World Bank Experience Research Articles

Investment Retention Mechanisms: Rationale and Implementation Experience

This contribution highlights the importance of institutional dispute prevention not just to prevent the proliferation of formal legal disputes between states and foreign investors, but also to preserve the relationship between investors and states and enable investment retention and expansion. Drawing from empirical studies and survey findings, as well as the World Bank's country experience of working on investment policy and promotion frameworks, this contribution provides an overview of the World Bank's experience in implementing such mechanisms globally.1

Delivering Better Outcomes in Education: The World Bank's Experience

The following addresses the research question: Do World Bank supported education projects achieve better outcomes when there is deeper attention to designing monitoring and evaluation systems during project design?The paper draws on a recently constructed database of World Bank investment projects in the education sector. Ratings of these projects’ M&E and their outcomes will be compared to see whether there is a correlation between high M&E ratings, and better outcomes. This pattern has been observed in other service areas supported by the Bank. Further analysis will look at other factors associated with better outcomes, to determine their importance relative to the use of M&E systems. The next step will be to analyze detailed project components to see if there are design features common to high performing projects with effective M&E and other outcome enabling features that are missing in weaker performing projects. Case studies are then introduced to illustrate how this can be brought about through implementation.The findings will be of interest to World Bank operational staff, education professionals, client governments, and other development partners. Evaluations of World Bank projects have shown a decline in outcome ratings in recent years. Improvements in M&E and other features may point the way to reversing this trend. We expect that when the enabling environment encourages experimentation and the use of tight feedback mechanisms, constant communication makes it possible for project managers to make real-time changes to projects throughout the project cycle. Feedback mechanisms typically include such measures as evaluation committees, seminars and workshops, automated systems, reporting and follow-up procedures. It is also essential to tailor project components to local factors such as implementation capacity and political dynamics.

Student Loans: The World Bank Experience

Student Loans: The World Bank Experience

THE OPERATIONAL DIMENSIONS OF RESULTS‐BASED FINANCING

SUMMARYAs part of a growing focus on the effectiveness of development assistance from the World Bank and other agencies, new efforts are being made to relate development finance more closely to outcomes achieved rather than to inputs used, through the results‐based financing approach. We provide a framework for analyzing the operational dimensions of results‐based financing, including the conditions that suit this approach, and how best to define, measure, and report results. We review some of the early World Bank experience with this approach. Noting that this approach is as yet not fully tested, we suggest evaluative issues for future research while highlighting strengths and challenges in the range of techniques adopted so far. Copyright © 2014 John Wiley & Sons, Ltd.

Can solar panels leapfrog power grids? The World Bank experience 1992–2009

Abstract Solar photovoltaic systems promise both rural access to electricity and reduction in greenhouse gas emissions. During 1992–2009, the World Bank contributed US$790 million to promote the uptake of off-grid solar home systems in 34 developing countries. This paper reviews the experience of the World Bank involvement in the rural solar photovoltaic market and draws lessons learned. The review finds that World Bank efforts, using quality-contingent producer subsidies and relying on microfinance for consumers, have been effective in stimulating the diffusion of the solar technology although the impact on greenhouse gas reductions is rather limited because of limited energy consumption of off-grid households.

Balancing the Scales: The World Bank Sanctions Process and Access to Remedies

The evolution over the years of the mandates and missions of international organizations has reached an important milestone with the emergence and multiplication in the last decade of procedures and mechanisms having a direct impact on individuals and companies. This has gone together with the call for the creation of international remedies with judicial features. International organizations, including the World Bank, have established sanctions mechanisms in an effort to combat corruption and fraud. They are applicable to companies and individuals involved in activities with international financial institutions through procurement or consultancy activities. The World Bank experience offers an interesting example: the decision to sanction individuals and companies entailed the need to provide access to remedies to such non-state actors. External and internal pressures have pushed the institution into putting in place very quickly a mechanism with judicial features. Due process requirements have had a substantial impact on the profile of remedies available to non-state actors in this area.

