The author examines the reasons developing countries are reexamining the respective roles of the private sector, civil society, and various levels of government--and considering new fiscal arrangements between national and lower levels of government. Decentralization may be particularly...

The purpose of this paper is to briefly develop the following points: (1) The argument that the size of the public sector needs to be drastically reduced has probably been taken too far, without really analyzing the full consequences of the shift. Often the dismantling of some functions implies...

The author presents the view that informal economies arise when governments impose excessive taxes and regulations that they are unable to enforce. The author studies the determinants and effects of the informal sector using an endogenous growth model whose production technology depends...

A foreign aid or foreign lending policy that focuses exclusively on project financing may have unintended consequences, report the authors. New research shows that aid intended for crucial social and economic sectors often merely substitutes for spending that recipient governments would have...

World Bank lending and advice to support institutional and policy reform of public expenditure management is of recent and limited, but rapidly expanding scope. The paper begins with a brief overview of the Bank's recent work on public expenditures. The analysis indicates the lack of a...

When foreign aid undermines institutional development aid recipients can exhibit the symptoms of aid"dependence"- benefiting from aid in the short term but damaged by it in the long term. The authors find that one equilibrium outcome can be high aid and weak institutions, even when donors and...

The public sector's performance in the Caribbean varies, in reducing poverty and in creating an enabling environment for growth. Barbados and the Bahamas have been the high performers, Guyana and the Dominican Republic have been sluggish, and the other Caribbean countries fall in between. In the...

The authors examine how institutional arrangements affect incentives that govern the size, allocation, and use of budgetary resources. They use a diagnostic questionnaire to elicit the relative strengths and weaknesses of specific systems in terms of instilling fiscal discipline, strategically...

The author reports how a"report card"on public services in the Indian city of Bangalore was used by citizen groups to creategreater public awareness about the poor performance of public service providers and to challenge them to be more efficient and responsive to their customers. The report...

Using the lens of social capital-especially bridging or cross-cutting ties that cut across social groups and between social groups and government-provides new insights into policy design. Solidarity within social groups creates ties (bonding social capital) that bring people and resources...