World Bank Policy Lending and the Quality of Public Sector Governance

Lodewijk Smets · Stephen Knack

40 citations0/0 files storedWorld Bank, Washington, DC eBooks

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

International Development and Aid Public Administration in Developing Nations Corruption and Economic Development

Abstract

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.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 40 citations exist upstream.

References

1991Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations 1998Initial conditions and moment restrictions in dynamic panel data models 1995Another look at the instrumental variable estimation of error-components models 1995Initial conditions and moment restrictions in dynamic panel data models n.d.Aid, Policies, and Growth 2008Governance Matters VII: Aggregate and Individual Governance Indicators, 1996-2007 2004Foreign Aid, Institutions, and Governance in Sub‐Saharan Africa 2002Do Corrupt Governments Receive Less Foreign Aid?

Cited by

2019Supporting Policy Reform from the Outside 2016World Bank's Experience with Structural Reforms for Growth and Development 2021Aid Management, Trust, and Development Policy Influence: New Evidence from a Survey of Public Sector Officials in Low-Income and Middle-Income Countries 2016Supporting Transformational Change for Poverty Reduction and Shared Prosperity 2023Retooling Development Aid in the 21st Century

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.