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One topic per Month will
be discussed indepth on this page.
January 2007-Topic
of the Month:
KURT LEWIN[i]
Kurt Lewin's (1890-1947) work had a profound impact on social psychology, experiential learning, group dynamics
and action research. In 1935, at the University of Iowa
his first collection of papers in English - A Dynamic Theory of Personality - was published.
He conducted research in social processes, morale of fighting troops at war, psychological warfare, and minority
and inter-group relations. He established a centre to research group dynamics in 1944 at MIT. It was out of his interracial
work in 1946 with community leaders and group facilitators that the notion of 'T' groups emerged. He set up the National Training
Laboratories in 1947.
Field theory
The Field Theory has its roots in Gestalt theory. (A gestalt is a coherent whole. It has its own laws, and is
a construct of the individual mind rather than ‘reality’). For Kurt Lewin behaviour was determined by totality
of an individual’s situation. In his field theory, a ‘field’ is defined as ‘the totality of coexisting
facts which are conceived of as mutually interdependent’. Individuals were seen to behave differently according to the
way in which tensions between perceptions of the self and of the environment were worked through. The whole psychological
field, or ‘lifespace’, within which people acted, had to be viewed, in order to understand behaviour.
The central features of Kurt Lewin’s field theory are as follows:
· Behaviour
is a function of the field that exists at the time the behaviour occurs
· Analysis
begins with the situation as a whole from which are differentiated the component parts
· The
concrete person in a concrete situation can represented mathematically.
Kurt Lewin also looked to the power of underlying forces (needs) to determine behaviour and, hence, expressed
‘a preference for psychological as opposed to physical or physiological descriptions of the field’.
Group dynamics
Kurt Lewin had a profound impact on a generation of researchers and thinkers concerned with group dynamics.
Two key ideas emerged out of field theory that are crucial to an appreciation of group process: interdependence of fate, and
task interdependence.
Interdependence of fate. Here the basic line of argument is that groups come into being in a psychological sense
‘not because their members necessarily are similar to one another; rather, a group exists when people in it realize
their fate depends on the fate of the group as a whole’.
Task interdependence. Interdependence of fate can be a fairly weak form of interdependence in many groups. A
more significant factor is where there is interdependence in the goals of group members. In other words, if the group’s
task is such that members of the group are dependent on each other for achievement, then a powerful dynamic is created.
These implications can be positive or negative. In the former case one person’s success either directly
facilitates others’ success of, in the strongest case, is actually necessary for those others to succeed also. In negative
interdependence – known more usually as competition – one person’s success is another’s failure.
Kurt Lewin had looked to the nature of group task in an attempt to understand the uniformity of some groups’
behaviour. He remained unconvinced of the explanatory power of individual motivational concepts such as those provided by
psychoanalytical theory or frustration-aggression theory. He was able to argue that people may come to a group with very different
dispositions, but if they share a common objective, they are likely to act together to achieve it. This links back to what
is usually described as Lewin’s field theory. An intrinsic state of tension within group members stimulates or motivates
movement toward the achievement of desired common goals. Interdependence (of fate and task) also results in the group being
a ‘dynamic whole’. This means that a change in one member or subgroups impacts upon others. These two elements
combined together to provide the basis for Deutch’s (1949) deeply influential exploration of the relationship of task
to process (and his finding that groups under conditions of positive interdependence were generally more co-operative. Members
tended to participate and communicate more in discussion; were less aggressive; liked each other more; and tended to be productive
as compared to those working under negative task interdependence.
Democracy
and groups
Gordon W. Allport, in his introduction to Resolving Social Conflicts argues that there is striking kinship between
the work of Kurt Lewin and that of John Dewey.
Both agree that democracy must be learned anew in each generation, and that it is a far more difficult form
of social structure to attain and to maintain than is autocracy. Both see the intimate dependence of democracy upon social
science. Without knowledge of, and obedience to, the laws of human nature in group settings, democracy cannot succeed. And
without freedom for research and theory as provided only in a democratic environment, social science will surely fail.
One of the most interesting pieces of work in which Lewin was involved concerned the exploration of different
styles or types of leadership on group structure and member behaviour. This entailed a collaboration with Ronald Lippitt,
among others. They looked to three classic group leadership models - democratic, autocratic and laissez-faire – and
concluded that there was more originality, group-mindedness and friendliness in democratic groups. In contrast, there was
more aggression, hostility, scapegoating and discontent in laissez-faire and autocratic groups. Lewin concludes that the difference
in behaviour in autocratic, democratic and laissez-faire situations is not, on the whole, a result of individual differences.
