New strategy emphasizes country ownership, comprehensive framework for development
| Pages | 150-152 |
Page 150
Over the past fifty years, the approach to development assistance has undergone a major shift, moving from a narrow focus on macroeconomic stabilization and liberalization to a comprehensive framework, encompassing all aspects of the economy— including social and environmental issues and poverty reduction—and tailored to the specific circumstances of each country. Along with this comprehensive approach has come the recognition that ownership of the development process has to lie with the people and their government, not solely with donors or the aid-dispensing agencies. Much of the discussion at the Annual [World] Bank Conference on Development Economics (ABCDE), held in Washington on April 18–20, centered on these new directions for development assistance, partnership, and cooperation at the national and international levels. Following are some highlights from the conference.
Development is possible but far from inevitable, Joseph Stiglitz, former chief economist at the World Bank, said in a keynote address, given on April 18. Unfortunately, he added, there is no magic formula that ensures success. Discussion continues about the extent to which policies pursued in recent years have promoted economic growth, Stiglitz said. However, there is little debate that, at least in some instances, the policies and the manner in which they have been imposed have increased economic insecurity and people’s sense of powerlessness.
Stiglitz said it is now recognized that long-term sustainable growth requires a consensus behind the reform policies. These policies cannot, he stressed, be imposed from the outside. This is why external financial assistance tied to externally imposed conditions has not always been successful. Meaningful democratic processes, combined with policies that promote equity, can enhance consensus building and a sense of inclusion, he suggested.
The developmental transformation also entails more than a solution of the technical economic problems leading to increased efficiency and resource mobilization—as important as this is, Stiglitz observed. In our thinking about development, he added, we have gone beyond projects and have begun to focus on institutions, such as those that promote competition and good governance in the public and private sectors. Poverty reduction and a more equitable distribution of income have also assumed an importance not only as an end in themselves but also as a means of achieving stronger economic performance, he concluded.
Focusing on the effectiveness of aid in the development process, Paul Collier of the World Bank said that progress in poverty reduction depends on policy and institutional changes. In the past, the World Bank’s approach to inducing such changes was to provide aid in return for explicit negotiated commitments to policy reform. The underlying theory was that...
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