A key prong of the PSDS is to more systematically attach conditions to future loans that are meant to "improve the investment climate" in developing countries.
The PSDS states, "A significant part of the [World Bank Group's] existing work on policy reforms, such as that on privatization, competition policy, deregulation and strengthening of property rights, will help improve the investment climate in client countries.
The PSDS is heavily focused on the privatization of social services and infrastructure.
The PSDS describes a policy of "unbundling" projects, whereby the IFC will fund private delivery of services while the International Development Association (IDA), an affiliate of the Bank that lends to governments at below-market rates, funds subsidies to the poor who would otherwise not be able to afford privatized services.
Critics challenge all of the assumptions underlying the PSDS service privatization rationale.
Early drafts of the PSDS included references to user fees for services, but these explicit references were deleted in the final version.
The anonymous World Bank spokesperson says that the PSDS is neutral as to whether user fees should be used.
The PSDS solution to the equity problems of privatization is to provide subsidies to the lower-income groups.
The PSDS asserts that "in a number of countries private firms may be easier to regulate than public ones due to the arms-length relationship between them and the authorities.
The controversy that surrounded development of the PSDS did generate some changes in the final document.
The final version of the PSDS responds to concerns about overzealous advocacy of privatization, for example, by asserting that the "PSD is about a good balance between the complementary functions of the state and the private sector.
But critics says that while the PSDS now rhetorically talks about balancing the state and private sector and the need to apply privatization projects on a case-by-case basis, the logic of the final document continues to suggest privatization in all places, in all cases.