On the relationship between tourism and growth in Latin America

In many countries, tourism is used as a strategy to achieve greater economic performance. The potential economic benefits are increased income, both directly and as a result of the multiplier effects of tourism revenues (particularly the informal sector), earnings of foreign exchange, new employment opportunities, access to foreign direct investment and economic diversification ( Markandya A, Taylor T and Pedroso S (2005) . Tourism and sustainable development: Lessons from recent World Bank experience. In: Lanza A, A and Francesco P (eds.) The Economics of Tourism and Sustainable Development. Fondazione Eni Enrico Mattei Series on Economics and the Environment. Cheltenham and Northampton, MA: Elgar., 225–251.;( Nowak J-F and Sahli M (2007) . Coastal tourism and “Dutch disease” in a small tourism economy. Tourism Economics 13(1): 49–65.). Among the costs that investment in tourism may arise we find: inflationary pressure due to tourist demand, costs of infrastructure development and leakages to international investors or corporations. In particular, tourism specialization can help to explain the observed high growth rates of small island’s economies. While there is little literature that focus on the relationship between tourism and economic growth, and the associated evidence is conflicting, in the economics literature, the causal relationship between trade and growth is well established. Openness fosters growth through a number of channels, including improved resources allocation, higher degree of competition, rapid acquisition of knowledge and innovation and lower levels of rent-seeking and corruption ( Winters, 2007 ). Thus, this paper investigates the relationship between tourism and trade in order to determine the contribution of the tourism sector to the economic growth of Latin America and the Caribbean. Specifically, it uses cointegration and vector autoregressive techniques for testing the short/long-run relationship between tourism and trade. Due to the lack of systematic data in the area, six countries have been selected and analyzed: specifically, Argentina, Dominican Republic, Mexico, Nicaragua, Chile and Venezuela. Moreover, this study uses unadjusted seasonal data, thus considering possible unit roots at different frequencies.

Minding the gap: World Bank's assistance to power shortage mitigation in the developing world

This paper describes the World Bank's technical assistance and lending efforts in support of developing countries facing power shortages. The paper reviews the World Bank's experience in helping governments to mitigate power shortages in Africa, South Asia, East Asia, and Latin America regions. The paper stresses the need to consider each power “crunch” on an individual basis, and describes the process used in diagnosing a shortage situation and prescribing mitigation strategies. Several brief case studies are presented, including Botswana, Brazil, Uganda, and South Africa. The political and customer-centric dimensions of power shortage mitigation are briefly described, with suggestions for minimizing the socio-economic impacts of power shortages on the urban and rural poors. The paper concludes that an integrated supply–demand portfolio approach works best, and within the portfolio a mix of market-based rationing, emergency mobilization of customer-owned generation, interruptible rates, load control, and energy efficient lighting should be sought. Although the best formulation will vary according to market structure, demand composition, and nature of the crisis, World Bank practitioners have found one program that works almost everywhere to produce fast and effective results – mass market Compact Fluorescent Lamp (CFL) replacement programs.

Poverty Alleviation and Sustainable Development: The Role of Social Capital

Developing countries are facing dilemmas such as un-sustainability, and poverty, (especially rural poverty). Poor people are often seen as compelled to exploit their surrounding for short-term survival and are assumed to be the ones most exposed to natural resources degradation. In order that at the first; we review the extensive theoretical literature on social capital, poverty and sustainability and demonstrate the nuanced treatment these concepts have received in this literature. Problem Statement: Current research and observations indicate that (these dilemmas) un-sustainability and rural poverty are linked. The only feasible way out of current crisis is to integrate resources. The linkage among environment/agriculture, poverty and social capital are complex and in many cases, poorly understood. The developing countries have been criticized for their inability to reduce poverty and contribute to sustainable agricultural development. Approach: there is a need for improving of social capital to integrate environment and people to alleviate poverty and receive to sustainable development. Social capital has come to be defined in a variety of ways, all of which have been linked to collective norms, values and relationships reflecting the involvement of human individuals in a common life based on family and community. Results: This study argue that social capital as a concept has over the last decade or more been gaining significance in relation to a number of linked fields of analyses, including the identification of factors influencing educational attainment, explanations of differing levels of participation, rural development and poverty alleviation. Conclusions/Recommendations: social capital enhancement appears to have direct links with farmer education in that community development is generally defined as a social learning process which serves to empower people and to involve them as citizens in collective activities aimed at socio- economic development, poverty alleviation and sustainable development. At the last, base on World Bank experience we offer these strategies such as promoting opportunity; facilitating empowerment and enhancing security to reduce poverty and to achieve sustainable development.

