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World Bank Needs to Re-examine Increasingly Complex Mission
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Jessica Einhorn talks to IRP Fellows about the World Bank. |
By Rachel Konrad, Fall 2002 IRP Fellow
Washington, D.C. - As the World Bank takes on more complex social and cultural tasks in the name of "development", it needs to examine what it is accomplishing by moving in so many different directions at once, a prominent World Bank veteran says.
Jessica P. Einhorn, dean of the Johns Hopkins University School of Advanced International Studies and former managing director of the World Bank, believes the institution might be trying to do too much in too many areas. The bank originally aimed to facilitate reconstruction after World War II by funding infrastructure investment projects, but it now funds social, health, and educational projects under the loose mantra of "worldwide poverty alleviation."
"I believe it's gotten too complicated," Einhorn said Tuesday at a seminar for Pew fellows. "They're doing good, but the sum is not greater than the whole of its parts. � Development has become so broad that there is nothing the bank cannot do."
Politicians and economists from 44 countries formed the World Bank during a 1944 conference in Bretton Woods, N.H. The group originally focused on improving impoverished nation's infrastructure, such as telecommunications systems and railroads.
But in 1963, the bank began funding education programs, and it dramatically expanded into other areas in the 1970s. Robert S. McNamara, former secretary of defense who served as World Bank president from 1968 to 1981, embarked on an unprecedented campaign to reduce rural poverty, and by fiscal 1979, World Bank lending had exceeded $10 billion.
The bank now provides more than $30 billion in loans and credits to 82 countries with education projects. The 10,000-employee institution also provides billions of dollars for HIV/AIDS, entrepreneurship and irrigation projects worldwide.
In total, it provided more than $19.5 billion in loans to more than 100 developing nations in fiscal 2002. The bank raises money through investments in global capital markets and through contributions from wealthier member governments.
Einhorn, a 19-year World Bank veteran and the 1998-99 visiting fellow at the International Monetary Fund, acknowledged that there is increasingly loud criticism of the World Bank and IMF. Foes contend that the institutions favor the interests of multinational companies and wealthy nations over the needs of an estimated 1.5 billion individuals living in poverty.
Some environmentalists accuse the organizations of providing assistance that damages the environment. Others decry loans to nations whose governments are human rights violators.
Einhorn said working in the field of economic development teaches humility. "The law of unintended consequences has plagued every move in developing economies." Einhorn reported directly to World Bank President James D. Wolfensohn when she departed in 1999. "You've got a lot of wise people saying, 'We've got a problem here.' The poor are no better off, and the crises are so great."
Copyright © 2005 International Reporting Project. All Rights Reserved.