“Our Poverty Is a World Full of Dreams:” Reforming the World Bank

Abstract

Under what circumstances do international organizations change their operations and routines? Examining the recent Strategic Compact reform initiative, we argue that change in the World Bank is triggered by a complex set of factors stemming from changed interests and norms in the Bank's environment. The process of change, however, is some thing shaped by organizational culture, which is defined as the deeply embedded ideologies, norms, and routines that govern the expectations and behavior of bureaucratic staff. This organizational culture represents the internal friction that propels change in a slow, path-dependent direc tion that produces outcomes that are not necessarily congruent with the preferences of the organization's powerful shareholders or the intentions of internal reform initiators. Keywords: World Bank, Strategic Com pact, organizational culture, organizational reform, James Wolfensohn. Perhaps the most succinct description of the World Bank in this past decade is that of an international organization that is over stretched and underloved.2 The Bank is simultaneously faced with declining levels of official development assistance, a rapidly expanding development agenda, and increasing competition from pri vate capital and other aid agencies. This is compounded by mounting criticism from vigilant and vocal nonstate actors, which is compelling the international organization (IO) to adopt new policies that hold it to an unprecedented level of transparency and accountability. Internally, a series of scathing evaluations of the Bank's past performance indicted many of the bureaucratic policies and practices that contributed to its declining effectiveness.3 Thus, when James Wolfensohn entered office as president in June 1995, one of his first acts was to proclaim his inten tion to fundamentally change the institution.4 The response was an ambitious U.S.$250 million, thirty-month reform initiative named the Strategic Compact, a self-described renewal plan aimed at reestab lishing the Bank's preeminent position as the world's leading develop ment agency by instigating a massive transformation in the way the organization defines and pursues its core mission of alleviating world poverty. 369