Should Policy-Based Lending Still Involve Conditionality?
Traditional conditionality in policy-based lending is often criticized as being ineffective, intrusive, and corrosive. Disillusionment has led to replace ex ante conditionality with ex post conditionality and to focus on ownership, selectivity, and...
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| Format: | Journal Article |
| Language: | English en_US |
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World Bank
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2013/01/17548227/policy-based-lending-still-involved-conditionality http://hdl.handle.net/10986/16413 |
| Summary: | Traditional conditionality in
policy-based lending is often criticized as being
ineffective, intrusive, and corrosive. Disillusionment has
led to replace ex ante conditionality with ex post
conditionality and to focus on ownership, selectivity, and
partnership. This article reviews experiences with
conditionality in the World Bank policy-based lending and
explores the benefits and drawbacks of various approaches.
It argues that conditionality should play a central role in
policy-based lending-but cannot substitute for country
ownership and good policies. Moreover an exclusive focus on
conditionality based on ex ante commitments or ex post
results may not be practical or useful for the Bank
policy-based lending. Thus a key recommendation in to use
conditionality selectively, tailred to country
circumstances. Indeed, an eclectic mix of traditional and
new approaches is already being used with programmatic
policy-based lending offering a particularly promising way
to reconcile the debate between the traditional ex ante
approach and the aspirations of a results-based approach to conditionality. |
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