This paper shows that the increased policy-selectivity of aid allocations observed in recent years provides recipient countries an incentive to improve policies. The paper estimates that a change in the World Banks Country Policy and Institutional Assessment policy index from 1.5 to 2 for a...

How and where infrastructure is built – and how environmental and social risks related to infrastructure are managed – will have a direct influence on whether developing countries pursue more sustainable development pathways or not. Development banks and development finance institutions...