World Bank: Unequal distribution of power interferes with policy effectiveness

A new World Bank policy report urges developing countries and international development agencies to rethink their approach to governance, as a key to overcoming challenges related to security, growth, and equity.

According to the 2017 World Development report “governance and the Law explores how unequal distribution of power in a society interferes with policies’ effectiveness. Power asymmetries help explain, for example, why model anti-corruption laws and agencies often fail to curb corruption, why decentralization does not always improve municipal services; or why well-crafted fiscal policies may not reduce volatility and generate long-term savings.”

The report notes that when policies and technical solutions fail to achieve intended outcomes, institutions often take the blame. However, it finds that countries and donors need to think more broadly to improve governance so that policies succeed. It defines better governance as the process through which state and non-state groups interact to design and implement policies, working within a set of formal and informal rules that are shaped by power.

“As demand for effective service delivery, good infrastructure, and fair institutions continues to rise, it is vital that governments use scarce resources as efficiently and transparently as possible,” World Bank Group President Jim Yong Kim said. “This means harnessing private sector expertise, working closely with civil society, and redoubling our efforts in the fight against corruption. Without better governance, our goals of ending extreme poverty and boosting shared prosperity will be out of reach.”

“Government officials do not act in a vacuum. Their decisions reflect the bargaining power of citizens who jockey with each other to advance competing interests,” he said

World Bank Chief Economist, Paul Romer noted further that the report hopes to launch a very important discussion for governments, their countries, and people in the development community about how we can make sure that society is on a path that’s generating progress. We need to confront a complicated political process in every country where power can influence the outcome of that process and we have to ask how can make sure that process leads to progress for everyone.”

The report finds that good policies are often difficult to introduce and implement because certain groups in society who gain from the status quo may be powerful enough to resist the reforms that are needed to break the political equilibrium.