Research

Country research forms the core of the Bank’s knowledge base, and it culminates in a number of knowledge products, including policy research working papers, development data, development prospects analysis, and a wide range of development publications. Three of these research activities are highlighted here.

Investment Climate. The Development Economics Group (DEC) works closely with other Bank units and local partners to carry out investment climate surveys—large, random surveys of private firms in specific sectors, such as garments, electronics, and information technology. This research helps clients understand the main problems in their investment climates, identify the reforms that would effect the biggest results, and implement those changes.

The surveys focus on the key bottlenecks that firms face, such as poor infrastructure, inefficient government bureaucracy, and corruption. Because these samples are large, Bank researchers can relate differences in firm performance to various investment climate indicators. From this work, they can conduct thought experiments: for example, estimating what Bangladeshi firms would experience in terms of faster growth if Bangladesh’s investment climate reached the mean level of China’s investment climate. Thus, one aspect of the Bank’s work is to measure the investment climate objectively and link it to firm performance so that countries (and cities within countries) can gauge their progress and identify priority areas for reform.

A more important objective, however, is to stimulate real change. These surveys can only be done with the close cooperation of the business community—both local and foreign—in each country. A second stage in the survey process is to work with these private sector partners to bring this information into the political debate and to identify specific reforms that are priorities for private sector development. The World Bank and other donor assistance can then support the identified reforms. (See also “Supporting Private Sector Development and Infrastructure” in chapter 4.)

World Development Report. This annual flagship publication incorporates research from across the Bank. World Development Report 2004: Making Services Work for Poor People examines how education, health, water, energy, and sanitation services are failing poor people because of inadequate access, insufficient quantity, and poor quality. The service delivery chain involves three sets of actors: poor people as clients, the providers of services, and the politicians who set policy for service delivery. Improving services for poor people requires reforming and strengthening the three relationships in the chain—between poor people and providers, between poor people and policymakers, and between policymakers and providers. Governments, citizens, and donors can make services work by putting poor people at the center of service provision, by enabling them to monitor service providers, by amplifying their voices in policymaking, and by strengthening the incentives for providers to serve poor people.

Poverty Research. Since 1993 the Bank’s Poverty Reduction and Economic Management network has produced an annual poverty progress report, Poverty Reduction and the World Bank. The report reviews the effect of the Bank’s activities on poverty reduction. (See www.worldbank.org/poverty.)

Economic and Sector Work

The Bank’s approach to creating, sharing, and applying knowledge helps augment its IBRD and IDA lending activities, generating a greater impact on development. Bank advisory services include economic and sector work (ESW). ESW products include core diagnostic reports that underpin the analysis for the Country Assistance Strategy (CAS) and the Bank’s overall policy dialogue; other diagnostic work that provides upstream analysis for formulating and implementing effective lending programs and assessing their results; country advisory and regional reports that provide advice on special topics; and other more informal products, including policy notes, and events such as workshops and conferences. As the main analytical and advisory tool, the ESW program is closely monitored by the Bank. Table 2.1 shows ESW products delivered by all regions from fiscal 1998 through fiscal 2003.

In recent years core diagnostic work has been a fairly constant share of the Bank’s ESW program, reflecting the high priority assigned to this product line (see table 2.1). At the same time there has been a pronounced shift from other diagnostic and advisory reports to informal products, the result of an increased emphasis in Bank work on capacity building, knowledge dissemination, and the provision of “just-in-time” advice to clients. Financial and private sector development, public sector governance, and economic management were themes with the largest share of total ESW output in fiscal 2003. The Bank also carried out substantial ESW focusing on human development, social protection, risk management, trade, and rural development, which help provide the diagnostic bases for project design and country programming. More than 25 percent of the fiscal 2003 program was delivered by Africa, followed by Europe and Central Asia (24 percent), and East Asia and the Pacific (14 percent). Country reports were supplemented by regional reports concentrating on such issues as regional trade and transportation, health, income distribution, and achieving the Millennium Development Goals (MDGs). ESW is being more tightly integrated into the overall country assistance program, with increasing emphasis on country ownership, participatory processes, partnerships, and capacity building. For example, the Middle East and North Africa region and East Asia and the Pacific focused systematically on programmatic ESW, and the Middle East and North Africa deepened its involvement in the reimbursable Technical Cooperation Program along with its existing and more traditional ESW portfolio. In fiscal 2003, 591 products were delivered to country clients, compared with 457 products delivered in fiscal 2002. Of these, 120 were core diagnostic reports, such as poverty assessments, public expenditure reviews, country economic memoranda and development policy reviews, country financial accountability assessments, and country procurement assessments. These help underpin CASs, Poverty Reduction Support Credits (PRSCs), and other adjustment lending, and help facilitate policy dialogue with clients.

