Suchergebnisse

Sound economic and social policies are important if countries wish to prosper and achieve sustainable development. It is far from guaranteed, however, that policymakers select and implement good policies, which provides a rationale for external policy support. Indeed, many organizations are engaged in supporting policy reform processes in recipient countries. This study investigates the limits and opportunities of supporting policy reform by focusing on four dimensions of support: conditional financing, policy dialogue, technical evidence and political institutions. Four findings follow from a review of the literature. First, without commitment on the recipient side, conditional financing is unlikely to induce policy reform. Second, when external actors acquire a seat at the policy dialogue table, it is important to detect (and influence) the beliefs policymakers hold. Third, outside parties should bring sound evidence to the table about the costs, benefits, and effectiveness of their policy proposals. Finally, supporting changes in political institutions without considering general equilibrium effects can be counterproductive. The study concludes with a discussion and some avenues for future research in this field.

AbstractThis paper investigates the impact of World Bank policy lending on the quality of economic policy. A new econometric specification distinguishes among two effects that have been conflated hitherto: (i) marginal impacts of additional policy actions and (ii) the length of the policy engagement. Panel estimations on a revised data set indicate that development policy financing has a positive effect on the quality of economic policy. Results are robust to the use of different estimation techniques, sample restrictions, the inclusion of additional controls, omitted variable bias adjustment, a placebo test and a compound IV strategy. Next, the econometric work suggests that the quality of the engagement matters more than the sheer number of policy actions. We provide several arguments of why the process of engagement is key. Finally, there is evidence that longer engagements lead to lower policy impacts, which may be related to a change to more complex, second‐generation reforms. © 2020 John Wiley & Sons, Ltd.

This paper investigates the impact of World Bank development policy operations on the quality of economic policy during the period 1998-2015. A new theoretical framework distinguishes among three effects that have been conflated hitherto: (a) marginal impacts of additional policy actions within the current year; (b) length of the policy engagement with client countries, and (c) changes over time in the marginal impact of policy actions. The analysis focuses on policy actions that are particularly relevant for the quality of economic management. Consistent with past research, robust panel estimations indicate that development policy financing has a positive effect on the quality of government economic policy. The econometric work suggests that the nature of the policy dialogue and quality of the engagement with government matter more than the sheer number of policy actions adopted. There is also tentative evidence that although the positive impact is sustained over time, the initial years of an engagement are the most productive for improvement in government economic policy. This may be linked to the fact that over time the reform program changes from 'first-generation' to more complex 'second-generation' policy actions.

This study investigates the impact of World Bank development policy lending for public sector governance on the quality of public sector management and institutions. The World Bank's Country Policy and Institutional Assessments (CPIA) are used to measure the latter, the study considers only policy conditions targeted at improvements in those areas. The analysis uses a comprehensive country-year panel data set of aid receiving-countries and finds a significant and inverse U-shaped effect of public sector conditions on the quality of public sector governance. For most observed values in the data, the impact is positive, but it turns negative beyond a value of 80 conditions. At that point, the predicted CPIA score is about 0.25 point (0.3 standard deviation) higher than with zero conditions. For most observations, the number of cumulative conditions is below 80, so the estimated effect of more conditions is generally positive. The analysis corrects for potential endogeneity and shows that the results are robust to sample restrictions, the use of an alternative governance measure, and the inclusion of an extended set of control variables. Falsification tests are also consistent with a causal interpretation from conditions to quality of public sector governance. The paper shows that conditions related to public financial management and tax reforms are more effective than those related to anti-corruption or civil service and administrative reform, where progress requires changing the behavior of a larger set of "deconcentrated" actors. The paper concludes by describing some innovative ideas in the Bank's ambitious new public sector management strategy that could improve the effectiveness of its support for public sector governance reform.

This paper examines the relationship between public financial management (PFM), the financing of health interventions, and health outcomes. Specifically, the paper econometrically tests whether the effect of PFM on under-five (U5) mortality depends on the relevance of public sector health financing. Employing OLS on a sample of 215 observations indicates that a one-unit increase in PFM quality is associated with a reduction in the U5 mortality rate with about 14 deaths per 1,000 live births. For countries that channel at least 75 percent of health expenditures through the government system, this rate increases to 17 deaths per 1,000 child births. Results are robust to using an alternative dependent variable, adding year fixed effects, a sensitivity test where the health financing threshold is varied, a falsification test that verifies whether findings are driven by unobserved governance aspects, a sample restriction, and the inclusion of different controls. Furthermore, the paper provides a comparative analysis for Latin America and Caribbean (LAC), a region that remains mostly overlooked in the literature. The findings for LAC are broadly consistent with the global sample, though less pronounced and without a differential effect for countries across the financing threshold. Overall, the evidence indicates that the pursuit of universal health coverage and the progress toward related SDGs will be costlier if enabling systems are not in place.

This article presents a new, publicly available data set covering all budget support (BS) suspensions in the period 1999–2014. The data set covers 239 BS suspensions, involving 18 donors and 40 recipient countries. This article shows an aggregate picture of these suspensions, including the reasons why donors suspended, which donors have been active in suspending their BS, and which countries have been undergoing these aid sanctions. From this aggregate picture some patterns drawn out, substantiate a couple of things that have surfaced in the literature already. With 42% of BS suspensions in the Democracy and Human Rights category, it is clear that democratic governance has been a pertinent reason to legitimize BS suspensions. The large number of suspensions in some countries also indicates the unpredictability of budget support. The data set and the user guide can be downloaded at www.uantwerp.be/budget-support-suspensions.