Good Governance within the World Bank: Assessing Recent Reforms

Abstract

Using the concept of good governance, this paper assesses how voting rules in the World Bank (IBRD) determine members’ abilities to influence the formation of winning coalitions in the Executive Board. In weighted voting systems, the percentage of votes held by an actor does not adequately measure its ability to affect outcomes because voting weights do not account for either the possible number of coalitions that may form or the number of votes needed to pass a resolution. In short, weighted voting systems cannot be straightforwardly analyzed with reference to voting weights but instead require the determination of relative voting power. Using multiple measures of a priori voting power, data are presented for before and after recent voice reforms. Results indicate that the United States, as expected, holds the largest share of voting power. Also, as expected, most borrowing members have little voting power. Unexpectedly, in several voting groups a single member is able to ensure its election to the Board. Hence, other members of these voting groups have no formal influence on the Board. The paper concludes by reflecting on the implications of voting power analysis for the concept of good governance within the World Bank.

Keywords: World Bank, good governance, voting power analysis, voice reforms

JEL Classification: F59, F55, C71, F34, H77, F02