Bangladesh: Economic Reforms, Growth and Governance

Since the1990s, Bangladesh has posted strong economic growth despite apparent weak governance. A new World Bank paper says that although it is evident that Bangladesh’s economic performance has been negatively affected by weak governance, the more interesting question relates to why the country’s economy has performed in the way it has despite wide-ranging governance failures.

Sadiq Ahmed, Acting Chief Economist for World Bank's South Asia region said that to understand Bangladesh’s growth paradox, one needs to analyze the economic growth process and focus on the main drivers behind accelerated growth. “The acceleration of growth of the Bangladesh’s economy since the early 1990s has been underpinned by strong export growth, especially the garment industry.”

Why Governance matters?
Ahmed argued that “the government of Bangladesh has shown genuine commitments to improve social development indicators, such as child mortality, primary school enrollment, and the adoption of modern birth control.”

While the existing governance structure may have been adequate in the past, it is increasingly proving to be a barrier for the higher growth needed to transform Bangladesh. Ahmed noted that “economic reforms have not been matched by progress in building the institutions of political and economic governance.”

Policy Paper (PDF): The Aspects of Bangladesh's Development Surprise
Related Link: Bangladesh: Strategy for Sustained Growth

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