China) and the more successful transition experiences (Eastern Europe, China again) have involved importing and transplanting useful policy lessons from the West, adapting them to local circumstances and undergoing a learning process in which the experience of the local population was critical.

# **3 The Organization of World Bank Research**

Throughout its history, the Bank has gone through several reorganizations that have affected not only the administrative structure of research, but also the relationship between research and operations, and the way research priorities are set. In addition to institutional reorganizations, the Bank’s research program has itself been reviewed and reorganized at several other junctures leading to new priorities and new means of achieving them (World Bank 1990).

The basic nature and direction of research at the Bank is set by the overall institutional mandate and by the institutional structure established to manage research. The clearest articulation of the Bank’s research (and policy) priorities is the departmental and divisional structure in those parts of the institution responsible for research. For instance, the fact that the Bank created an Environmental Department in 1987 does not mean that, prior to 1987, the Bank had no interest in environmental issues; but it means that senior management decided in 1987 to heighten the Bank’s commitment to such issues. A key lesson from Bank experience is that setting research priorities in the absence of an administrative mechanism to serve those priorities seldom produces results.

There are important exceptions to the notion that departmental and divisional structures dictate the Bank’s research agenda. Many issues faced by the Bank and its member countries do not easily lend themselves to compartmentalization. Poverty is a clear example, private sector development another. For these cross-cutting issues, Bank research management must coordinate the activities of several departmental or divisional units through its senior management structure. Improving the Bank’s ability to undertake such “matrix management” was one of the central rationales for the formation of the Policy, Planning and Research (which became the Policy, Research and External Affairs) complex at the time of the 1987 reorganization, and for the creation of the Networks during the 1997 reorganization.

The amount of research undertaken in broad subject areas at the Bank depends in large part on the resources the institution chooses to devote to those areas. However, within each subject area there remains considerable leeway in terms of what topics will be researched. Even the Bank can undertake research on only a fraction of all interesting and potentially high payoff research areas. Some mechanism is, therefore, needed to ensure that divisional and departmental research efforts are devoted to areas with the highest potential policy payoff. This is not an easy matter because research is by its nature a highly uncertain undertaking.

Over the years, the Bank has used a number of mechanisms to set research priorities, or, more accurately, to ensure that research is serving institutional priorities. Key actors in this process have been the Vice Presidents responsible for research, the Research Committee in its various avatars, and the Bank's Research Administrator, again in various guises.

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