The World Bank has a conflict problem

The World Bank is facing what I think of as a March of Dimes moment. The well-known March of Dimes charity was founded in 1938 with a focus on fighting polio. But after the Salk vaccine was licensed for use in 1955 and polio declined rapidly, the charity did not close up shop. Instead, it shifted its focus first to birth defects, and then to issues of healthy pregnancies and premature births.

A combination of growth in lower-income and middle-income countries around the world and change in their economic development challenges is leading to a similar crisis in the mission of the World Bank.

That is Timothy Taylor. He points to these amazing figures from Scott Morris and Madeleine Gleave:

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The problem with the countries in orange is that many aren’t growing at all. Some, like the Congo or South Sudan, are conflict-ridden states. Others like Zimbabwe and Uganda have aging autocrats at their helm, and who knows if they’ll manage a change of President without chaos.

The Bank knows this. They’ve produced a steady stream of reports. they’ve reorganized the institution partly around “fragile and conflict-affected states”.

At the same time, you have to worry about an institution that is supposed to apolitical, has a mandate to push money out the door to a smaller and smaller group of countries, and at the same time can only push the money through the central government, thuggish or not. This doesn’t exactly increase the thugs’ incentives to share power.

The Bank is the world’s largest aid donor by a big margin. So it matters.

This is when most bloggers would write the solution. Truth is I don’t know and I don’t know many people who do.

Honestly, a retreat to what the Bank does best–helping get roads and power plants built, and underwriting highly decentralized development programs (cash transfers, school and clinic building, and so on)–might be the safest strategy, given that the pipeline of aid into these places is unlikely to stop pumping. But “try to do as little damage as possible” is not the most inspiring rallying cry.

74 Responses

  1. “is supposed to apolitical, has a mandate to push money out the door to a smaller and smaller group of countries, and at the same time can only push the money through the central government, thuggish or not” – each of these things can be an advantage in FCAS environments if harnessed correctly. The first can provide risk cover for other donors, the second and third can be used to create incentives to build some insulated islands of functionality. ARTF in Afghanistan is a case in point.

  2. There is another task, for which the Bank should be uniquely suited, but seems less concerned with: ensuring global public goods are provided, and funded by those who can afford them.