Analysis of the World Bank and Eurodad reports on the Bank's use of conditionality

This note analyzes the two reports Conditionality in Development Policy Lending (World Bank, December 2007) and Untying the knots: How the Word Bank is falling to deliver real change on conditionality (Eurodad 2007 ). Both reports show that progress has been made regarding World Bank adherence to the Good Practice Principles, but their view on the degree of this progress differs. Particularly, the reports differ with respect to their evaluation of progress on ‘customization’ and ‘criticality’: the Eurodad report finds a higher overall number of conditionalities and a higher frequency of ‘sensitive policy reforms’. The main reasons for contending views are first that the two reports are not based on the same dataset/material. Second, the two reports define ‘sensitive policy reforms’ differently. Finally, the assessment of the Eurodad report is based on whether the reform programs include sensitive policy issues, whereas the World Bank limits itself to evaluating whether there are policy conditionalities that call for such reforms. The analysis points to strengths as well as weaknesses in both reports. It highlights a certain ‘slack’ in the application of the definitions to categorize policy conditionalities in the World Bank report, and a lack of transparency with regards to categorization of operations in the Eurodad report. The analysis furthermore points to three areas where Norway could encourage further improvements in World Bank practices: ownership, customization and criticality.