How Can the World Bank and Other Partners Engage with Social Contracts?

This study does not provide all the answers but provides a framework as a starting point for developing a deeper understanding of citizen-state dynamics and situate World Bank engagement. In particular, the framework can be applied to gain a better understanding of sector reform in the following ways: • This study puts forward a preliminary indicator framework, recognizing that it will need to be supplemented by additional investment in multidisciplinary use of nontraditional data sources, including barometer surveys, perceptionbased data, and political economy analysis. The study highlights the key elements of social contract bargaining that need to be understood: identification of the actors (state, nonstate, transnational) involved in the bargain, the power imbalances that shape bargaining dynamics, and key contextual factors that explain persistence or change opportunities. • Although social contract analysis can help explain the “big picture” narrative and long-term trajectories, there is a rich complexity and variability within any given country at the level of specific development or sectoral challenges.

More granular analysis of social contract bargaining around, for example, service delivery, social protection, security, business environment, political participation, and so on will help identify potential levers of change and programmatic implications, as well as potential trade-offs. Similarly, analysis of social contract dynamics at different spatial levels (for example, urban areas, lagging regions, or conflict-affected areas) will reveal asymmetrical possibilities for change.

How Can the World Bank and Other Partners Engage with Social Contracts?

On the one hand, it is overreaching to suggest that the World Bank can seek to shape social contracts in client countries, both as a matter of mandate and of ambition. On the other hand, by injecting resources, expert advice, and support into contested spaces, Bank interventions will inevitably have an impact on internal bargaining dynamics—by reinforcing the status quo, shifting relative power, or in some cases undercutting potentially positive bargaining dynamics. A social contract lens and theory of change regarding potential social contract impacts can be applied to World Bank programming as a do no harm principle at a minimum, and as a means of making informed choices.

Some operational considerations include the following: • Can the World Bank play a constructive role in renegotiation of the social contract? Regime transition, postconflict state-building, or constitutional junctures may be important opportunities for the Bank to provide technical expertise, convening power, and credible signals of change on policy options

with significant implications for social contracts, for example, around territorial and fiscal governance (federalism, decentralization, wealth sharing), addressing historical marginalization and inequalities, opening up economies, geographically targeted programming, and others. • Can the World Bank support opportunities at the national or subnational level to promote positive feedback loops between state capacity and citizen expectations? Given asymmetric capabilities between state authority and citizens, opportunities may arise from realignment of conditions (for example, as emerged in the study on Lagos, Nigeria, around infrastructure and taxation).

The challenge is to look beyond an individual reform champion to assess how the Bank can support a reform agenda, for example, in infrastructure, agriculture, or the private sector, to reinforce inclusive and responsive bargaining dynamics. • Can the World Bank use its citizen engagement mandate to strengthen bargaining mechanisms around particular policy areas (accountability, service delivery, business environment, and so on), both within and beyond individual projects? A social contract lens requires looking beyond the narrow citizen engagement requirements that are specific to Bank projects to consider how interventions can have an impact on the underlying “rules of the game” in ways that reinforce positive bargaining dynamics around specific outcomes. This approach requires engaging with a broad set of stakeholders and building coalitions to enhance collective action capacity, strengthen the link between information transparency and state responsiveness, and foster multistakeholder platforms for policy dialogue. In this regard, the potential of disruptive technologies can also be explored (World Bank 2018). • Can the World Bank consider project design options incorporating a social contract lens that can help in identifying underlying distributional imbalances, the role of institutions, and citizen feedback loops? For example, trade-off considerations can include the following: – Should infrastructure investments be partially reoriented toward those with strictly economic rather than broader-based gains? – How can the Bank balance a focus on the poorest of the poor with the need to support a growing middle class? – When implementing programs, should early emphasis be on pockets of effectiveness that can have positive demonstration effects or on lagging areas? – How should social programs be targeted in conflict-affected areas? – Do targeted interventions to support job creation entrench vested interests?