Catalog

	Table of Contents
p. 14 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

---

The East Asian experience

The high-performing economies of the Bank’s region are now widely accepted as being prime examples of sound development management. These DMCs have not only registered high rates of economic growth on a consistent basis, they have also been effective in improving their social indicators (Table 1). Remarkably, these DMCs also “achieved unusually low and declining levels of inequality, contrary to historical experience and contemporary evidence in other regions.” The positive association between growth and low inequality in these high-performing economies, and the contrast with other economies, has been well illustrated by the World Bank. Forty economies were ranked by the ratio of the income share of the richest fifth of the population to the income share of the poorest fifth and by per capita real gross domestic product (GDP) growth during 1965–1989. Of the seven high-growth, low-inequality economies, six were developing economies in East Asia (i.e., Hong Kong, China; Indonesia; Republic of Korea; Singapore; Taipei,China; and Thailand) and the seventh was Japan (Figure 1).

The development record of the East Asian high performers is clearly of considerable interest to the Bank, and to other DMCs. Their achievement of balanced and equitable development (“shared growth” is the expression of the World Bank) suggests high-quality governance. Lessons drawn from the East Asian experience could be useful for other DMCs, and the Bank is, therefore, implementing a regional TA project for this purpose.¹⁹ This TA project is expected, among other things, to throw light on the degree to which the success of these high-performers reflected (i) accountability of public officials, (ii) an effective public/ private sector interface, (iii) predictable application of rules and regulations (or changes thereto), and (iv) sharing of market information between the government and private actors.

Back Project quality	Next Outlook for the future