Reflecting on the group experiments conducted with children he had the following to say:
There have been few experiences for me as impressive as seeing the expression in children’s faces change
during the first day of autocracy. The friendly, open, and co-operative group, full of life, became within a short half-hour
a rather apathetic looking gathering without initiative. The change from autocracy to democracy seemed to take somewhat more
time than from democracy to autocracy. Autocracy is imposed upon the individual. Democracy he has to learn.
To instigate changes toward democracy a situation has to be created for a certain period where the leader is
sufficiently in control to rule out influences he does not want and to manipulate the situation to a sufficient degree. The
goal of the democratic leader in this transition period will have to be the same as any good teacher, namely to make himself
superfluous, to be replaced by indigenous leaders from the group.
‘T’
groups, facilitation and experience
In 1946, Kurt Lewin along with colleagues Ronald Lippitt, Leland Bradford and Kenneth Benne became involved
in leadership and group dynamics training for the Connecticut State Interracial Commission. They designed and implemented
a two-week programme that looked to encourage group discussion and decision-making, and where participants (including staff)
could treat each other as peers. Research was woven into the event. The trainers and researchers collected detailed observations
and recordings of group activities (and worked on these during the event). Initially these meetings were just for the staff,
but some of the other participants also wanted to be involved.
At the start of one of the early evening observers' sessions, three of the participants asked to be present.
Much to the chagrin of the staff, Lewin agreed to this unorthodox request. As the observers reported to the group, one of
the participants - a woman - disagreed with the observer on the interpretation of her behaviour that day. One other participant
agreed with her assertion and a lively discussion ensued about behaviors and their interpretations. Word of the session spread,
and by the next night, more than half of the sixty participants were attending the feedback sessions which, indeed became
the focus of the conference. Near the conference's end, the vast majority of participants were attending these sessions.
Lippitt (1949) has described how Lewin responded to this and joined with participants in ‘active dialogue
about differences of interpretation and observation of the events by those who had participated in them’. A significant
innovation in training practice was established. Thus the discovery was made that learning is best facilitated in an environment
where there is dialectic tension and conflict between immediate, concrete experience and analytic detachment. By bringing
together the immediate experiences of the trainees and the conceptual models of the staff in an open atmosphere where inputs
from each perspective could challenge and stimulate the other, a learning environment occurred with remarkable vitality and
creativity.
It was this experience that led to the establishment of the first National Training Laboratory in Group Development
(held at Gould Academy in Bethel, Maine in the summer of 1947). By this time Lewin
had passed away, but his thinking and practice was very much a part of what happened.
A central feature of the laboratory was “basic skills training,” in which an observer reported on
group processes at set intervals. The skills to be achieved were intended to help an individual function in the role of “change
agent”. A change agent was thought to be instrumental in facilitating communication and useful feedback among participants.
He was also to be a paragon, who was aware of the need for change, could diagnose the problems involved, and could plan for
change, implement the plans, and evaluate the results. To become an effective change agent, an understanding of the dynamics
of groups was believed necessary.
What we see here is the basic shape of T-group theory and the so-called ‘laboratory method’. Initially
the small discussion groups were known as ‘basic skill training groups’ but by 1949 they had been shortened to
T-group. In 1950 a sponsoring organization, the National Training Laboratories (NTL) was set up, and the scene was set for
a major expansion of the work (reaching its heyday in the 1960s) and the evolution of the encounter group.
The approach was not without its critics – in part because of what was perceived as its Gestalt base.
Four elements of the T-group are particularly noteworthy here:
Feedback. Lewin had borrowed the term from electrical engineering and applied it to the behavioural sciences.
Here it was broadly used to describe the adjustment of a process informed by information about its results or effects. An
important element here is the difference between the desired and actual result. There was a concern that organizations, groups
and relationships generally suffered from a lack of accurate information about what was happening around their performance.
Feedback became a key ingredient of T-groups and was found to ‘be most effective when it stemmed from here-and-now observations,
when it followed the generating event as closely as possible, and when the recipient checked with other group members to establish
its validity and reduce perceptual distortion’.
Unfreezing. This was taken directly from Kurt Lewin’s change theory. It describes the process of disconfirming
a person’s former belief system. ‘Motivation for change must be generated before change can occur. One must be
helped to re-examine many cherished assumptions about oneself and one’s relations to others’ . Part of the process
of the group, then, had to address this. Trainers sought to create an environment in which values and beliefs could be challenged.
