Catalog

	Table of Contents
p. 11 of 34 BACK | NEXT Executive Summary Introduction Good governance defined The elements of good governance The Bank’s concern with governance quality Policy context of the Bank’s project lending Focus on equity and development performance Project quality The East Asian experience Outlook for the future The Bank’s approach to governance issues Promoting the elements of good governance in Bank operations The Bank’s modalities for enhancing governance in DMCs Resource implications Reporting arrangements

Governance: Sound Development Management : The Bank’s concern with governance quality

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Policy context of the Bank’s project lending

The Bank’s principal activity has been—and remains—project lending. In that context, the Bank observed early on that weak implementation capacity in the public sector of borrowing DMCs impacts adversely (and significantly) on the performance of otherwise technically sound projects. The policy environment in the DMC concerned also influences the success of projects. Even well-designed and well-implemented projects can fail if they must function in a poor sector policy framework.¹¹ In view of this, the Bank undertakes policy dialogue and program (or policy-based) lending to complement its project financing activities. Economic and sector work provides the analytical underpinning for policy dialogue and for program and project design, as well as for the more holistic approach to lending systematized in the strategic country planning documents (i.e., country operational strategy studies and country assistance plans). These efforts at helping DMCs “get policies right” are now commonplace in the Bank, and have led it to take greater interest in the capacity of borrowing governments for policy formulation and implementation. While the policy objective in a particular DMC sector might be clear enough, knowledge of the institutional framework and its capability will be helpful in the design of reform measures. In such cases, the Bank seeks to work with the DMC concerned to ensure that the institutional configuration is appropriate for giving effect to the sector policy objectives as agreed upon.

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