The World Bank: Why It Is Still Needed and Why It Still Disappoints
- (pp. 77-94)
AbstractDoes the World Bank still have an important role to play? How might it fulfill that role? The paper begins with a brief account of how the Bank works. It then argues that, while the Bank is no longer the primary conduit for capital from high-income to low-income countries, it still has an important role in supplying the public good of development knowledge—a role that is no less pressing today than ever. This argument is not a new one. In 1996, the Bank's President at the time, James D. Wolfensohn, laid out a vision for the "knowledge bank," an implicit counterpoint to what can be called the "lending bank." The paper argues that the past rhetoric of the "knowledge bank" has not matched the reality. An institution such as the World Bank—explicitly committed to global poverty reduction—should be more heavily invested in knowing what is needed in its client countries as well as in international coordination. It should be consistently arguing for well-informed pro-poor policies in its member countries, tailored to the needs of each country, even when such policies are unpopular with the powers-that-be. It should also be using its financial weight, combined with its analytic and convening powers, to support global public goods. In all this, there is a continuing role for lending, but it must be driven by knowledge—both in terms of what gets done and how it is geared to learning. The paper argues that the Bank disappoints in these tasks but that it could perform better.
Citation2016. "The World Bank: Why It Is Still Needed and Why It Still Disappoints." Journal of Economic Perspectives, 30(1): 77-94. DOI: 10.1257/jep.30.1.77
- F33 International Monetary Arrangements and Institutions
- F34 International Lending and Debt Problems
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
- O19 International Linkages to Development; Role of International Organizations