This report considers the factors which have led to a proliferation of conditionality and the growing acceptance that it is not an effective tool for persuading governments to make reforms. It proposes that an alternative is to encourage “ownership” and to base lending agreements on “poverty focused” programmes developed at the national level (1999).
Government officials met the World Bank in March to discuss new criteria for allocating its IDA (soft loan) resources among countries.
Brazilian NGOs, trade unions, students and opposition parties protested outside the World Bank’s office in Brasilia against the government’s agreement with the International Monetary Fund (IMF) and the Bank’s decision to suspend loans to two state governments.
A discussion and critique of the main points in a prominent World Bank report on aid policy and conditionality - “Assessing Aid, What Works, What Doesn’t and Why”. The Bank’s report is very frank about the many failures of aid financing, but its proposals of targeting finance to good performing countries are controversial (1999).
The IMF with multilateral banks and other donors has agreed a $41bn package to help Brazil fend off international currency speculators.
In response to the external ESAF Review, the World Bank is to collaborate with the IMF in pilot projects in Nicaragua, Vietnam, Tajikistan, Ethiopia, Cameroon and Zimbabwe over the next 12-18 months.
More flexibility and a new approach was suggested in the external review of the Enhanced Structural Adjustment Facility (IMF loans to poorer countries) published in March.
A country assistance strategy (CAS) identifies “high”, “base” and “low” case lending scenarios - which one a country initially receives depends on its economic prospects.