world bank group building Win McNamee/Getty Images

Can the World Bank Redeem Itself?

Development outcomes depend on poor countries’ external economic environment, which is shaped by the policies of the major economies. And when it comes to promoting sound policies, the World Bank has fallen far short in recent decades, exemplified by three major intellectual sins of omission.

CAMBRIDGE – In recent years, as the World Bank’s financing role has been eclipsed by the rise of private capital and a surge in money from China, its leaders have been desperately seeking a new mission. And interminable reorganizations, politicized appointments, and the changing priorities of successive presidents have contributed to the perception that the institution is less than functional. But can that change?

The World Bank has tried to reinvent itself as a supplier of global public goods and a “knowledge bank” that provides data, analysis, and research to its developing-country clients. And few would deny the Bank’s achievements when it comes to gathering indicators of economic activity, measuring poverty, identifying deficiencies in the provision of health and education, and, in earlier years, designing and evaluating development projects.

But many, such as the Nobel laureate economist Angus Deaton, have criticized the World Bank’s overall performance. One problem is that development outcomes also depend on poor countries’ external economic environment, which is shaped by the policies of the major economies. And when it comes to promoting sound policies, the World Bank has fallen far short in recent decades, exemplified by three major intellectual sins of omission.

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