To meet the development challenges of the 1990s, the World Bank has several areas of special emphasis. These Special Operational Emphases are:
Seventy percent of the Bank's research resources now focus on these Special Operational Emphases. The volume of research in these areas has been growing steadily over the past two years, and the Bank's Research Committee has singled out three topics within these areas deserving added effort for fiscal 1990 and beyond. These are the environment, the private sector, and the reform of socialist economies.
The environment. The accelerated development of the Bank's Environmental Program has lent urgency to the need to formulate a coherent research program on environmental issues. To this end, the Research Committee funded a meeting with the Environment Department and a group of environmental experts. This group---David Pearce (University College, London), Partha Dasgupta (Cambridge University), Antony Fisher (University of California), and Karl-Goran Maler (Stockholm School of Economics)---laid the groundwork for a policy and research work program, covering technical, scientific, economic, and behavioral issues. Important economic issues for research are the relationship between environment and economic growth and poverty, the costs of environmental degradation, the integration of environmental concerns in adjustment lending, the use of tax and subsidy policies to reach environmental goals, and international aspects of environmental problems.
Private sector development. Given the importance of the private sector's role in growth, the Bank is increasingly tailoring its policy discussions and lending toward better private sector performance. Questions remain, however, about ways to promote private sector development in developing countries and ways to ensure that private sector activities lead to long-term development and growth. "Getting the prices right" and policy reforms, though important, are often not enough to foster healthy private sector growth. Entrepreneurship, a well-functioning infrastructure, access to finance, and sound regulatory systems are critical. Individually, these issues are complex. Together, as a policy package, they present design, coordination, and management challenges, including difficult issues of sequencing. Research is needed to guide Bank staff on ways to design policy packages that will work.
The Public Sector Management and Private Sector Development Division recently organized a workshop to explore private sector development with participants from the U.S. Agency for International Development, the United Nations Development Program, the International Finance Corporation, the Multilateral Investment Guarantee Agency, Bank Operations and the Policy, Research, and External Affairs Complex, and academics and other researchers working on private sector development. They proposed an agenda for six areas of research: privatization; regulatory reform; financial sector development; entrepreneurial development; private delivery of public services; and improving the environment for private sector development. The research topics include some that might be explored through policy or operational work as well as through Bank-sponsored research.
Reform of socialist economies. To address the remarkable developments and challenges to economic analysis and policy under way in almost every centrally planned economy, the Bank will investigate the history of reform in planned economies and the challenges for the future. Spurred by a growing interest of the Europe, Middle East, and North Africa and Asia Regions and by Policy, Research, and External Affairs, the preliminary phases of several research efforts on socialist economic issues are now under way.
Various parts of the Bank will accelerate and expand these efforts in the coming year, starting with a series of workshops, conferences, and policy seminars to produce a research plan on socialist economies. Development Economics and the Europe, Middle East, North Africa Region co-sponsored a workshop suggesting such promising areas for future research as enterprise reform; macroeconomic issues; problems of transition; and factor markets and social issues.
The International Economics Department held a conference to focus on the macroeconomic performance of selected centrally planned economies and of Yugoslavia. The conference sought suggestions for research that would improve the international comparability of centrally planned economic statistics, which would simplify economic analysis and policy design.
With a focus on incentives and organizational constraints facing agriculture in Eastern Europe and the USSR, a conference planned for mid-1990 will investigate another important initiative for agricultural reform in socialist countries.
The Research Committee, through the Research Administrator's Office, will work closely with Bank staff---especially the new Socialist Economies Unit---and with external consultants to make such research on these special initiatives an integral part of the Bank's regular divisional work programs.
Regional emphasis. Sub-Saharan Africa's development problems are also receiving more attention from Bank researchers. Two important new initiatives---one in the Development Economics Vice Presidency and one in the Africa Region---complement ongoing research. The African Research Initiative group---a joint effort of the Africa Region and Policy, Research, and External Affairs Complex---is developing a special program to improve research on African policy issues. Task forces have been set up in areas of common interest to discuss research needs, to review work under way, to map out a common strategy, and to improve research in main areas.
The sponsors of the initiative also discussed and endorsed a conference on African economic issues for late spring 1990. The conference---to be held in Nairobi to encourage participation by African researchers---will be based on the substantial amount of work under way in the Bank on African economic issues. A second conference is planned for spring 1990 in Washington under the theme "African External Finance in the 1990s." This conference will disseminate the results of research on alternative sources of external finance for Sub-Saharan Africa.