Participant observation. ‘Members had to participate emotionally in the group as well as observe themselves
and the group objectively’. Connecting concrete (emotional) experience and analytical detachment is not an easy task,
and is liable to be resisted by many participants, but it was seen as an essential if people were to learn and develop.
Cognitive aids. This particular aspect was drawn from developments in psycho educational and cognitive-behavioural
group therapy. It entailed the provision of models or organizing ideas through the medium brief lectures and handouts. Perhaps
the best known of these was the Johari Window (named after, and developed by, Joe Luft and Harry Ingram).
The use of such cognitive aids, lectures, reading assignments, and theory sessions demonstrates that the basic
allegiance of the T-group was to the classroom rather than the consulting room. The participants were considered students;
the task of the T-group was to facilitate learning for its members’.
Action research
Kurt Lewin is also generally credited as the person who coined the term ‘action research’.
The research needed for social practice can best be characterized as research for social management or social
engineering. It is a type of action-research, a comparative research on the conditions and effects of various forms of social
action, and research leading to social action. Research that produces nothing but books will not suffice.
Action research did suffer a decline in favour during the 1960s because of its association with radical political
activism. However, it has subsequently gained a significant foothold both within the realm of community-based, and participatory
action research; and as a form of practice oriented to the improvement of educative encounters. The use of action research
to deepen and develop classroom practice has grown into a strong tradition of practice. For some there is an insistence that
action research must be collaborative and entail group work.
Action research is a form of collective self-reflective enquiry undertaken by participants in social situations
in order to improve the rationality and justice of their own social or educational practices, as well as their understanding
of those practices and the situations in which the practices are carried out. The approach is only action research when it
is collaborative, though it is important to realise that action research of the group is achieved through the critically examined
action of individual group members.
Just why it must be collective is open to some question and debate, but there is an important point here concerning
the commitments and orientations of those involved in action research. One of the legacies Kurt Lewin left us is the ‘action
research spiral’ – and with it there is the danger that action research becomes little more than a procedure.
It is a mistake, according to McTaggart to think that following the action research spiral constitutes ‘doing action
research’. He continues, ‘Action research is not a ‘method’ or a ‘procedure’ for research
but a series of commitments to observe and problematize through practice a series of principles for conducting social enquiry’.
It is his argument that Lewin has been misunderstood or, rather, misused. When set in historical context, while Lewin does
talk about action research as a method, he is stressing a contrast between this form of interpretative practice and more traditional
empirical-analytic research.
Conclusion
As this brief cataloguing of his work shows, Lewin made defining contributions to a number of fields. He had
a major impact on our appreciation of groups – and how to work with them; he pioneered action research; he demonstrated
that complex social phenomenon could be explored using controlled experiments; and he helped to move social psychology into
a more rounded understanding of behaviour. This is a formidable achievement. Sixty
years on, he still excites discussion and argument, and while we may want to qualify or rework various aspect of his work
(and that of his associates) we are deeply indebted to him both for his insights and the way he tried to bring a commitment
to democracy and justice to his work. The consistent theme in all Kurt Lewin’s work, according to David A. Kolb was
his concern for the integration of theory and practice. This was symbolized in his best known quotation: ‘There is nothing
so practical as a good theory’.
[i] Reproduced from
the encyclopaedia of informal education www.infed.org
December 2006-Topic
of the Month:
STATE VS MARKET
DEBATE
Introduction
A review of the World Development Reports (WDRs) over the last ten years is similar to a review of the evolution
of development economics over that period. This is not a coincidence, as the
objective of the WDR is to both consolidate existing knowledge on a particular aspect of development as well as stimulate
policy debate on new directions for development policy.
Some years have been more critical than others in terms of the evolution of development thinking. For example, during the mid to late 1990s, there was a re-evaluation of the idea that market liberalization
alone would spur development. This period was matched with a pair of WDRs, first
a WDR on the transition from socialism --From Plan to Market-- in 1996, followed by a WDR on the vital complementary role
of the state—The State in a Changing World. The renewed focus on poverty
reduction as the central goal of the development community was explored in detail in the 2000/2001 WDR Attacking Poverty. This report launched what would become the World Bank Group’s corporate strategy
based on the twin pillars of investment climate and empowerment. Later WDRs,
in 2004 and 2005 would lay out more detailed ideas on how to implement these two pillars.
