From public sector management to governance: Changing ideas about economic development, the state, and the World Bank

The World Bank is now promoting good governance in developing countries. This study shows how the Bank adopted governance programs as a defensive measure in response to criticisms of its development activities and to reflect the growing interest in institutions in economics, the Bank's dominant intellectual influence. However the economic bias of the Bank's approach to governance as well as its aspirations to political neutrality hinder its efforts, increasing the gap between the Bank's rhetoric about governance and what it accomplishes. The governance agenda includes public management, government accountability, transparency of government processes, rule of law, and corruption. While the Bank has been concerned with the management of development projects and government programs since its inception, the governance agenda represents a significant change in direction for an institution that has presented itself as a politically neutral expert in economic development. The programs parallel changes in the economic assistance programs of its major shareholders and the ideas of economists about institutions and governance. The Bank has used a provision in its articles barring intervention in the politics of borrowing states as a way of limiting governance programs in order to maintain its image of political neutrality in dealing with borrowers. In considering the promotion of good governance the study employs Risse and Sikkink's spiral model and Kahler's bargaining model to explore the relationship between power and ideas in the promotion of ideas by international organizations. The Bank's experience in exercising power through loan conditionality has been of limited success because of its reluctance to terminate relationships with states that do not complete governance reforms and its unwillingness to become involved in the politics of borrowers. Its efforts to promote its ideas through technical assistance, while more promising where the technology is settled and political commitment strong, have been hindered by the bias of the Bank towards ideas based in economics and its lack of knowledge of the social and political context of governance problems.