The inclusion of good governance in these criteria reflects the consensus that good governance
affects the growth and poverty-reduction prospects of a country and is thus central to IDA’s
objectives. It was clearly stated that lending to countries with weak governance should be scaled back
or stopped entirely if necessary. IDA focuses on governance dimensions that it can evaluate
systematically. The specific governance criteria employed are designed to ensure that the definitions
of governance implicit in the assessment criteria are broad enough to capture significant factors
relevant to economic growth and poverty reduction. These criteria contain six elements, and it is
hoped that they will provide a reasonable basis for introducing a more explicit governance focus in
the performance ratings and for highlighting governance problems:
(a) sustainability of structural reforms;
(b) property rights and rule-based governance;
(c) quality of budget and public investment process;
(d) efficiency and equity of revenue mobilization;
(e) efficiency and equity of public expenditures; and
(f) accountability and transparency of the public service.