In terms of consolidating knowledge in a particular sector, past WDRs have proven to be key documents even a
decade later. For example, if one thinks back to the 1993 WDR on health and the
1994 WDR on infrastructure, these documents continue to be key references even today for our understanding of these sectors’
roles in development.
Below is an overview of the last 10 WDRs, a synopsis of their findings and somewhat impressionistic comments
on the impact of each WDR in particulars areas of the Bank Group’s work and the development community more generally. At some stage, it would be interesting to conduct a more systematic review –
perhaps using survey data—to get a better understanding of past WDRs’ impact as a means for developing even more
effective future WDRs.
1995 Workers in an Integrating World
The
WDR 1995, Workers in an Integrating World, authored by a team led by Michael Walton, assessed what a more market-driven
and integrated world meant for workers. It asked which development strategies best addressed workers' needs, and what domestic
labor market policies could do to establish a more equitable distribution of income, greater job security, and higher workplace
standards, while preserving and enhancing the efficiency of labor markets. The report concluded that global integration offered
the prospect of tremendous future gains for the world's work force – but with no guarantees.
WDR
1995 pointed out that sound domestic and international policies are indispensable for realizing the promise of a prosperous,
integrated global workplace. Policies that rely on markets while avoiding or correcting market failures, that invest in people,
that provide a supportive environment for family farms as well as emerging industrial and service sectors – all these
are good for workers. Governments continue to exercise important functions: building and maintaining the social framework
within which workers, unions, and firms interact to set wages and working conditions; supporting workers who are hurt when
industries or whole economies suffer major shocks; and defending the rights of the most vulnerable workers, whether they be
child laborers victimized by exploitation, or women or ethnic minorities suffering from discrimination. The report noted that
in those economies that were less prepared to face global competition – in particular, those emerging from central planning
– public action had a particularly important role in promoting labor mobility, easing the cost of transition, and reaching
those excluded.
The
report provided practical policy recommendations for major areas of labor policy.
It also provided of overview of the key challenges for each region of the developing world in maximizing workers’ benefits
from the globalizing economic environment.
1996 From Plan to Market
The WDR 1996, From Plan to Market, was authored by a team led by Alan Gelb.
It noted that while centrally-planned economies had made rapid progress towards transition to market economies, their transformation
was incomplete, and profound economic, social, and political consequences that accompanied transition posed strategic challenges.
In many countries, the key steps in moving to a market economy – liberalizing markets and trade, creating new businesses,
achieving price stability, and moving towards clear property rights – were well advanced and provided important lessons
for late reformers. The report predicted that with continued and sustained reforms, the transition countries could achieve
successful long-term economic growth considerably above world averages. However, it also warned of challenges and risks ahead,
notably long-term stagnation and rising poverty in some countries.
WDR
1996 concluded that even where the institutional underpinnings of a market system were weak, consistent policies could achieve
a great deal. Sustained and consistent reform was needed, with a critical mass of support. The report also emphasized the
need for clear property rights, a prerequisite for market processes, which would eventually require widespread private ownership.
It pointed out that major changes in social policies were needed to complement the move to the market – to focus on
relieving poverty, to cope with increased labor mobility, and to address the effects of reforms on the very young and the
elderly. Finally, the report stressed that reform of legal and financial institutions, as well as of government itself, was
critical.
WDR 1996 was unusual in that it addressed a major current change in economic (and political)
systems, at the time, a hotly debated area.. It sought to deepen understanding
of the changes and of the path-dependence of countries' transitions to market economies.
This involved a deeper look at the institutional underpinnings of the market
system than had been provided by most analyses, together with an appreciation of how initial conditions (for example, as between
Russia and China) affected the options and policy choices of different countries.
The Report provided comparative measures on reform progress that have been extensively used
in other research. The discussion of corruption and institutions was somewhat novel, including the idea that institutions
are not created in a vacuum but respond to a "demand" that can be spurred by economic reforms that create private sector stakeholders. This approach to institutional change and capacity-building has become a central one
for the Bank (see for example, the emphasis on strengthening demand for strong institutions in Strategic Framework for
IDA in Africa 2004). Because of the institutional focus and emphasis on the role of initial conditions, the WDR aimed
to be pragmatic rather than ideological, for example, it paid attention to the quality of corporate governance emerging from
a privatization process (and from leaving enterprises in state hands) rather than on the desirability of privatization as
an end in itself; it also focused on the quality, rather than the size, of government.
Such approaches have become far more prevalent in more recent approaches to reform (see for example, the recent work on Lessons
of the 1990s).
