Do we still need a World Bank?

Access this speech (pdf)

On June 14, 2007, Dennis de Tray spoke at a symposium hosted by the American Enterprise Institute entitled "Do We Still Need a World Bank?"

Having worked both inside and outside the Bank, his answer was that while the world needs a World Bank-like institution, the current shape of the Bank has to be adjusted to reflect the rising demands of a multilateral development agency. Key points include:

• The principle issues facing the world today are global issues: global public goods and bads. Countries will under-invest in their own development because they will ignore the positive and negative spillover effects on the rest of the world. The issues are inherently multi-country and multi-sector, therefore, the world needs an institution with country and sector breadth and depth that can coordinate country responses and make difficult trade-offs.
• The Bank as it is today is too big, and too lending-driven. However, the Bank should continue to have the authority and ability to lend to countries, even middle-income countries, should those countries want to borrow. Borrowing from the Bank is an important way for countries to absorb years of project design and implementation experience that the Bank imbeds in each loan.
• A number of reforms need to take place, including a changed approach to private sector development, a change in the internal incentives facing Bank staff, and a change in the governance of the Bank itself. All of this requires recognition that this is a long-term process of reform for which new bank president Robert Zoellick will need strong support from the majority of the Bank's shareholders, and a strong, small group of internal and external advisors.