Information, power, and location: World Bank staff decentralization and aid project success

Abstract

Using data on World Bank staff identity and field placement, this article examines the relationship between staff presence in recipient countries and aid project performance. I find that merely placing World Bank staff in developing countries has little effect on the success of development projects. Greater field decision rights are, however, associated with differential project performance. In the most fragile states, the presence of senior personnel (World Bank Country Directors) is associated with greater project success after the “Strategic Compact” increased Country Directors' power. However—consistent with a bargaining model in which greater World Bank authority is in tension with recipient country direction of projects—as countries become less fragile, the net effect of the presence of Country Directors becomes negative. The impact of World Bank staff decentralization is mixed and appears to be driven primarily by the power of senior personnel in the field, not the ability of field staff to gather local information.