dix box C.2) and a food processor and retailer in Croatia. Though the Business Enabling Environment and Infrastructure units have played a limited role in support for the sector, IFC has undertaken a few stand-alone sector, privatization, and investment climate studies not linked to any specific IFC investment.23 A good example of advisory service combined with investment to address the business environment in Liberia is discussed in box 3.12.
Progress has been slow in countries where consensus on the need to limit the role of government in market functions has not developed. Conversely, progress in Bank projects has been slow in countries where consensus has not developed on the need to limit the role of government in marketing functions—such as by eliminating or at least improving the efficiency of parastatals. Examples include the fiscal 2005 Tanzania Second Poverty Reduction Support Credit (PRSC) and the Malawi Fiscal Management and Accelerated Growth Project (fiscal 2004). The latter project emphasized reform of the parastatal Agricultural Development and Marketing Corporation, but that reform proved difficult.
Direct improvements in the enabling environment for agribusiness have not been a major focus of IFC’s interventions. Input and Output Markets The state control of agricultural marketing and food processing that prevailed in many parts of the developing world in the 1970s have undergone tremendous changes in the era of liberalization and globalization in the 1980s and 1990s (Swinnen and Maertens 2007). In transition countries, the liberalization of prices and trade and the privatization of state enterprises eliminated the state control and vertical coordination of commodity chains, and similar changes have reduced the role of state agencies in food and agricultural chains in many developing and emerging economies.
Direct improvements in the enabling environment for agribusiness have not been a major focus of IFC’s agribusiness interventions, though a few IFC agribusiness investments—primarily in Europe and Central Asia— have sought to indirectly influence the investment climate through demonstration effects. These investments represent only 2.3 percent (or $129 million) of total commitments over the review period. Examples include investments in a dairy producer in the Russian Federation (see appen-
FIGURE 3.8 Performance of the Bank Agribusiness and Agricultural Marketing and Trade Components in the Evaluation Portfolio, by Typology 120 100
100 83
80 Percent
67
60 40
59
58
35
20 0 Agriculturebased
Transforming
Urbanized
Sources: World Bank data and evaluation calculations. Note: Darker bars represent overall performance of the components; lighter bars represent sustainability ratings of the components. The performance of agriculture-based economies is significantly lower than that of transforming and urbanized economies on overall outcome, and significantly lower than the urbanized on sustainability.
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Growth and Productivity in Agriculture and Agribusiness