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International Relations Foreign policy Finance Development

What Should the World Bank Do?

 Robert B. Zoellick
Who will replace Robert Zoellick as World Bank President? (Photo: World Bank Photo Collection/Flickr)

NEW YORK – I have been honored by World Bank directors representing developing countries and Russia to be selected as one of two developing-country candidates to become the Bank’s next president. So I want to make known to the global community the principles that will guide my actions if I am elected – principles based on lessons learned from development experience.

That experience has taught me that successful development is always the result of a judicious mix of market, state, and society. Trying to suppress markets leads to gross inefficiencies and loss of dynamism. Trying to do without the state leads to unstable and/or inequitable outcomes. And trying to ignore social actors that play an essential role at the national and local levels precludes the popular legitimacy that successful policymaking requires.

Indeed, the specific mix of markets, state, and society should be the subject of national decisions adopted by representative authorities. This means that it is not the role of any international institution to impose a particular model of development on any country – a mistake that the World Bank made in the past, and that it has been working to correct. Because no “one-size-fits-all” strategy exists, the Bank must include among its staff the global diversity of approaches to development issues.

Categories
Government Finance Development Economy

Economic and Political Indicators: Do we Still Need Them?

indicator
Synchronism indicator. Picture: Leo Reynolds/flickr

In a somewhat unexpected turn of events, the presentation of Matthias Busse on Thursday, 1st March entitled ‘Governance in Developing Countries’ at the CIS Colloquium series led to a heated debate on the necessity and validity of indicators, such as those for example developed by the World Bank. Unlike in usual antipositivist development circles, however, the audience engaged in a constructive debate with Busse about his research design concerning the following hypothesis: ‘External drivers of change are less effective than internal ones to improve business regulations’; but how can we discern internal drivers of change from external ones, and how can we measure the well-being of the business regulation framework?

At the beginning, Busse clarified that the project he presented is still in its early stages; yet, he invited disagreement by not being able to explain how internal drivers of change could, even theoretically, be differentiated from external ones. External drivers, such as the IMF or the World Bank, provide conditional loans, which in turn directly affect the so-called internal drivers of change: FDI, press freedom, or trade. Hence, it might be difficult to independently measure and then compare the effect of these two factors on the regulatory framework.

Categories
Keyword in Focus

Keywords in Focus: IMF and World Bank Group

A Chinese one Yuan bill
A Chinese one Yuan bill, courtesy of upton/flickr

This weekend, the annual meetings of the International Monetary Fund (IMF) and the World Bank Group take place with a focus on the world economic outlook, poverty eradication, economic development and aid effectiveness. The meetings are convened in a situation of escalating disputes about the sustainability of the international monetary system and fears of a coming currency devaluation war.

Dominique Strauss-Kahn, the director of the IMF, warns that the willingness to use currencies as a political weapon is growing in a short-sighted attempt to boost a nation’s economy, better known as “beggar thy neighbor” policy. Primarily China with its policy of keeping the Yuan artificially cheap vis-à-vis the dollar and the euro is seen as the main trigger of the current situation. But also the US policy of keeping interest rates at a long-time low adds to long-standing imbalances of the international monetary system.

It will be interesting to see whether the IMF and the World Bank, both cornerstones of the Bretton Woods system and as such deeply interwoven with the shaken monetary system, can facilitate the adaption to the changing realities not only in the realm of monetary economics.

Explore our content holdings on the IMF and the World Bank Group, today’s keywords in focus. Some highlights include:

  • A Chatham House paper on rethinking the international monetary system
  • A CIS paper on the impact of World Bank and IMF programs on democratization in developing countries
  • A PISM paper on the IMF’s review of its anti-crisis package
  • A CEPR paper on the IMF’s support package for Greece
  • A CGD paper on a new World Bank financing model for emerging economies
  • A CGD paper on the World Bank’s black box allocation system
Categories
International Relations

Remembering Robert McNamara

Nuclear bomb casing / photo: Andrea Church, flickr
Nuclear bomb casing / photo: Andrea Church, flickr

A ”mathematical genius”, statistics wonk, the man behind the escalation of the Vietnam War, the longest-serving US defense secretary, controversial World Bank president and nuclear disarmament advocate: Robert S. McNamara left big footprints in post-World War II international politics – for better and for worse. He died yesterday at the age of 93 at his Washington home.