of compliance with policy reform objectives.<sup>59</sup> Meanwhile, adjustment lending rapidly increased from 7 percent of the volume of lending in 1980-82 to 26 percent in 1987-90.<sup>60</sup> In later decades, this modality of lending would surpass 50 percent of the volume of lending, depending upon recipient country demands.

In the 1990s and 2000s, country ownership and country specificity came to the forefront, as well as a renewed focus on governance and enhancing country level understanding of development. Sweeping policy formulas were largely swept aside. On the intellectual front, both within the Bank and beyond, institutional economics and historical analysis became more prominent with the awarding of the Nobel Prize to Douglas North and Robert Fogel in 1993. In the 2000s, there were efforts to improve country level analysis of both firm and household data to better understand the dynamics of productivity growth, including the ―investment climate‖<sup>61</sup> , as well as the determinants of poverty. The concept of ―equity‖ or equality of opportunity extended traditional analysis of income inequality, via the 2006 World Development Report. Another trend in research is the use of quasi-experimental techniques to understand micro interventions for development. The Poverty Lab at MIT has been a leading proponent; however, researchers at the Bank and many universities have also contributed actively to this research area. In addition, country teams are currently using impact evaluation techniques to improve the quality of ―results‖ measurement for World Bank supported projects. Currently, the Bank‘s Chief Economist is proposing a ―new structural‖ approach to rethinking development.<sup>62</sup> A number of country teams in the World Bank are beginning to apply new structural approach to analyze policies for improving economic growth prospects.

Country specificity and country ownership entered into the operational units of the Bank at the country level. For example, ―Country Assistance Strategies‖ became ―Country Partnership Strategies.‖ ―Best practice‖ for policy based lending focuses on the quality of the policy dialogue and the Bank‘s inputs into the government‘s development thinking. As a result, the name of ―Structural Adjustment Loan‖ was changed to ―Development Policy Loan (DPL).‖ Beyond the name change, gradually loans were simplified to the point where currently DPLs contain a list of policy actions that the government has already complied with and there is no future ―conditionality‖ that could restrict disbursement of the funds.

Advisory, analytic and technical assistance activities are increasingly tailor-made to government specifications. For example, a traditional public expenditure review might have a focus on a particular area of public sector performance, at the government‘s request, and the delivery of the advice might be built around both Bank staff analysis and/or academic seminars/conferences by leading experts and/or partnership with local think-tanks.

Meanwhile, other institutions were created to provide finance to development: both bilateral aid agencies and regional multilateral development banks. The Inter-American

> 59 ―Simplifying Disbursements Under Structural and Sectoral Adjustment Loans,‖ operational memorandum for OP 8.60 guiding policy based lending, February 1996.

> 60 Ibid, page 520, table 10-1.

> 61 See Stern (2002).

> 62 See Lin, 2012.

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