Development involves change. It requires learning about what works and what does not work in a particular circumstance, and then building the capacity for applying that knowledge throughout an economy. By taking what has been learned and using the available instruments and resources, the Bank can achieve outcomes that are appropriate to the challenges at hand. In its decades of experience, the Bank has recognized several common factors associated with overall progress in development. These factors—the basis for the Bank’s strategy—are the following:

• An active state with good governance in both the public and private sectors fosters an environment where contracts are enforced and markets can function; basic infrastructure works; there are provisions for adequate health, education, and social protection; and people are able to participate in decisions that affect their lives.
• Empowerment ensures that all people have the ability to shape their own lives, by providing opportunity and security and by fostering effective participation and social inclusion.
• Economic growth is essential because countries that have reduced poverty most effectively are those that have grown the fastest. There has been no example of successful development without sustained periods of high per capita growth of output.
• It is necessary to have a vital private sector to drive sustained economic growth, with small and medium enterprises playing a particularly important role in generating employment opportunities for poor people.
• A financial sector policy that is rational and appropriate to the country is essential, as is the removal of barriers to international trade so that developing-country exports can contribute to growth.
• Finally, the country and society need to have ownership of the development agenda to reflect the country’s specific circumstances and political economy.