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Submitted by John Gonzalez on
I reviewed the draft Approach and also reviewed a background note “World Bank Lending Instruments and Public Sector Management” prepared by Nick Manning, Mike Stevens, Alexandre Arrobbio and Alberto Leyton available on the Bank's intranet. It seems to me that interest in borrowing from the Bank, however concessional the lending, might be lessening given the increasing availability of international credit. In consequence, it will presumably be more difficult for the World Bank to support countries’ public sector reform processes through lending, particularly for technical assistance - and the dialogue will be more easily taken off course by political considerations. A more robust focus on reform programs will likely be more feasible at the subnational level. Assisting subnational governments would probably have more impact and results - and, in contrast to the situation at the national level, the local and subnational governments find it hard to get access to credit and so might be more interested in Bank finance. Thus the introduction of the P4R lending instrument could provide a good opportunity for subnational lending as it “will disburse not against transactions under Bank procurement and FM rules, but for targeted results achieved using country systems… and Bank disbursement will be triggered by the indicator and no matching eligible expenditure will be necessary”.