A memorandum on Operational Implications of the 1996 WDR was provided to the Bank's Board in December and set
out a number of specific points. It noted the need for greater flexibility in
financing severance and recurrent costs of social services in some circumstances, the importance of communicating with Parliaments
and wider civil society, and the desirability of structuring policy-based loans as a sequence, linked together to support
multi-year plans yet with some flexibility to enable a response to unexpected developments.
This programmatic approach has become widely used in the Bank, most recently in PRSCs.
Another point was the need to improve targeting of social transfers, including through developing a legal framework to support
the capabilities of NGOs and to develop more flexible, demand-based, approaches to restructure education and training. It also urged further strengthening of work on public expenditures and, in the area
of growth, a particular emphasis on measures to encourage the entry of new firms, which were shown as vital for enhancing
competition and productivity. The Bank has indeed moved in such directions, (see
for example, the Doing Business Indicators 2004 and 2005 and WDR 2005 on growth, and WDR 2004 on service delivery).
1997 The State in a Changing World
The WDR 1997, The State in a Changing World, was devoted to the role and effectiveness of the state: what the state should do, how it should do it, and how it can do it better. Under the direction of Ajay Chhibber, the report was written as a new World Bank President raised the profile
of issues of governance and corruption. WDR 97 was the first report to make
a systematic and comprehensive attempt to show that an effective – not minimal – state was vital for economic
development. An effective state was needed to enable markets to develop and to address social issues. The report argued that the pathways to a more effective state were many and varied – but laid out
a two-part strategy to make the state more effective: First, focus the state’s activities to match its capability –
many states try to do too much with limited resources. Second, over time, improve
the state’s capability by re-invigorating public institutions – through incentives to deliver better, but also
by providing restraints on arbitrary and corrupt behavior.
The
WDR 1997 laid out an agenda of action for public sector reform. To enhance the
Bank's ability to help client countries implement such an agenda, Reforming Public Institutions and Strengthening Governance: A World Bank Strategy was published in November
2000. Based on a stock-taking of the Bank's experience with public sector reform,
this strategy envisioned significant changes in the Bank's approach to governance and public sector work. The strategy recognized that changing the internal rules of government was not enough. To be effective we must work with our partners to understand and address the broad range of incentives
and pressures – both inside and outside of government – that affect public sector performance. A broad framework for action is thus required, one that addresses competition and "voice" and partnerships,
in addition to internal rules and restraints. The strategy also discussed new
upstream analytical approaches, new lending instruments, and changes in organization, staffing and partnerships that can help
the Bank be more effective in reaching these goals. In summary WDR 97 laid out
an approach to public sector reform and governance which forms a core theme
of much of our country work, lending allocations to countries and a major part of the support we provide to the Bank’s
client countries. Following the work started in WDR 1997, the World Bank is
now recognized as the leading center of knowledge on governance and public sector reforms and a champion of anti-corruption
issues world-wide.
1998/1999 Knowledge for Development
The WDR 1998/99, Knowledge for Development, authored by a team led by Carl Dahlman,
concluded that the global
explosion of knowledge had the potential of lifting hundreds of millions out of poverty, or creating a widening knowledge
gap, in which poor countries would lag further and further behind. The report analyzed the risks and opportunities that the
global information revolution presented for developing countries, and concluded that access to financial, technical, and medical
knowledge was crucial to improving the health and living standards of the poor. It emphasized that when governments adopted
policies to make the most of knowledge, they were better positioned to improve the lives of their citizens.
WDR 1998/1999 recommended that developing countries adopt policies to reduce the knowledge gaps separating them from
rich countries. For example, investing in education, including technical training, and maintaining an open trading regime
which would bring foreign investment and licensing agreements. It also recommended that governments, multilateral institutions,
NGOs, and the private sector should work together to strengthen mechanisms resolve information problems, including product
standards, accounting systems, disclosure requirements, and credit reports. Besides calling on policy makers to recognize
that knowledge was at the
core of development efforts, the report also highlighted the World Bank's drive to become a 'Knowledge Bank'. The Bank’s
commitment to become the world's premier clearinghouse for development knowledge was first announced in 1996.
To operationalize some of the recommendations of the report, the Director moved to the World Bank
Institute, where he set up a program known as Knowledge for Development (K4D).
The main objective of the K4D program is to stimulate social and economic development in client countries by building
their capacity to access and use knowledge as a basis for enhancing competitiveness and increasing welfare. The program works
with clients to develop concrete knowledge strategies that can be implemented on the ground.
