What is “Country Ownership"? Do Social and Environmental Safeguards Destroy It? - Group of 20

Mother and daughter are carrying a heavy load of beans. iStock

The Case of the World Bank’s Program-for-Results

Summary

Governments and development finance institutions, such as the World Bank, should raise (i.e., “harmonize upwards”) important norms and standards relating to: transparency, participation, social, environmental, and anti-corruption policies. In order to achieve positive development results, such standards are necessary.

However, in some respects, governments and development finance institutions view norms and standards in a negative light. For instance, some fear that they will be at a competitive disadvantage relative to countries or institutions with lower norms and standards. Some recipient governments believe that norms and standards are an imposition by Western nations that handicaps their development progress. Perhaps the strongest argument against norms and standards is that they undermine “country ownership.” However, some supporters of “country ownership” are backers of the executive branch (the bureaucrats) of recipient countries, not citizens or their elected representatives.

This paper traces the way in which different processes (the “Aid Effectiveness” Forums) and institutions (the G20 and the Multilateral Development Banks (MDBs)) pursue “country ownership.” It focuses on a new World Bank lending instrument – the Program-for-Results (PforR) which will be used to finance government programs in sectors (e.g., industry, agriculture, health). The standards that the World Bank has employed for decades (e.g., its set of 10 environmental and social safeguards, plus its financial management and procurement standards) do not apply to PforR operations. This is a mistake. The Bank should use these standards and safeguards for PforR operations and to strengthen the “country systems” (e.g., policies and regulations) in recipient countries.

Due to pressure from the U.S. Congress, the Bank is using the PforR instrument in operations totaling only 5% of its total financial commitments for the next two years. We believe that safeguards and standards should be applied to all PforR operations before this “cap” is lifted.

The paper concludes that a choice between “country ownership,” on the one hand, and norms and standards, on the other, is a “false choice.” Indeed, “country ownership” and forms of development assistance, such as support for national and sector budgets, are compatible with standards relating to transparency, participation, financial management, and social and environmental protection.

Click here to read What is 'Country Ownership'? (20 pages, pdf, 656KB)