The World Bank and Governance: The Bank’s Efforts to Help Developing Countries Build State Capacity

by Sabrina I. Pacifici on November 24, 2012

The World Bank and Governance: The Bank’s Efforts to Help Developing Countries Build State Capacity. Alain de Janvry and Jean-Jacques Dethier, October 2012

  • “A proactive and effective state is essential for development: it is needed to create a favorable investment climate and to facilitate poor people’s empowerment and their participation in economic life.3 Governance and public sector management shape both the investment climate and the efficiency of delivery of the basic services that are at the center of the development agenda. Development requires an environment where markets can function and contracts are honored, and the maintenance of macroeconomic stability, infrastructure, defense, financial systems, and sound administrative, legal, and regulatory structures—which are all tasks for a government. The institutional framework of a country—information, property rights, legal systems, financial systems, and so on—should promote the functioning of markets and the welfare of its citizens. Physical infrastructure (public transportation, power, telecomm, and water) and basic public services (particularly in education and health, which are central to empowerment) have a vital influence on the ability of enterprises or farms to operate effectively as well as on the ability of individuals to participate. All these services depend on public action: government must either deliver them directly or create a regulatory and competition framework that channels private sector participation. The responsibilities of a government also include fostering health and education as well as the social, political, and physical environment that helps people participate in the decisions that affect their lives in the economic and social realm. The story of development is not about government getting out of the way, but about getting government to do the right things in the right way”
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