asks whether development can be engineered, and state capacity increased, with large aid flows. Section 2 sketches the historical evolution of what characterizes the World Bank: lending to developing economies and advocacy of development policy. It concludes that, while the Bank discourse explicitly recognizes that developing countries need to improve their governance and build the capacity of the public sector to improve living standards, the Bank's performance in assisting governments in building state capacity and achieving better governance outcomes has been disappointing. Section 3 proposes an interpretation of why this has been the case. The interpretation is structural, and related to the way the Bank is organized. This concerns in particular (1) how its research is prioritized and used for decision-making, (2) how its leadership achieves a consensus between shareholders who hold different views on the role of government in the economy, and (3) how incentives for its staff emphasize disbursement and short-term success, and not capacity building and longer-term institutional sustainability.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6275.

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Date of creation: 01 Nov 2012
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Handle: RePEc:wbk:wbrwps:6275
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  1. Collier, Paul & Dollar, David, 1999. "Aid allocation and poverty reduction," Policy Research Working Paper Series 2041, The World Bank.
  2. Merilee S. Grindle, 2007. "Good Enough Governance Revisited," Development Policy Review, Overseas Development Institute, vol. 25(5), pages 533-574, 09.
  3. Knack, Stephen & Rahman, Aminur, 2004. "Donor fragmentation and bureaucratic quality in aid recipients," Policy Research Working Paper Series 3186, The World Bank.
  4. Ghazala Mansuri, 2004. "Community-Based and -Driven Development: A Critical Review," World Bank Research Observer, World Bank Group, vol. 19(1), pages 1-39.
  5. William Easterly, 2002. "What did Structural Adjustment Adjust? The Association of Policies and Growth with Repeated IMF and World Bank Adjustment Loans," Working Papers 11, Center for Global Development.
  6. Michele Alacevich, 2009. "The Political Economy of the World Bank : The Early Years," World Bank Publications, The World Bank, number 13807, December.
  7. M A Thomas, 2010. "What Do the Worldwide Governance Indicators Measure?," The European Journal of Development Research, Palgrave Macmillan, vol. 22(1), pages 31-54, February.
  8. Dethier, Jean-Jacques, 2009. "World Bank policy research : a historical overview," Policy Research Working Paper Series 5000, The World Bank.
  9. Channing Arndt & Sam Jones & Finn Tarp, 2011. "Aid Effectiveness: Opening the Black Box," Working Paper Series UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
  10. Denizer, Cevdet & Dethier, Jean-Jacques & Gelb, Alan, 2011. "Development Economics and the International Development Association," Policy Research Working Paper Series 5541, The World Bank.
  11. Nicholas Stern & Jean-Jacques Dethier & F. Halsey Rogers, 2006. "Growth and Empowerment: Making Development Happen," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262693461, June.
  12. Stefan Koeberle & Harold Bedoya & Peter Silarszky & Gero Verheyen, 2005. "Conditionality Revisited : Concepts, Experiences, and Lessons," World Bank Publications, The World Bank, number 7346, December.
  13. Brian Levy & Sahr Kpundeh, 2004. "Building State Capacity in Africa : New Approaches, Emerging Lessons," World Bank Publications, The World Bank, number 14878, December.
  14. Jean-Jacques Dethier & Maximilian Hirn & St├ęphane Straub, 2011. "Explaining Enterprise Performance in Developing Countries with Business Climate Survey Data," World Bank Research Observer, World Bank Group, vol. 26(2), pages 258-309, August.
  15. Laura Langbein & Stephen Knack, 2010. "The Worldwide Governance Indicators: Six, One, or None?," Journal of Development Studies, Taylor & Francis Journals, vol. 46(2), pages 350-370.
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