Procurement issues in performance-based contracts: The world bank experience with output-based aid subsidies

This paper focuses on the World Bank's emerging experience with a promising application of performance-based contracts: Output-Based Aid (OBA) subsidies. OBA is the provision of subsidies for the delivery of and access to social or infrastructure services. Under OBA, subsidy payments are tied to measurable performing outputs, leaving the specific methods of achieving these outputs to the service provider's discretion. While creating better risk allocation, more value for users and contracting agencies, and fewer opportunities for corruption than traditional methods, OBA schemes raise new procurement issues that need to be reconciled in order to achieve optimal results. An issue this paper explores is the tension between the need that contracts be "expenditure-based" with the "performance-based" nature of OBA subsidies.

Reform & growth: evaluating the World Bank experience

Reform & growth: evaluating the World Bank experience

International trade and food safety in developing countries

The World Bank has been promoting the concept that access to markets is an important part in the development of its clients i.e. third world countries, and is increasingly demanding attention for the removal of restrictions imposed by developed countries on international trade, especially with respect to developing countries. The majority of trade-limiting factors in developing countries relate to economics, poor infrastructure and lagging skills; food safety is still mainly the responsibility of the consumers. Improving food safety along western standards, however, may carry considerable costs and price food out of reach of the poor. Therefore, introduction of new food safety tools and rules need to be affordable and build on local food management customs rather than simply imposing western standards that are expensive to monitor. World Bank experience of investing in food safety indicates a number of issues that frequently surface, including (i) confusion between quality and safety, (ii) over regulation, (iii) selective enforcement, (iv) lack of integration of food laws and regulations in the overall legislative system, (v) multiplicity of responsible agencies, and (vi) the mismatch between the standards required in OECD- and in an developing-countries. It is recommended to improve awareness, simplify rules, improve skills and infrastructure, adapt food safety monitoring to local conditions, and help formulating HACCPs for niche products from developing countries. It is also recommended to ensure stronger voice of the poor in food safety decisions, and a greater participation of the poor and poor countries in international standard setting organizations.

Surveying Surveys and Questioning Questions: Learning from the World Bank Experience on Firm Surveys

Rigorous data-collection is important for accurate policy analysis. The paucity of data in developing and transition economies makes policy analysis in such countries difficult. The World Bank has attempted to remedy this problem by conducting numerous surveys. This paper explores the rich experiences of the Bank in designing and implementing firm-level surveys. Our exploration leads to a series of lessons and tools that we hope policy makers and researchers can use for creating more effective surveys in the future.

Mainstreaming the social dimension into the overseas development administration: a partial history

AbstractWritten by the first Chief Social Development Adviser of the Overseas Development Administration (now called the Department for International Development), this article describes when, why and how an understanding of the social dimension became mainstreamed into the policy and practice of the British aid programme. Exploring the growth within the context of the changing political aid environment of the final quarter of the last century, the history of social development within the British aid programmes is described from its origins in the mid‐1970s up to 1997. It asks how it was that a new specialist group of social analysts was established as part of the agency's bureaucratic machinery and compares this with the World Bank's experience. The article concludes by briefly considering the challenges facing social development expertise following 1997. Copyright © 2003 John Wiley & Sons, Ltd.

Health impact assessment in international development assistance: the World Bank experience.

Large infrastructure construction and rehabilitation works are the obvious priorities for integrating health impact assessment into the environmental assessment process because of the specific risks generated by the sudden surge in human presence from migratory workers and because of the intrinsic health and safety hazards associated with construction. However other sectors may also generate serious health hazards for example tourism development an activity which is typically funded by the World Bank’s sister organization the International Finance Corporation (IFC). (excerpt)

Constructing Knowledge Societies: New Challenges for Tertiary Education

This report describes how tertiary education contributes to building up a country's capacity for participation in an increasingly knowledge-based world economy and investigates policy options for tertiary education that have the potential to enhance economic growth and reduce poverty. It examines the following questions: What is the importance of tertiary education for economic and social development? How should developing and transition countries position themselves to take full advantage of the potential contribution of tertiary education? How can the World Bank and other development agencies assist in this process? The report draws on ongoing Bank research and analysis on the dynamics of knowledge economies and on science and technology development. Using this background, it explores how countries can adapt and shape their tertiary education systems to confront successfully the combination of new and old challenges in the context of the rising significance for tertiary education of internal and international market forces. It examines the justification for continuing public support of tertiary education and the appropriate role of the state in support of knowledge-driven economic growth. Finally, it reviews the lessons from recent World Bank experience with support of tertiary education, including ways of minimizing the negative political impact of reforms, and makes recommendations for future Bank involvement.

