Publication: Association of World Bank Policy Lending with Social Development Policies and Institutions
Date
2017-11
ISSN
Published
2017-11
Author(s)
Bogetic, Zeljko
Smets, Lodewijk
Abstract
Do World Bank policy loans that are
focused on social policy reform help improve social policies
and institutions in borrower countries? To help answer this
question, this paper provides new empirical evidence of the
association between World Bank policy lending and measures
of the quality of borrower countries' social policies
and institutions that such lending supports. Results from
estimating a two-stage least squares model indicate that the
World Bank's policy lending has a significantly
positive effect on the quality of social policies and
institutions. The analysis also finds tentative evidence
that loan conditions related to social protection and
environmental sustainability are more effective in
influencing social policies and institutions than those
related to equity of public resource use and health and
education. In general, the findings are confirmed when
estimating a model with a lagged variable of interest. The
results suggest that the right kind of conditionality can
help improve social policies, therefore providing an
important lever for reaching the twin goals of ending
extreme poverty and stimulating shared prosperity.
Citation
“Bogetic, Zeljko; Smets, Lodewijk. 2017. Association of World Bank Policy Lending with Social Development Policies and Institutions; Association of World Bank Policy Lending with Social Development Policies and Institutions. Policy Research Working Paper;No. 8263. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/28924 License: CC BY 3.0 IGO.”
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