How Does the World Bank Influence the Development Policy Priorities of Low-Income and Lower-Middle Income Countries?

Abstract

This study investigates the World Bank's use of lending and non-lending instruments to affect the policy priorities of developing countries. In a typical year, the World Bank lends more than $30 billion to its client countries. It also spends approximately $200 million on the provision of analytical and advisory products each year. However, insufficiently granular data on the nature, timing, and distribution of these analytical and advisory products and the policy priorities of client countries has made it difficult for policymakers and scholars to understand which World Bank instruments are most useful for effectuating change in the direction of government policy. With new data on the delivery of analytical and advisory products and micro-level survey data from 1,244 public sector officials in 121 developing countries, this study demonstrates that the organization?s non-lending instruments are more effective than its lending instruments at influencing the policy priorities of client countries. The World Bank's analytical and advisory products not only affect the direction of government policy, but also its design and implementation.