The Role of the World Bank in Poverty Alleviation and Human Development in the Twenty-First Century: An Introduction

Abstract

This month, October 2007, more than 140 journals worldwide are participating in an effort to raise awareness and stimulate research on a global theme of poverty and human development. In this spirit, Global Governance presents this special issue on the World Bank, the preeminent international aid agency whose core mission is the alleviation of poverty and the promotion of human and economic growth. Established on 1 July 1944, in Bretton Woods, New Hampshire, by the victors of World War II, the World Bank (hereafter the Bank) was designed to provide needed capital and technical assistance to rebuild postwar Europe. Since then, the Bank has transformed into a much larger and more broadly defined institution, self-characterized by the banner hanging in its Washington, DC, lobby: Our Dream Is a World Free of Poverty. The World Bank Group's (1) mandates and activities reflect an understanding of development that has dramatically expanded over the past sixty years. Today the Bank provides loans, grants, technical assistance, and highly influential research and data on issues as varied as infrastructure, gender, sustainable development, AIDS prevention and treatment, anticorruption, and postconflict reconstruction. Yet the years have taken a toll on the Bank. There is little, if any, consensus on whether the Bank has been successful in its endeavors. On the one hand, Bank proponents laud statistics demonstrating the dramatic reduction in absolute poverty and other indicators of economic growth and human development. On the other hand, Bank critics--an ever growing group--dispute these claims, providing their own interpretation of the evidence to argue that the Bank has not been effective in fostering equitable, sustained growth or human development, and in some instances has contributed to the perpetuation of poverty in many areas of the developing world. Whether you agree with the former or the latter statement, it is difficult to dispute that the tremendous growth of antiglobalization protest movements in the 1990s has made the World Bank a very popular target for metaphorical--and sometimes quite literal--tomato throwing. It is widely perceived by those inside and outside the institution that the Bank is in crisis. The first aspect of this crisis concerns the Bank's legitimacy. Critics lambaste the Bank for its ideological rigidity, pervasive corruption within aid programs, and weaknesses in bureaucratic transparency and accountability mechanisms. The Bank's legitimacy is further damaged by the perceived lack of democracy in its organizational governance, epitomized by the weighted voting rules of the executive board and the gentlemen's agreement underlying the selection process of the Bank presidency. This has led many critics to see the Bank as the handmaiden of its most powerful member state, the United States. At the same time, unchecked mission creep, persistent gaps between policy mandates and performance, and a checkered history of loan results have given rise to criticism of the Bank's effectiveness. And the abundance of private capital and the observable decline in demand for Bank lending from major middle-income countries give critics from both extremes of the political spectrum cause to question the very raison d'etre of the Bank. Since the Bank's fiftieth anniversary, in 1994, the debate on whether to demolish, reinvent, or rescue the Bank has been a favorite topic of nongovernmental organizations (NGOs), academics, and DC Beltway think tanks. (2) All of these criticisms have been compounded by the recent controversial departure of the Bank's president, Paul Wolfowitz, as a result of his involvement in the promotion and pay raise of his former girlfriend, Bank staffer Shaha Ali Riza. European executive directors opposed Wolfowitz's intention to remain in the top job amid an unprecedented staff revolt and media circus over the hypocrisy of the self-depicted anticorruption champion. …