A case for aid: building consensus for development by James D. Wolfensohn

By James D. Wolfensohn

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The outcomes of Bank lending have improved steadily. Project outcomes have improved sharply over the past decade. Despite the growing complexity and more demanding nature of its development agenda, the Bank has increased its share of projects rated as satisfactory from well below 60 percent in the late 1980s to above 80 percent today. The Bank has increased its effectiveness by incorporating lessons from experience. These improvements in outcomes come as a result of attempts to learn from experience and adapt to changing circumstances.

40 The Role and Effectiveness of Development Assistance These six countries provide recent examples of Bank-supported progress, but the past 50 years of development experience also provide examples—such as the Republic of Korea and Botswana—that illustrate how effective aid can be in supporting reform. Korea, for example, progressed from borrowing from the International Development Association (IDA), the Bank’s soft-loan facility for the poorest countries, to borrowing from the International Bank for Reconstruction and Development (IBRD), the lending arm for middle-income countries, and finally to borrowing solely in private markets.

Activities included aiding macroeconomic reforms, supporting the creation of an institutional and regulatory framework, helping with the restructuring and privatization of industries, upgrading infrastructure with private-sector participation, and helping to restore Poland’s creditworthiness. Finally, the Bank also helped to improve public understanding of the government’s economic strategy. • Vietnam. Vietnam has also moved strongly to reform its economy and reduce poverty over the past dozen years, beginning when it was still politically and economically estranged from major donors and therefore could not receive large-scale aid.

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