Institutional Learning and Change Initiative

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Changes in the global environment over the past decade have profoundly altered the context of Bank operations. Many developing countries have undertaken major political and economic reforms, opening their economies and political processes. At the same time, globalization has brought new opportunities for gain?and new risks of instability and rising inequality within and among states. Aid flows have stagnated, even as new demands for official resources have escalated. Despite worldwide improvements in social indicators, development progress has been disappointing, poverty trends have worsened, and most low-income countries remain heavily dependent on aid. Per capita incomes actually fell during 1985?95?by 1.4 percent a year in low-income countries (ex-cluding China and India) and by 0.7 percent a year in middle-income countries. Inevitably, governments of developed and developing countries, as well as the public at large, have become more concerned about development effectiveness. This has led to a wideranging search for improved approaches to development cooperation. The Comprehensive Development Framework (CDF) encapsulates major themes around which a consensus of the development community is crystallizing. The Poverty Reduction Strategy Papers?to be prepared jointly by the World Bank, the International Monetary Fund, and borrowing countries?are a closely related response. Since its unveiling a year ago, the CDF has evoked considerable interest. The basic elements of the CDF are not new. What is new is their joint articulation as a guide to development assistance. First, development constraints are structural and social and cannot be overcome through economic stabilization and policy adjustment alone?they require a holistic, broad-based approach. Second, policy reform and institutional development cannot be imported or imposed: without domestic ownership, reforms and investments are not sustainable. Third, successful development requires partnerships among government, local communities, the private sector, civil society, and development agencies. Fourth, development activities must be guided and judged by results. CDF pilot activity is beginning in 13 countries, and its dimensions are still evolving. Although it is too early to assess the CDF as such, this year's Annual Review of Development Effectiveness examines development experience through the lens of CDF principles, with a view to drawing lessons for CDF implementation.