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policy performance of the government, so as to be able to disburse its programme
assistance which was essential to help settle overdue loan and credit
repayments to the Bank. Generally speaking, while the policy branch of the
World Bank admonished bilateral donors not to provide Balance of Payment
support when the policy environment was unfavourable, in the case
of Zambia, the Bank was the last donor to react to negative trends in policy
performance by withholding its balance-of-payments support.
Overall, only very late in the 1990s did the World Bank come to recognise
the critical importance of ‘good governance’ in the development process,
and was handicapped by its Articles of Agreement from pursuing this
matter vigorously. Several other aspects of World Bank leadership in the
policy dialogue have at times been questioned by other participants in the
process. Their questions centred around inadequate consultation with bilateral
donors, the Bank’s lack of recognition of the importance of good governance,
and in the case of Zambia, lack of attention to the most critical
issue of development in that country, namely the copper sector. These were
factors that also reduced the overall effectiveness of the policy dialogue.
There is a question whether, because of its own operational involvement
in the recipient country, the World Bank should in future continue to play
the lead role in the macro-economic policy dialogue. In the 1990s, there
were instances in Zambia when the World Bank’s coordinating function in
the policy dialogue was compromised by the Bank’s own operational imperatives.
Thus, a case can probably be made for experimenting with new
substitute lead donor roles. For example, there may be merit in experimenting
with a lead role to be played by an impartial ‘peer’. This is contemplated
for the NEPAD arrangement and would follow the positive example
set in the 1960s by the Alliance for Progress in Latin America. Under the
latter arrangement, a Secretariat was established – headed by a prominent
citizen of Latin America – under which a Group of Wise Men conducted
performance reviews of Latin American countries, aided by experienced
technical advisers. Several aspects of this arrangement worked well.
The record of the 1990s also clearly suggests a need for enhancing the
effectiveness of the lead donor concept at the sectoral level. What makes
for a good lead donor in the policy dialogue on sectoral issues? In the case
of Zambia, the Government rightly felt that such lead donors should have a
thorough knowledge of the sector, which normally required the lead donor
to have an in-country presence and to have played a significant operational
role in the sector. If these requirements were met, positive results were
achieved through sector coordination efforts led by a bilateral donor. Those
bilateral donors who were successful as leaders in the sector policy dialogue
had ‘knowledge’ of the sector, not only of the sector in the recipient country,
but also knew what had been successful and what had not been successful
elsewhere. They included, for Zambia, GTZ of Germany and NORAD
for the water supply sector, and USAID in agriculture.
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