The World Bank prepares for the polycrisis
It turns out ending poverty is hard, especially in hard times
The World Bank evolution roadmap paper is out (not officially released yet, though). The document outlines the Bank’s perception of the “crisis of development” and its vision for its (expanded) mandate moving forward.
I: The polycrisis as the Bank sees it:
The world is facing a crisis of development. After decades of progress, growth and poverty reduction have stalled. Routes to shared prosperity for low- and middle-income countries have become more challenging, with growing debt burdens, inflation, rising costs of finance, and other macroeconomic imbalances. Climate change impacts, ranging from floods and droughts to locust invasions, are jeopardizing hundreds of millions of lives and livelihoods, creating hunger, conflict and forced displacement. Together, these trends threaten the prosperity, peace, and sustainability of the world.
II: Imagining the way forward
To address the crisis facing development and support climate action and other GPGs [global public goods], the WBG must evolve its Mission. The Twin Goals – eradicating extreme poverty and boosting shared prosperity in a sustainable manner – were set in 2012 and designed as a synthesis of the different dimensions of the Millennium Development Goals (MDGs – later the Sustainable Development Goals, or SDGs), reflecting the WBG’s major role to support the achievement of these broader goals. Given the impact of growing global challenges on the achievement of poverty reduction, shared prosperity, and the SDGs, it is important to evolve the WBG’s Mission to strengthen development impact. This involves better addressing global challenges even as the WBG remains focused on poverty reduction and shared prosperity.
III: The three things that stood out to me
The Bank wants to be able to do more work in middle income countries (MICs) — in the spirit of being able “to serve all clients”.
By current thresholds, only 10% of the world population are projected to be stuck in extreme poverty — most of them in fragile conflict-affected states. While ending extreme poverty would still be a leading goal, the Bank wants to also be able to keep helping MICs navigate the polycrisis. One way to do this would be by raising the threshold of targeting to people living on less than US$6.85 per day, well above the current poverty threshold.
Realizing the inter-connectedness of ongoing crises, the Bank wants to expand its mandate — to include areas like “topics such as climate change (mitigation and adaptation), pandemic preparedness, fragility, migration, and regional development.”
The Bank wants to reimagine its country engagement model to align it with the proposed expansion of mandate.
Overall, the proposed changes seem reasonable to me (although I await further details and analysis on the financing bits — I suspect CGD’s Charles Kenny is on this). I also hope that the expansion of mandate will finally convince the Bank to operationally stop pretending that development is purely a technical economics problem. Doing so should mean diversifying the disciplinary expertise at the table, walking the walk on working through host country institutions, and internalizing the headline lessons of The Tyranny of Experts.