[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-112850-en":3,"doc-seo-112850-105":29,"detail-sidebar-cat-0-en-105":90},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":4,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},112850,962075114101,"Seraphina","https://ap-avatar.wpscdn.com/avatar/e000253a75eb197efd?x-image-process=image/resize,m_fixed,w_180,h_180&k=1780044092746381165",8,"Research & Report","Supporting Policy Reform from the Outside - Lodewijk Smets","The study examines the limits and opportunities of supporting policy reform provided by external actors in recipient countries. It analyzes four support dimensions—conditional financing, policy dialogue, technical evidence, and political institutions—and synthesizes literature findings. Without recipient commitment, conditional financing is unlikely to induce reform; external participation in dialogue can reshape policymakers’ beliefs; credible evidence helps assess costs, benefits, and effectiveness; and institutional change may backfire if general equilibrium effects are ignored. The work closes with directions for future research.","Pub lic Disclosure Authorized Pub lic Disclosure Authorized  \n\n| Supporting Policy Reform from the\u003Cbr>Outside |\n| --- |\n| Lodewijk Smets |\n\nSound economic and social policies are important if countries wish to prosper and achieve sustainable development. It is far from guaranteed, however, that policymakers select and implement good policies, which provides a rationale for external policy support. Indeed, many organizations are engaged in supporting policy reform processes in recipient countries. This study investigates the limits and opportunities of supporting policy reform by focusing on four dimensions of support: conditional financing, policy dialogue, technical evidence and political institutions. Four findings follow from a review of the literature. First, without commitment on the recipient side, conditional financing is unlikely to induce policy reform. Second, when external actors acquire a seat at the policy dialogue table, it is important to de tect (and influence) the beliefs policymakers hold. Third, outside parties should bring sound evidence to the table about the costs, benefits, and effectiveness of their policy proposals. Finally, supporting changes in political institutions without considering general equilibrium effects can be counterproductive. The study concludes with a discussion and some avenues for future research in this field.  \nJEL Codes: E60, F35, F53, O19, O20  \nKeywords: Policy-based lending, aid effectiveness, policy reform, political institutions, persuasion, evidence, policy dialogue, belief change.  \nIntroduction  \nPublic policies are needed to provide public goods and address externalities, should aim for equitable redistribution, and support a good functioning of the economy. Sound economic and social policies are therefore important if countries wish to prosper and achieve sustainable development. Several studies have demonstrated the positive effects of public policies on growth and development. For example, Knack and Keefer (1995) show that strong contract enforceability and low risk of expropriation  \nThe World Bank Research Observer  \n© The Author(s) 2019 . Published by Oxford University Press on behalf of the International Bank for Reconstruction and  \nDevelopment / THE WORLD BANK. All rights reserved. For permissions, please e-mail: [journals.permissions@oup.com](journals.permissions@oup.com)  \n[doi: 10.1093/wbro/lkz006 35:19](doi: 10.1093/wbro/lkz006 35:19)–[43](43)  \nDownloaded from [https://academic.oup.com/wbro/article/35/1/19/5588625 by International Monetary Fund user on 23 June 2021](https://academic.oup.com/wbro/article/35/1/19/5588625 by International Monetary Fund user on 23 June 2021)  \n\n| Figure 1. Quality of the Policy and Institutional Framework, 2015 |\n| --- |\n|  |\n| Source: Gwartney, Lawson, and Hall (2015) . |\n\nare associated with investment and economic growth. With regard to inflation control, Fischer (1993) demonstrates that keeping inflation sufficiently low is conducive to sustained economic growth. Burnside and Dollar (2000) report evidence of a strong association between economic growth and a policy index that includes budget surplus, inflation, and openness to trade. Henry and Miller (2009) compare the growth experience of Barbados and Jamaica and conclude that—next to the broader institutional framework—macroeconomic policies also matter for economic success.  \nIt is far from guaranteed, however, that good policies arise in equilibrium. Figure 1 illustrates for the year 2015 the quality of the policy framework for a large set of countries. The figure is based on the Fraser Institute’s Economic Freedom of the World Index, which measures the degree to which the policies and institutions of countries are supportive of economic development.1 Scores range from 1 to 10 . Figure 1 shows that considerable variation exists in the quality of policies that countries end up with. In 2015, Venezuela was ranked at the bottom with a score of 2.96, while Hong Kong topped t","cbCaihCLmzRx6kzp","https://ap.wps.com/l/cbCaihCLmzRx6kzp","pdf",584126,1,25,"English","en",105,"# Introduction\n## Role and limits of external policy support\n## Conditional financing\n## Policy dialogue and belief change\n## Technical evidence and persuasion\n## Political institutions and general equilibrium effects\n## Study conclusions and future research","[{\"question\":\"What four dimensions does the study use to analyze supporting policy reform?\",\"answer\":\"It focuses on conditional financing, policy dialogue, technical evidence, and political institutions.\"},{\"question\":\"Why is conditional financing often ineffective?\",\"answer\":\"Without commitment from the recipient side, conditional financing is unlikely to induce policy reform.\"},{\"question\":\"How can external actors influence policy dialogue outcomes?\",\"answer\":\"When external actors gain a seat at the policy dialogue table, they need to detect and influence the beliefs policymakers hold.\"}]",1784497672,63,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":85,"head_meta":87,"extra_data":89,"updated_unix":27},"supporting-policy-reform-from-the-outside-lodewijk-smets","",{"@graph":35,"@context":84},[36,53,67],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/supporting-policy-reform-from-the-outside-lodewijk-smets/112850/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":61,"encodingFormat":60,"isAccessibleForFree":62,"interactionStatistic":63},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-19",true,{"@type":64,"interactionType":65,"userInteractionCount":4},"InteractionCounter",{"@type":66},"ViewAction",{"@type":68,"mainEntity":69},"FAQPage",[70,76,80],{"name":71,"@type":72,"acceptedAnswer":73},"What four dimensions does the study use to analyze supporting policy reform?","Question",{"text":74,"@type":75},"It focuses on conditional financing, policy dialogue, technical evidence, and political institutions.","Answer",{"name":77,"@type":72,"acceptedAnswer":78},"Why is conditional financing often ineffective?",{"text":79,"@type":75},"Without commitment from the recipient side, conditional financing is unlikely to induce policy reform.",{"name":81,"@type":72,"acceptedAnswer":82},"How can external actors influence policy dialogue outcomes?",{"text":83,"@type":75},"When external actors gain a seat at the policy dialogue table, they need to detect and influence the beliefs policymakers hold.","https://schema.org",{"og:url":51,"og:type":86,"og:title":13,"og:site_name":58,"og:description":14},"article",{"robots":88,"canonical":51},"index,follow",{"doc_id":7,"site_id":24},{"code":4,"msg":5,"data":91},[92,96,100,104,109,114,119,122,127,130,134],{"id":20,"doc_module":4,"doc_module_name":45,"category_name":93,"show_sort_weight":94,"slug":95},"Story & Novel",90,"story-novel",{"id":46,"doc_module":4,"doc_module_name":45,"category_name":97,"show_sort_weight":98,"slug":99},"Literature",80,"literature",{"id":52,"doc_module":4,"doc_module_name":45,"category_name":101,"show_sort_weight":102,"slug":103},"Exam",70,"exam",{"id":105,"doc_module":4,"doc_module_name":45,"category_name":106,"show_sort_weight":107,"slug":108},5,"Comic",60,"comic",{"id":110,"doc_module":4,"doc_module_name":45,"category_name":111,"show_sort_weight":112,"slug":113},6,"Technology",50,"technology",{"id":115,"doc_module":4,"doc_module_name":45,"category_name":116,"show_sort_weight":117,"slug":118},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":45,"category_name":12,"show_sort_weight":120,"slug":121},30,"research-report",{"id":123,"doc_module":4,"doc_module_name":45,"category_name":124,"show_sort_weight":125,"slug":126},9,"Religion & Spirituality",20,"religion-spirituality",{"id":125,"doc_module":4,"doc_module_name":45,"category_name":128,"show_sort_weight":125,"slug":129},"World Cup","world-cup",{"id":131,"doc_module":4,"doc_module_name":45,"category_name":132,"show_sort_weight":131,"slug":133},10,"Lifestyle","lifestyle",{"id":135,"doc_module":4,"doc_module_name":45,"category_name":136,"show_sort_weight":105,"slug":137},19,"General","general"]