Sector Strategy Papers

Sector Strategy Papers (SSPs) examine the major economic sectors and thematic areas in which the Bank is engaged. These comprehensive reports are crafted after thorough research and extensive dialogue among staff and major stakeholders, and they represent a comprehensive body of knowledge. They provide strategic options and guidance for operations staff. In addition, they identify the Bank’s strategic priorities for each of the areas of work and present a plan for carrying out the SSP in the context of CASs. Bank management regularly monitors how well the SSPs are being implemented.

In fiscal 2003 the Bank produced three SSPs: “Reaching the Rural Poor,” “Water Resources Sector Strategy: Strategic Directions for World Bank Engagement,” and “A Revised Forest Strategy for the World Bank Group.”

“Reaching the Rural Poor” renewed the Bank’s approach to agriculture and rural development by adopting holistic pro-poor rural development; fostering rural economic growth not only through agricultural but also through nonfarm economic activities and the private sector; promoting cross-sectoral, long-term approaches by addressing the entire rural space; and increasing broad-based stakeholder participation in projects and programs.

The water resources SSP emphasized the critical role of water resources management and development in poverty reduction and sustainable economic growth, and called for engaging in both management and development of water resources infrastructure; taking the political economy of reform into account; developing and maintaining appropriate stocks of well-performing hydraulic infrastructure mobilizing both public and private financing; and meeting appropriate environmental and social safeguards.

The revised forest strategy, aimed at making an effective contribution to poverty reduction and environmental management, was built on three interrelated pillars: harnessing the potential of forests to reduce poverty, integrating forests in sustainable economic development, and protecting vital local and global environmental services and values.

Capacity Building: The World Bank Institute

The World Bank Institute (WBI) builds capacity in client countries through training courses, policy advice, knowledge products, and services aimed at helping countries achieve their development goals. WBI’s services are designed to help government and civil society stakeholders upgrade their skills, acquire global knowledge from multiple sources, and then adapt the new knowledge to their country institutions and policies. WBI also helps World Bank operations teams design and deliver the capacity-building components of lending projects. In fiscal 2003 WBI delivered programs in the key corporate priority areas of human development, poverty reduction and economic management, environmentally sustainable development, and finance and private sector development.

In fiscal 2003 WBI adopted a country-focused business model, customizing its capacity-building programs to countries’ priority needs, applying best-practice pedagogy, maintaining a sustained presence at the country level, and collaborating with key figures who can implement policy decisions. The Bank identified 41 countries for customized learning and knowledge programs. Among them were Afghanistan, Somalia, and Sudan, where knowledge and learning activities dominate the Bank’s engagement strategy; Albania, Kenya, and the Lao People’s Democratic Republic, where learning programs are particularly important to complement and support other Bank activities; and Brazil, China, and India, large countries where many people live in poverty and where there is a strong demand for strategic management of the knowledge economy.

Capacity-enhancement needs assessments—comprehensive, country-owned reviews of capacity gaps and priorities—are being pilot-tested in countries such as Burkina Faso, Nigeria, and Tajikistan. When gaps and needs have been assessed, WBI prepares a strategy for how best to address them and to define WBI’s role, which becomes part of the Bank’s CAS.

Among WBI’s other products is the Knowledge for Development Program, which provides client countries with an analysis of their preparedness for the knowledge economy, using a set of 69 structural and qualitative variables to benchmark how an economy compares with its neighbors, competitors, and those countries it wishes to emulate. This knowledge assessment helps identify the problems and opportunities that a country faces.

To increase its reach, WBI works with partners and makes use of distance learning tools and technologies. It helps clients gain access to information resources through e-learning, Web-casting facilities (B-SPAN), Web sites, and the Global Development Learning Network, which reached more than 36,000 participants in fiscal 2003 via videoconference-based distance learning (see box 2.1). WBI also helps its clients gain access to global knowledge through knowledge-sharing services and tools for building communities of learning and practice. The Bank’s Knowledge and Learning Advisory Service, managed by WBI, provides Bank staff with access to best practices across the institution.