Unfulfilled promises: reconsidering World Bank assistance projects as drivers of inclusive development in sub-Saharan Africa

Abstract

ABSTRACT ‘Urban bias’ has been a common criticism of World Bank (WB) assistance, but to what extent this will lead to non-inclusive development remains unclear. Measuring the multidimensional poverty gap of rural individuals in 31 sub-Saharan Africa (SSA) countries compared to the average level of urban areas in their respective first-order administrative divisions, we introduce a spatial-temporal estimation strategy and explore whether and how the WB assistance projects from 2000 to 2014 can impact SSA’s inclusive growth. Our findings suggest that while WB assistance promotes local economic growth and reduces poverty, it widens the poverty gaps between urban and rural, and even among different income groups within urban areas. Furthermore, our mechanism analysis reveals that the expanding opportunity gap between rural and urban residents is a critical channel for the non-inclusiveness of WB assistance.