World Bank Reform Should Start at the Top

Abstract

Philips, who trained as an economist and worked in the private sector before entering the world of development, spent 14 years working for the World with a focus on Tanzania, Mozambique, Belarus, and Armenia (viii). His main task in this volume is to recount and assess the reforms that Wolfensohn undertook as president and then to offer an explanation for why the reforms were not as successful as they might have been and a proposal for how to reform World governance in the name of overall operating efficiency. He draws heavily on the business management literature to describe both the corporate reorganization fads that held sway over Wolfensohn and also the ways in which designing a more effective board of directors would lead to improved operations (and, one hopes, improved development effectiveness) . The book opens with a standard account of the Bank's history and then a chapter on the challenges posed to the by NGOs and US Congressional committees. Then Phillips switches his focus to the Strategic Compact, Wolfensohn's attempt to reengineer the organization in the name of moving resources to operations, turning the into a knowledge bank able to provide development expertise even more than just funding, improving the use of information technology in operations, decentralizing operations to the borrower countries from Washington, and increasing pro-poor and participatory project lending. Phillips does a much better job of listing these goals in the concluding chapter than he does when he first discusses the Strategic Compact. The core contribution of the book is Phillips' extended assessment of the success of these reforms. The picture that he paints is not a pretty one. Despite the Strategic Compact's goal of adjusting staffing smoothly, equitably and cost effectively, Phillips describes a frantic process wherein, [f]rom mid-1997 to mid-2002, more than 4,500 people left and more than 3,800 new people joined the Bank (p. 114). While allegedly trying to make lending more pro-poor, the World decreased lending flows to the two sectors that Phillips thinks are most pro-poor - agriculture and rural development - while expanding operations in a host of institution-building areas that lack an immediate link to poverty alleviation (pp. 137-140). In Chapter 11, Phillips provides a powerful critique of the World Bank's project rating systems. He lays out how project approval ratings jumped upward in