World Development Report 2017 ― Governance and the Law

The World Development Report (WDR) 2017 on Governance and the Law seeks to shed light on how a better understanding of governance can bring about more effective policy interventions to achieve sustainable improvements in welfare. Many governance reform efforts have focused on transplanting idealized institutional forms, strengthening state capacity, and establishing the rule of law. However, history has shown us that these types of changes in governance do not necessarily lead to improvements in development outcomes in every context, nor are they always feasible to bring about. The WDR 2017 proposes three key principles for rethinking the relationship between governance and development in order to strengthen reform efforts: think about function not only form, think about power not only capacity, and think about the role of law not only the rule of law. These principles imply that in order to improve development, reform efforts need to consider (i) how institutional forms are (or are not) able to solve commitment, cooperation, and coordination problems by making policy promises credible and effectively influencing behavior; (ii) how the relative bargaining power of actors can be shifted by enabling the entry of new actors into the bargaining arena, changing the incentives of actors, or reshaping their preferences; (iii) what role the formal and informal rules play in shaping that bargaining process. The Report applies these principles in the context of security, growth, and equity to better understand the policy implications and trade-offs for different development goals. The Report concludes by exploring the conditions under which these types of changes can be brought about looking at the conditions under which elites may choose to establish limits on their own power, how citizens can overcome collective action problems to support reform, and how international influences can reshape local bargaining dynamics.