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ing institutions such as the Economic Association of Zambia or the Economic
Association of Solomon Islands, 13 by facilitating seminars for parliamentarians
and by holding in-country seminars on poverty reduction strategies.
At the international level, the introduction of a peer review system would
also help in ‘locking in’ the commitment to policy reform and poverty reduction.
As with the policy dialogue for OECD countries, the country analysis
could best be done by an independent secretariat whose report would be
published. This could have a positive impact on the internal debate, which
will have to become the most important component of the policy dialogue.
(ii) Restoring the centrality of policy reform in the development
co-operation relationship
The second step in enhancing the effectiveness of the policy dialogue is
restoring its centrality in the development co-operation relationship. Even
in the World Bank commitment and disbursement pressures have reduced
that centrality. Inasmuch as the key priority is the establishment of a proper
policy environment in sub-Saharan African countries – and not the provision
of donor finance – the highest priority is for donors and the recipient government
to improve that policy environment. That can be done through
the earlier-described persuasion process, including by changing the modalities
of the Consultative Group process, by introducing the ‘two-step approach’
of policy discussions and commitment pledges. 14
(iii) Formulating objectives and targets of policy reform
which are feasible and not excessively ambitious
Experience in Zambia and Solomon Islands shows that both donors and recipient
governments tend to adopt excessively ambitious targets for policy
reform and self-help, well ahead of the political capacity to achieve them. The
final result is not infrequently political rejection of the entire reform programme
when more measured and sustained progress would have been feasible.
In addition, policy reform programmes would benefit if they covered key
issues only, so that the earlier ‘micro-management’ aspect of policy reform
can be dispensed with. This point has now been accepted by the IMF.
When financial dependency on external donors rises – when all or most
investment is financed by donors – there is a tendency for much of the
policy reform discussions to be directed at satisfying donors so that they
will release their funds. This is a perverse aspect of the policy dialogue and
should be avoided. After all, countries should not design policies to please
donors but, rather, to ensure their own development.
13 The latter received financial support from the Government of New Zealand and DIFID.
14 This is the ‘Consortium Approach’.