Asian development bank and rural development; Policy and practice

Can the rural lending of an international development bank effectively increase food production, create jobs and raise the incomes of the rural poor? In response to the growing unemployment and poverty which accompanied foodgrain shortages in the early 1970s, the Asian Development Bank moved from its initial policy of modernising agricultural production to a rural development policy combining growth, employment and income distri bution. Despite the policy change, however, the Bank's rural-sector projects have continued to focus on increasing pro duction, with little impact on unemploy ment or poverty.

This study examines the reasons-both political and organisational-for the gap between policy and practice. While the ADB's policy reflects developmental concerns, many operational practices reflect the interests of the Bank's member countries, particularly those of Japan and the USA. Constraints on project innovation and change are also evident within the Bank pardeularly in the excessive emphasis place by management on annual lending targets. The study points to a revision of management objectives and a broadening of project formulation criteria as the most practicable routes to increasing the Bank's developmental effectiveness.