The bank's report tries to take the focus off the importance of economic reforms in boosting growth and highlight social and political steps that help as well
on and enforcing the rule of law, the World Bank said Monday.
A study by the bank singled out the Ukraine and Indonesia as nations that could boost per capita income dramatically by shaping up their legal systems.
The findings are central to the lending agency’s 250-page report, which tries to take the focus off the importance of economic reforms in boosting growth and highlight social and political steps that help as well.
“You can’t simply look at privatization and liberalization and macro stabilization by themselves,” said World Bank Chief Economist Nicholas Stern, speaking ahead of the joint annual meeting of the World Bank and International Monetary Fund that opens Tuesday.
Stern stressed that better education, health care, legal systems and political participation are also key.
Weak rule of law that lets corruption creep in was especially a problem in the former Soviet Union and in parts of Africa and Latin America, the report said.
Corruption saps a country’s economy by making it a less attractive place to invest, channeling funds into private pockets instead of productive output and taking a bite out of public revenues.
The report, entitled “The Quality of Growth,” cites a 1997 study by the Institute for International Economics that said countries could give their economies a big boost just by wiping out corruption.
Other countries ranking low on the World Bank’s list for poor rule of law include Haiti, Iraq, Liberia, Turkmenistan and Belarus. At the opposite extreme were Norway, Switzerland, Canada and the United States.
