{"id":26261,"date":"2015-04-13T04:52:40","date_gmt":"2015-04-13T02:52:40","guid":{"rendered":"http:\/\/www.w-t-w.org\/en\/?p=26261"},"modified":"2015-04-13T04:53:01","modified_gmt":"2015-04-13T02:53:01","slug":"26261","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/26261\/","title":{"rendered":"Is the World Bank Obsolete?"},"content":{"rendered":"

A combination of growth in lower-income and middle-income countries around the world and change in their economic development challenges is leading to a crisis in the mission of the World Bank. Although the rhetoric used by the World Bank to describe its mission has changed over time, most of what the World Bank actually does has been broadly the same for decades. It makes loans to national governments, with a heavy focus on infrastructure investment, with one set of loans and conditions for low-income countries and another for middle-income countries. This model is under challenge from several directions.\u00a0\u00a0 World Bank at 75<\/strong><\/a><\/p>\n

First, with sustained growth in many low-income and middle-income countries around the world, the number of countries eligible for World Bank loans <\/a> is likely to fall the next few years. Morris and Gleave offer a map of the countries eligible for World Bank lending in 2015, with the countries meeting the low-income (per capita) guidelines in orange and the middle-income countries in blue. They then project what countries will fall into those categories just four years from now in 2019. Either the World Bank is going to adjust its income guidelines substantially, or it is going to become very focused on Africa and south Asia in the next few years.<\/p>\n

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A second issue is that developments in the world financial system mean that governments and economies of low-income and middle-income countries now have access to many more alternative sources of finance.<\/p>\n

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Along with the financial flows from remittances, foreign direct investment, and a newfound ability for low-income countries to issue sovereign debt, there is even new competition in the world of development banks. There are existing regional development banks with growing financial clout like the Inter-American Development Bank (IDB), the African Development Bank (AfDB), and the Asian Development Bank (AsDB).<\/p>\n

Maybe instead of a focus on infrastructure, the World Banks should shift some of its emphasis to public goods like research and development for agriculture or disease prevention or reducing air pollution. Or course,these kinds of projects typically involve a large component of grants, rather than loans.<\/p>\n