Is It the Journey That Matters? : A Fresh Look at the Impact of World Bank Policy Lending
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) margi...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/616021542116899115/Is-It-the-Journey-That-Matters-A-Fresh-Look-at-the-Impact-of-World-Bank-Policy-Lending http://hdl.handle.net/10986/30873 |
| Summary: | 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. |
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