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The evolving and widening participation in the policy dialogue
On the recipient governments’ side, their participation in the policy dialogue
was, for a long time, limited to their core economic ministries, which
‘facilitated’ the policy dialogue with donors but which made for only limited
‘ownership’ of the policy reform programme. A welcome development
in the 1990s was that the policy dialogue began to encompass a wider audience
in developing countries, with increased participation by their sectoral
ministries, and by non-state actors, including non-governmental organisations.
In some countries (e.g. Zambia), members of parliament also participated
in the policy dialogue. 5 Donors have often helped to achieve that
result by inducing recipient governments to open up the process so as to
ensure the achievement of a wide consensus on the policy reform programme.
6 In the Solomon Islands, newly elected members of parliament
were briefed on pending issues of policy reform. On the donors’ side, as
well, the 1990s saw an evolution. While consultative groups and consortia
remained the main institutions for the policy dialogue, Sector Aid
Coordination Groups (SACG) also emerged. The World Bank also involved
recipient governments and bilateral donors more fully in the design of its
programme strategies.
Leadership in the policy dialogue on economic and financial matters has
mostly been provided by the World Bank and the IMF. On the whole this
leadership has been helpful and based on high-quality economic analysis.
One problem, recently resolved, was that for a long time there were overlapping
responsibilities between the two Bretton Woods Institutions which
complicated matters. A second problem was that in the policy dialogue the
leadership of the Bretton Woods Institutions was not always accepted. Of
special importance has been the problem that donors – including, at times,
the World Bank itself – have not always followed the guidance provided by
the IMF. The resulting disharmony in donor positions led to failure of the
policy dialogue. Recently this also happened in Solomon Islands where the
country’s main bilateral donor went against the IMF leadership in the policy
dialogue with the government, which contributed to the abandonment of
the recovery programme. Lack of harmony in donor approaches has been a
key cause of reduced effectiveness of the policy dialogue.
Another factor reducing the effectiveness of the policy dialogue has been
the conflict between the World Bank’s role as a significant provider of financial
assistance and the Bank’s leadership of Consultative Groups. Not
infrequently, the World Bank felt it was under important commitment and
disbursement pressure, and in the case of Zambia was several times reproached
by bilateral donors for presenting a less than demanding approach to the
5 In Zambia the IMF successfully held seminars for members of parliament.
6 In the Solomon Islands, donors supported the establishment of the Economic Association of
Solomon Islands which stimulated the internal debate on economic and financial policy reform.