The main audience for the program includes policy makers, senior government officials, private sector executives, civil society
leaders, academics, and media representatives who are involved in advising, developing, and implementing broad national strategies
for effective use, creation, and transmission of knowledge in their countries.
The program has supported analytical work and policy forums that have helped client countries improve the environment for
technological change in their economies.
1999/2000 Entering the 21st Century
Under the direction of Shahid Yusuf, the WDR for 1999/2000, Entering the 21st Century,
presented a unified treatment of two phenomena that profoundly affect the dynamics of development. These are globalization
and localization. This report represented the Bank's first sustained treatment of how globalization was unfolding and its
implications. The report also analyzed the parallel and complementary changes occurring at the local level. These are strengthening
tendencies towards decentralization, and economic growth driven increasingly by the urban sector which is the foci of population
and industry.
Since the report was written, three aspects of globalization which it highlighted: trade,
capital flows and the environment have the remained firmly at the center of international economic analysis, policy discussion,
and debate, while international migration and accompanying remittances have gained in salience. Although much has been written
on globalization over the past five years, the findings synthesized by the WDR on multilateral trade negotiations, production
networks, the management of capital flows, global environmental imperatives, and the significance of labor flows remain current.
Moreover, the policy issues it put forward are as relevant today as they were then and are attracting a wealth of elucidative
research.
The report observed that even as the global economy moved towards closer integration, other
changes at the sub-national level were inducing the emergence of more autonomous entities many of which were large metropolitan
regions which were emerging as the engines of the developing world. Starting
with the question of why decentralization is on the march, the Report discussed the implications for macroeconomic stability,
services delivery and political institutions and then proceeded to explore the vexed issues of intergovernmental relations,
fiscal and other. These and especially intergovernmental fiscal relations are at the core of the Bank's dialogue with many
of our client countries and among the liveliest research topics within and outside the Bank.
The second
strand of localization addressed by the Report was the 'efficient and livable' city which is and will remain the key to economic
progress and social welfare throughout the world. After indicating why and how the urban economy is determining the tempo
of development, the Report explored with many examples, how this tempo can be sustained and what cities need to do - through the provision of infrastructure, services, a regulatory framework, and supporting fiscal institutions
- to improve the quality of life for their steadily growing populations. In these respects, the report presciently pointed to the policy and analytic agenda
for the next several decades and also to the sectors where the Bank's operations are expanding.
2000/2001 Attacking Poverty
The WDR 2000/01, Attacking Poverty, authored by a team led by Ravi Kanbur and Nora
Lustig, followed two other WDRs on poverty in 1980 and 1990. It drew upon a large volume of research, including a background study, Voices
of the Poor, which systematically sought the personal accounts of more than 60,000 men and women living in poverty in
60 countries, and concluded that major
reductions in poverty were possible despite the huge proportions of the problem at the start of the new century, with 2.8
billion of the world’s six billion people living on less than $2 a day with limited access to education and healthcare,
with lack of political power and voice, and with extreme vulnerability to ill health, economic dislocation, personal violence
and natural disasters.
To achieve reductions in poverty, the report recommended a more comprehensive approach that directly addressed
the needs of poor people in three complementary areas: promoting economic opportunities for poor people through equitable
growth, better access to markets, and expanded assets; facilitating empowerment by making state institutions more responsive
to poor people and removing social barriers that excluded women, ethnic and racial groups, and the socially disadvantaged;
and enhancing security by preventing and managing economywide shocks and providing mechanisms to reduce the sources of vulnerability
that poor people faced. It also added that actions by countries and communities would not be enough. Global actions would
need to complement national and local initiatives to achieve maximum benefit for poor people throughout the world.
The report contributed to the analytical foundation for the Bank’s own institutional strategy for development,
as articulated in the following years. The report formed the intellectual basis
for country-owned Poverty Reduction Strategy Papers (PRSPs) that were being initiated as the report was being written. The report also served an important informational role in quantifying and describing
the evolution of poverty since the last poverty-oriented WDR.
2002 Building Institutions for Markets
The WDR 2002, Building Institutions for Markets, authored by a team led by Roumeen Islam, focused on building institutions to support markets which promote growth and reduce poverty. It analyzed the
myriad institutions that people build and use to undertake activities that maximize returns, and to manage risk in markets.
The report noted that weak institutions – tangled
laws, corrupt courts, deeply biased credit systems, and elaborate business registration requirements – hurt poor people
and hinder development. It also pointed out that countries that systematically dealt with such problems and created new institutions
suited to local needs could dramatically increase incomes and reduce poverty. These institutions ranged from unwritten customs
and traditions to complex legal codes that regulate international commerce.
