World Bank Invites Comment About Governance Report

12 September 2016

The World Bank has requested public comment — by Sept. 16 — on a new version of a controversial report about the role of power imbalances in development policy.

The “Green Cover” version of the 2017 World Development Report (WDR), posted Sept. 9 on the Bank website, addresses the general topic of governance. It “seeks to shed light on how a better understanding of governance can bring about more effective policy interventions to achieve sustainable improvements in development outcomes,” according to the Bank summary.

An email address is provided for public comments. The Bank invited comments “from a wide group of civil society organizations with which they have consulted at regular intervals throughout the process,” according to a Bank official.

The comments will be collated by moderator, Stephen Commins and posted in a single document at the end of this week’s consultations period. Stephen is a Lecturer, Regional and International Development, Department of Urban Planning; and the Associate Director, Global Public Affairs, Luskin School of Public Affairs, UCLA

The Bank Board is scheduled to discuss the report Oct. 20.

An initial draft, known as the “yellow cover” version, made its way outside the Bank informally in June while being reviewed internally. (See previous FreedomInfo.org report.) One very critical internal review came from the vice president overseeing the process, who said it should be “significantly recast.” (See previous FreedomInfo.org report.)

Soliciting outside comments on WDRs has been done in the past, but not in recent years. WDRs are done annually on selected topics deemed strategically important. The final draft reports (the “gray cover” versions) are reviewed by the Bank Board before being released in final form.

The key message of this year’s report, which runs to more than 400 pages, revolves around “asymmetries in bargaining power” and how to analyze and react to them in order to achieve better outcomes. The report does not focus extensively on operational implementation.

One potential outcome under discussion would be to increase Bank efforts to disseminate objective information related to national policy debates. The draft also speaks of the importance of transformational leaders, people who have the capacity to challenge and change political policies and beliefs.

“Strong reservations” about the report were expressed in a four-page memo by Jan Walliser, Vice President of Equitable Growth, Finance, and Institutions (EFI). He asked that “the conceptual framework” of the report “be significantly recast and broadened.” His memo noted what he described as “voluminous and often critical” reaction to the report from within the Bank.

Preparation of the report comes as the Bank appears to have cut back on its efforts to support freedom of information and on its funding of civil society efforts to hold governments accountable. (See previous Freedominfo.org report on the Bank FOI staff reduction and a story on the subsequent international CSO protest letter. See previous FreedomInfo.org article on a reduction in funds for the Global Partnership for Social Accountability.)

The brief summary of the report by the Bank states:

The World Development Report (WDR) 2017 seeks to shed light on how a better understanding of governance can bring about more effective policy interventions to achieve sustainable improvements in development outcomes.

The Report makes three main arguments. First, it illustrates how for policies to achieve development outcomes, institutions must perform three key functions: enable credible commitment, enhance coordination, and induce cooperation. Thus, laws and institutional forms matter only to the extent that they are able to generate these functions to induce the behavior of actors necessary to implement desired policies.

Second, the Report argues that the effective performance of these three functions is shaped by the policy arena through which state and non-state actors interact to design and implement policies. Specifically, the relative power of different actors in the arena is critical to enabling — or constraining — policy effectiveness. Unhealthy power asymmetries can lead to persistent policy failure through exclusion, capture and clientelism. Ideally law serves to provide checks and balances on the exercise of power, but often either reflects the interests of the powerful, or gives way to informal deals.

Third, the Report examines how the agency of elites, citizens and international actors can reshape the policy arena to expand the set of effective implementable policies. Ultimately this requires changes in the incentives of actors to pursue reforms, a shift in actors’ preferences and beliefs, and changes in the way decision making occurs to enable contestability by marginalized actors. Law can be a powerful instrument to reshape the policy arena by changing payoffs that in turn affect incentives, by enhancing focal points around which coordination can occur, and by increasing contestability by under-represented actors.

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In this column, Washington, D.C.-based journalist Toby J. McIntosh reports on the latest developments in information disclosure in International Financial and Trade Institutions (IFTI).
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