This paper provides a rigorous and comprehensive methodology for the diagnosis of governance challenges and the identification of potential areas for operational support in IDB borrowing member countries. Consistent with the mandate in the Modernization of the State Strategy (GN-2235-1; July 23, 2003), the Bank has been carrying out Governance Diagnostic Studies as an input into the loan programming process and the writing of the country strategy. Such studies have been completed in numerous countries over the past three years. The purpose of this paper is to further develop, systematize and formalize the methodological frameworks that have been used in undertaking these studies. This paper will provide more explicit conceptual guidelines to those involved in carrying out governance analysis so that the comprehensiveness, depth, quality and comparability of the studies is ensured.

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