1. Kai Kaiser & Shahrooz Badkoubei Applied Inclusive Growth Analysis
Governance and Political-Economy in WBG Growth Analysis
Kai Kaiser & Shahrooz Badkoubei
Applied Inclusive Growth Analysis
Day 4, March 26, 2009

2. Binding Constraints in Practice
Survey of Recent CEM Practice
FY : Grey/Quasi-Grey Cover
Desk Review & Follow-up Dialogue with TTLs
Various Methodologies
8 HRV Approach
1 Multidimensional
Policy Priorities Varied
Growth focus: acceleration, diversification sustainability, inclusive, pro-poor…

3. Objectives Identify Reform Challenges in Practice
Country Specificity
Examine how GPE being addressed for country growth policy dialogue
Develop resource materials for task teams

4. Caveats CEM Categorization Only Indicative
Many CEMs don’t use explicit (HRV) binding constraints to growth methodology
Constraints time-specific
Impacts of Global Economic Crisis
GPE Dialogue May Be Off-Line
Not explicit in Grey Cover CEMs
Implementation counterparts problem…

5. Revealed Binding Constraints

6. CEM Highlights: Angola

7. CEM Highlights: Benin

8. CEM Highlights: Ghana

9. CEM Highlights: Kenya

10. GPE & “Second Best” Institutions
Differentiate Form from Function
E.g., China’s Reforms
Shift from Normative/Presumptive
Good Enough Governance (Grindle)
Contextual Fit
 Which forms are effective and politically feasible?

11. Findings
Governance, Political-Economy, Institutional Issues Inherent to All Binding Constraints
Addressing constraint requires technical & GPE skills
“Governance/micro-risks” identification and remedies diffuse
Clarify terminology
Sharpen diagnostics
Need to document value added
Don’t erode CEM “objectivity”
Led to alternative/succesfull engagement

12. Resources
Governance & Political-Economy for Growth Analysis SharePoint Intranet Site
Selected References
Rodrik, Dani, (2008), Second Best Institutions, Cambridge, MA: Harvard University (mimeo)