Drawing on
a wealth of research and experience from both inside and outside the Bank, this report moved towards a deeper understanding
of market-supporting institutions and a better appreciation of how people could build such institutions. It presented four
main lessons: design these institutions to complement what exists (other supporting institutions, human capabilities, and
available technologies); innovate to identify institutions that work, and drop those that do not; connect communities of market
players through open information flows and open trade; and promote competition among jurisdictions, firms and individuals.
The report advanced the development agenda at a time when the development community was
recognizing that policies alone were not sufficient to secure successful broad-based growth and poverty reduction. It provided lessons on the key elements of institution-building that are required for policy reforms to
be effective. More specifically, the notion of several possible institutional
structures being consistent with desired outcomes has become much more widely accepted in the Bank and elsewhere. The lesson that initial conditions matter and it is often useful to keep institutional design simple has
taken root. This WDR was the first to finance the simplification of business
regulations project (which has gained wide currency). In addition, the idea of
competition fostering better institutions is gaining more acceptance in Bank documents as is the idea that much depends on
experimentation and innovation. Finally, the WDR's focus on information and the
media was influential. The Bank has become much more active in this area (a number of operations and learning activities mention
this explicitly), and this theme has become more mainstreamed in the governance agenda.
2003 Sustainable Development in a Dynamic World
The WDR 2003, Sustainable Development in a Dynamic World, authored by a team
led by Zmarak Shalizi, asserted that in the past 50 years global GDP grew fourfold. Despite high population growth rates in
developing counties average per capita income increased by ~30%, adult illiteracy and infant mortality were cut by half. However,
these achievements were accompanied by growing social stresses (conflict, inequality, persistence of large number of poor
people) and environmental degradation (rapidly growing water and air pollution in developing country cities, and run down
of natural stocks -- some, such as the 70% of fisheries that are over fished and or the 5-10% of forests being destroyed each
decade, are critical to the well-being of poor people in developing countries).The next 50 years could see another fourfold
increase in the size of the global economy and significant reductions in poverty, provided that governments acted immediately
to avert a growing risk of severe damage to the environment and profound social unrest. The report examined the relationship
between competing policy objectives – reducing poverty, maintaining growth, improving social cohesion, and protecting
the environment – over a 50-year horizon. It also noted that many good policies have been identified but not adopted
or implemented, and traced this problem to distributional issues and institutional barriers (including institutional capture),
reviewing institutional innovations that might help overcome these barriers.
In nearly
50 years, the world could have a gross domestic product of $140 trillion and a total population of nine billion. Better policies
and institutions would have to be embedded in a strategy that managed a broader portfolio of assets (including natural and
social capital). Without that, the WDR warned that social and environmental strains might derail development progress, leading
to higher poverty levels and a decline in the quality of life for everybody. Expanding the role of markets and market signals
is critical to improving productivity and the efficiency of resource allocation in the production and consumption of private
goods. But improving welfare also requires the provision of complementary public goods that cannot be provided by markets
and market signals. The WDR identified three institutional characteristics to improve the provision of public goods -- picking
up signals early and from the fringes, creating fora to balance interests, and creating commitment devices to implement agreements
over the long term. The WDR also emphasized that the burden of guaranteeing sustainable development must be shared locally,
nationally, and globally. Developing countries needed to promote participation and substantive democracy, inclusiveness, and
transparency as they build the institutions needed to manage their resources. Rich countries needed to increase aid; cut poor
country debts; open their markets to developing country exporters; and help transfer technologies needed to prevent diseases,
increase energy efficiency, and bolster agricultural productivity. The report added that civil society organizations contributed
when they served as a voice for dispersed interests and provided independent verification of public, private, and nongovernmental
performance; private firms contributed when they committed to sustainability in their daily operations and when they created
incentives to pursue their interests while advancing environmental and social objectives; and governments contributed when
they provided strategic guidance and an enabling framework for a variety of accountable partnerships between the State, civil
society, and the private sector.
This is a fairly recent WDR; however, its impact is becoming apparent in a number of areas. Some of the concepts and topics highlighted in WDR 2003 (such as the important role of "spatial analysis" in linking economic,
environmental, and social consequences of policy) have been incorporated into the ESSD network’s work and poverty analysis.