Lessons from success and/or failure of irrigation development

AbstractWorld population is increasing, particularly in the developing countries. Groundwater reserves are being depleted; lands are being degraded. The required increase in food production must come principally from new supplies of water for irrigated lands. If irrigated lands fail to produce the required food, increased destruction of resources and degradation of the environment from increasing slash and burn agriculture is anticipated. Various countries and international agencies have recognized the possibility of future food shortage. This paper presents case studies and includes technical and scientific considerations. In Greece, important considerations were land consolidation, and the incentives provided encouraged private initiative. The construction of large dams facilitated reforestation. In Haiti, flooding and erosion resulting from slash and burn agriculture, and land fragmentation were serious problems. Land redistribution and failure of maintenance resulted in the rapid deterioration and failure of the once prosperous colonial irrigation systems. Agrarian reform and/or the establishment of cooperatives with government landownership produced a rapid decline in irrigated production in various countries. In Honduras, little use has been made of 20 cooperatives financed by the government of Japan and the FAO. Various countries and international agencies have financed resource inventories and project studies and have provided funds for development. However, World Bank experience indicates that favorable laws and policies frequently have more influence on development than the availability of financial assistance. Strength in the rule of law, a free market economy, local and user participation in planning and management, and encouragement of private enterprise are frequently more important than the amount of money available from loans. Some successful training courses are described. A World Water and Climate Atlas is now available and can be used for many planning and risk evaluation purposes. Copyright © 2003 John Wiley & Sons, Ltd.

Biodiversity Conservation in Road Projects: Lessons from World Bank Experience in Latin America

The unprecedented and irreversible loss of biodiversity in modern times is caused primarily by the elimination or degradation of natural habitats. Because the construction and improvement of roads sometimes lead, directly or indirectly, to the loss and degradation of natural habitats, road construction and biodiversity aims are often at odds. However, many potentially serious conflicts between road projects and biodiversity conservation can be avoided. Induced negative impacts can be minimized by careful project siting. Where some natural habitat loss is inevitable, appropriate mitigation may include establishment of strict protection zones alongside the road or compensatory protected areas elsewhere. Such mitigation requires effective collaboration, for example, between the agencies responsible for roads and protected areas. Direct adverse impacts of road works on biodiversity also can be significant but are generally simpler to avoid or mitigate because they are more fully under the control of road construction agencies, contractors, and concessionaires. Biodiversity loss and environmental damage can be considerably reduced when planners and road construction agencies site roads adjacent to existing railways, pipelines, or transmission lines; practice sound road engineering; maintain good drainage and natural water flows; minimize roadside habitat loss; and exercise care in the siting and design of borrow pits, construction camps, and other complementary facilities. Environmental rules for contractors, including transparent penalties for noncompliance, need to be incorporated in bidding documents and contracts. Ideally, road projects are designed and implemented so as to avoid or compensate adequately for any adverse impacts on natural habitats and biodiversity. Through mitigation measures, potentially controversial projects can even produce significant net environmental benefits—a win-win outcome.

Education, Trade Reform and Investment Returns

This paper explores whether education and openness together can improve the development impact of investment projects - based on what we know of the World Bank's lending experience in the past twenty years. A framework is then proposed for the link between education, openness and investment returns. Our empirical results show that formal education, coupled with openness to trade and investment, has a strong positive correlation with investment returns and project performance. Fiscal discipline and good governance raise investment project returns, and corruption hampers project performance.

Reforming Business-Related Laws to Promote Private Sector Development: The World Bank Experience in Africa

The importance of an appropriate legal framework reflecting the cultural, sociopolitical, and economic circumstances of a country is now widely considered to be an important element in the development process. The latest recognition of this link may be found in the Comprehensive Development Framework adopted by the World Bank, where the second pillar underscores the fact that no equitable development is possible without, among other things, an effective system of property, contract, labor, bankruptcy, commercial codes, personal rights laws, and other elements of a comprehensive legal system. This study presents a historical perspective of legal reform programs in Africa, especially after the post-independence period. It then reviews the experience to be discerned from World Bank-financed legal reform projects in Africa, which have the primary objective of promoting private sector development. It focuses primarily on legislative reform, that is, reform of substantive laws and subsidiary legislation, and activities designed to ensure the appropriate application of the new texts, such as capacity building and strengthening of legal institutions, including the ministries responsible for justice, the judiciary, and the legal profession.