LIMA – Finance ministers, central bankers, and development economists are gathering in Lima, Peru, for the World Bank’s annual meetings, where the debate will focus on how the institution’s agenda fits our changing world. Holding the event in a developing country represents a welcome shift from the usual Washington, DC venue. Now, the Bank should make some other important shifts: It should reframe its mission and undertake new tasks, while its biggest shareholder, the United States, should rethink its role in the organization.
The World Bank’s current mission – to end extreme poverty within a generation and boost shared prosperity – is undoubtedly important. But, by reframing that mission to emphasize support for member governments’ pursuit of inclusive and sustainable growth, the Bank could do even more good.
Such an approach would reflect and reinforce the recently adopted Sustainable Development Goals (SDGs), which will guide global development efforts until 2030. And, far from excluding the current goal of ending poverty, it would embrace poverty reduction as an outcome of building stable, prosperous societies, in which citizens, through their taxes, are able and willing to fund capable and responsive states that honor agreed global standards and rules.
Such a reframed mission would align the World Bank more closely with its founders’ original vision of a “global credit cooperative” generating benefits for all members through collective action. That vision was built on a simple and brilliant idea: to borrow against the secure capital of creditor members (at the time, primarily the US) and lend to members where investment capital was scarce and returns would be high.