The inequality and governance issues raised in WDR 2003 parallel growing interest on these topics
in the Bank. Some of the topics -- especially implementation issues -- require more research and are entering the Bank's research agenda. As for the larger development agenda,
the WDR was presented at the World Summit on Sustainable Development in Johannesburg (in Aug/Sept 2002) which has generated
has generated a number of follow-up requests to develop WBI courses for specific countries (in West Africa, Southeast Asia,
China, ...) and audiences. Perhaps one of the more significant impacts has been in China, where the staff working on the next
5 year plan in China have been required to read WDR 2003 by the National Development and Reform Commission and to take lessons
from it to incorporate in the next plan. The NDRC has also requested the Bank to reflect some of the sustainability and urbanization
issues raised in WDR 2003 in the Bank's work on China.
2004 Making Services Work for Poor People
The WDR 2004, Making Services Work for Poor People, authored by a team led by Shanta Devarajan and Ritva Reinikka, warned
that broad improvements in human welfare would not occur unless poor people received wider access to affordable and improved
services in health, education, water, sanitation, and electricity. Without such improvements in services, freedom from illness
and freedom from illiteracy – two of the most important ways poor people escape poverty – would remain elusive
to many. The report said that too often,
key services fail poor people – in access, in quantity, in quality. This imperiled the Millennium Development Goals,
a set of development targets that call for a halving of the global incidence of poverty, and broad improvements in human development
by 2015. However, the report also provided powerful examples of where services did work, showing how governments and citizens
could do better.
Noting both spectacular successes and miserable failures in the efforts by developing countries to make services work,
the report pointed out that the main difference between success and failure was the degree to which poor people themselves
were involved in determining the quality and the quantity of the services they received. The report documented three ways in which services could be
improved: by increasing poor clients’ choice and participation in service delivery, so they can monitor and discipline
providers; by raising poor citizens’ voice, through the ballot box and making information widely available; and by rewarding
the effective and penalizing the ineffective delivery of services to poor people.
The on-going
impact of the 2004 World Development Report, "Making Services Work for Poor People," is four-fold. First, the report has focused
attention on the problem of service delivery, or public-expenditure efficiency more generally, as critical to achieving the
Millennium Development Goals. Consequently, several Bank flagship reports, including reports to the Development Committee
such as the Global Monitoring Report and the reports on aid effectiveness, focus on improving the use of resources, both internal
and external, to accelerate poverty reduction. Second, the WDR2004's analytical
framework, built around the notion that improving service delivery requires strengthening the relationships of accountability
between policymakers, service providers and poor people has been applied in regional and operational activities, including
two regional reports from the LAC and ECA regions, several programmatic operations in Africa and South Asia (reduction in
teacher absenteeism is a trigger for a development policy credit in Andhra Pradesh, India) and in the country assistance strategy
of Indonesia. Third, the WDR2004's discussion of using budget-support aid to
improve service delivery has had an impact not just in the Bank, which was already moving in this direction, but also in other
donor agencies, especially DFID. Finally, the WDR2004 made a strong pitch for
increasing impact evaluation of service-delivery innovations in order to learn what to scale-up. This has given a boost to the Bank's increased use of impact evaluations.
2005 A Better Investment Climate for Everyone
The WDR 2005, A Better Investment Climate for Everyone, authored by a team led by Warrick Smith, focused on investment climate, and concluded that accelerating growth and poverty reduction required governments to reduce the policy risks,
costs, and barriers to competition facing firms of all types – from farmers and micro-entrepreneurs to local manufacturing
companies and multinationals. It drew on surveys of over 30,000 firms in developing countries, the Bank's Doing Business database,
country case studies, and other new research. It highlighted opportunities for governments to improve their investment climates
by expanding the opportunities and incentives for firms of all types to invest productively, create jobs, and expand.
The report explored the key features of a good investment climate, and how they influenced growth and poverty; the
reasons why progress in improving the investment climate was often slow and difficult; the practical lessons that could be
drawn from country experiences on how to tackle such a broad agenda; knowledge about good practices in each of the main areas
of the investment climate; the possible role that selective interventions and international arrangements could play in improving
the investment climate; and what the international community could do to help developing countries improve the investment
climate of their societies.
Since its publication in September 2004, the report has been well received globally, and the team has received numerous
requests to participate in additional seminars around the developing world to inform policy makers and the public at large
of the report’s recommendations. The report’s strong focus on the
empirical reality of business’s investment decisions, for both large and small firms, is serving well in terms of opening
the eyes of policy makers to the reforms that need to be undertaken to spur investment and growth.
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