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Extra resources for African Economic Outlook 2002 2003
The goal 17. This sections draws heavily on the Global Poverty Report (2002) prepared by the AfDB in collaboration with the World Bank and other MDBs. © AfDB/OECD 2003 African Economic Outlook 39 Overview of improving the development effectiveness of foreign aid will be well served by greater selectivity in the allocation of aid through linking international assistance to policy performance. The World Bank and African Development Bank now adopt similar systems for assessing the policy stance and institutional performance of African countries by evaluating performance in four clusters: governance Box 1 - Country Performance Assessment Framework The World Bank and the African Development Bank have independently devised frameworks for assessing the policy stance of borrowing countries and the institutional framework in place.
Yet the link between privatisation and private-sector development is far from evident. Privatisation does not necessarily lead to an increase in the number of players, and therefore to increased competition. Also, to the extent that most state enterprises are loss-makers, divestiture is unlikely to take place unless it is accompanied by a whole range of incentives that tend to limit the level of competition in the market13. In addition, some privatisations in Africa have often resulted in a monopolistic situation, even when measures to liberalise the sector were taken, because of heavy entry costs.
42 Sixteen countries, most experiencing political and economic instability, are deemed not to have sound policies and adequately functioning institutions. These countries are unlikely to effectively use the estimated amount of aid reported in Table 8. 6 billion a year, they will require specially tailored assistance for conflict resolution, post-conflict reconstruction, building institutions of political and economic governance, and deepening political and economic reforms. For post-conflict countries, special measures would ensure the provision of basic social services.