Governance and Political-Economy in WBG Growth Analysis Kai Kaiser & Shahrooz Badkoubei Applied Inclusive Growth Analysis Day 4, March 26, 2009
Binding Constraints in Practice • Survey of Recent CEM Practice • FY 2007-8: Grey/Quasi-Grey Cover • Desk Review & Follow-up Dialogue with TTLs • Various Methodologies • 8 HRV Approach • 1 Multidimensional • Policy Priorities Varied • Growth focus: acceleration, diversification sustainability, inclusive, pro-poor…
Objectives • Identify Reform Challenges in Practice • Country Specificity • Examine how GPE being addressed for country growth policy dialogue • Develop resource materials for task teams
Caveats • CEM Categorization Only Indicative • Many CEMs don’t use explicit (HRV) binding constraints to growth methodology • Constraints time-specific • Impacts of Global Economic Crisis • GPE Dialogue May Be Off-Line • Not explicit in Grey Cover CEMs • Implementation counterparts problem…
GPE & “Second Best” Institutions • Differentiate Form from Function • E.g., China’s Reforms • Shift from Normative/Presumptive • Good Enough Governance (Grindle) • Contextual Fit Which forms are effective and politically feasible?
Findings • Governance, Political-Economy, Institutional Issues Inherent to All Binding Constraints • Addressing constraint requires technical & GPE skills • “Governance/micro-risks” identification and remedies diffuse • Clarify terminology • Sharpen diagnostics • Need to document value added • Don’t erode CEM “objectivity” • Led to alternative/succesfull engagement
Resources Governance & Political-Economy for Growth Analysis SharePoint Intranet Site http://connect.worldbank.org/units/prem/PD-GPEA/pdgpe/default.aspx Selected References Rodrik, Dani, (2008), Second Best Institutions, Cambridge, MA: Harvard University (mimeo)