Borrower ownership of adjustment programs and the political economy of reform, Parts 63-199

China Has Done Much To Reform Its Price System, Achieve Macroeconomic Stability, And Restore Growth. Nevertheless, Price Distortions Remain In Three Key Areas. This Study Suggests Further Price Reforms For The Energy, Grain, And Transport Sectors. It Explains Why Energy Price Adjustments Should Have Only A Modest Effect On Consumer Prices, But A Highly Positive Effect On The Economy. It Discusses Why China May Have To Reduce Consumer Subsidies To Achieve The Necessary Reforms For Grain Prices. The Study Describes What The Government Must Do To Strengthen Commodity Markets, Generate Competition, And Make Allowances For Seasonal Price Variations. China's Transport Sector Has Been A Critical Development Bottleneck. The Paper Reviews Tariff Adjustments And Other Reforms That Would Modernize The Transport System And Help It Meet Growing Demand. These Reforms Also Would Encourage Energy Conservation And Help Integrate The National Economy. Annotation With strong encouragement from the World Bank and other international agencies, developing countries have increasingly taken loans to finance programs that promote economic adjustment and restructuring. This paper investigates the view that the more involved a borrowing country is in a program of adjustment lending, the more successful the program is likely to be. The authors evaluated some 100 adjustment programs in 42 countries to confirm the relationship between borrower's involvement, or ownership, and the outcome of a program. They define and quantify empirically verifiable conditions of borrower ownership. The paper outlines a model used to determine and measure the criteria for ownership. Treating ownership as an independent variable, the authors find a significant correlation between ownership and outcome. Through selected country case studies, they determine factors that account for differences in the strength of borrower ownership. These factors include political stability, government support, and participation by nongovernmental interest groups. The authors suggest that taking these factors into consideration from the earliest stages of program design will increase the chances for success. They also advise caution in cases where significant doubt exists about the extent of borrower ownership. This discussion paper will be of interest to those involved in the design and implementation of adjustment programs