Vassar College Digital Window @ Vassar The political economy of conditionality: an empirical analysis of World Bank Enforcement The political economy of conditionality: An empirical analysis of World Bank enforcement

Christopher Kilby, Christopher Kilby
1914 unpublished
Traditional aid conditionality has been attacked as ineffective in part because aid agencies-notably the World Bank-often fail to enforce conditions. This pattern undermines the credibility of conditionality, weakening incentives to implement policy reforms. The standard critique attributes this time inconsistency to bureaucratic factors within the aid agency such as pressure to lend, defensive lending, or shortsighted altruism. Pressure from powerful donors provides another potential
more » ... n for lax enforcement. This paper presents an empirical analysis of the political economy of conditionality enforcement in international organizations using the case of the World Bank and the United States. The analysis examines panel data on World Bank disbursements to 97 countries receiving structural adjustment loans between 1984 and 2005. Using macroeconomic variables to measure compliance and UN voting as an indicator of alignment with the U.S., this paper presents evidence that the World Bank enforces structural adjustment conditions more vigorously in countries not aligned with the United States.