ABSTRACT
This chapter reviews experience with sectorwide approaches and attempts to improve fiscal management through medium-term expenditure frameworks, and the potential role of World Bank lending instruments in those efforts. Aid resources would be more fully incorporated into country budgets, using the government's systems instead of special project systems and multiple donor accountability instruments. Although there is no necessary connection between a sectorwide approach and a particular financing instrument, some instruments are more useful than others. Sector investment and maintenance loans have been used to support sectorwide approaches, but their relative inflexibility makes them impractical for a lender-of-last-resort role in support of a sector program. Problems usually come from unpredictable funding or corruption in contracting institutions. The World Bank has used two main types of programmatic instruments to support sectorwide approaches: sector investment and maintenance loans, or credits and adaptable program loans.
