Comment on Nancy Birdsalls ‘my-two-big-worries-about-world-bank’ CGD 11/3/14

On a recent CGD blog Birdsall wrote about the rationale for and the reorganization of the World Bank. “Short of a new vision, (the World Bank) faces an existential threat of growing irrelevance and obscurity as rising incomes in big emerging markets reduce the demand for and logic of the bank’s country loan model.”

Indeed – a major re-think of the rationale of the institution is long past due. The goal of a global organization in the 21st Century should center on the provision of Global Public Goods – projects that address climate change and the environment, global health, nutrition, global food security and pests, global infrastructure, global financial stability, etc. These are indisputably part of and appropriate overall goal. The World Bank should adopt this goal as its primary long term focus and it should reorganize its structure to achieve it. This will be difficult because it will require a major change in its sovereign lending model but it is essential. And it does not require major external consulting advice, little of which has apparently done anything useful given that recommendations are thrown out every few years. It requires a systematic internal re-think with a sensible time horizon.

Continual reorganization of the boxes will never achieve useful results if the fundamental goals of an organization are not credible and not subscribed to by the people that have to do the work.  If on the other hand the goals are re-set so that the majority do subscribe wholeheartedly to them then the organizational boxes will tend to re-align themselves automatically.

The short term horizon under which successive World Bank Presidents from the US have operated (with the exception of McNamara) is at the root of the trouble, along with the weakness of the Executive Board. (Please read my book on ‘Reforming the World Bank’ (Cambridge 2011).