Thoughts on the World Bank's New Growth Report

♠ Posted by Emmanuel in , at 5/30/2008 03:25:00 AM
The World Bank has come out with a new publication entitled the Growth Report: Strategies for Growth and Sustained Development. The effort was headed by Nobel Laureate Michael Spence. It is the product of a lengthy consultative process, with inputs from those with some knowledge on the matter in both the developed and the developing world. The World Bank being the World Bank, the release of this report has resulted in a host of contrasting opinions. Jonathan Dingel over at Trade Diversion has a fairly positive view of the publication, although you should of course go through it yourselves to make up your own minds. Actually, I am in agreement with Trade Diversion that it makes some welcome contributions. In contrast to previous World Bank efforts to promote a "one best way" to development, this publication indicates the Bank is moving towards a more pragmatic instead of a dogmatic approach.

However, William "The White Man's Burden" Easterly begs to differ. If you've read Easterly's previous work, you are no doubt familiar with his arguments: Namely, top-down efforts promoted by the World Bank are not likely to promote development in contrast to more spontaneous efforts. Also, it is better to have "searchers" who seek solutions to problems of development instead of "planners" who try to organize development as they see fit. Ironically, Easterly still sees this World Bank effort as being in the "planner" mould when the institution is moving more towards his idea of enlisting "searchers."

I have long wondered what to make of the widespread controversy over the World Bank. Those with a critical bent view it as a tool for the domination of a global capitalist class, while those with a libertarian bent view it as a bottomless sinkhole for funds better allocated elsewhere. Clearly, the institution cannot be both a ruthless enforcer of a “neoliberal” order and a bumbling spendthrift at the same time. By referring to $4 million spent on this report, Professor Easterly alludes to the latter possibility. Most likely, however, the reality lies somewhere in between.

In defence of the World Bank, the suggestions made in the report which may be uncontroversial to the point of being trite to some reflects criticism the Bank has sustained from both the left and the right. Like the Bank itself at this point in time, the report is gun-shy in staking definitive positions. Statements such as “[this report] does not provide a formula for policy makers to apply—no generic formula” and “[this report] will not give them a full set of answers, but it should at least help them ask the right questions” (p. 2) are not those which experts making top-down prescriptions would likely make. As I see it, the trouble is that Easterly tries to characterize the report as another manifestation of the “development expert” paradigm when, in reality, the World Bank has made a carefully worded effort to stay away from sweeping generalizations of this nature. Easterly cannot argue it both ways: If he believes the report is banal in not making strong recommendations, then he cannot also say that this is yet another master blueprint for development.

Indeed, it would appear to me that the more open-ended approach the World Bank proffers here demonstrates evolution in its thinking in line with his concept of “searching”: In political science, it is akin to Lindblom’s “muddling through” or Wildavsky’s “trial and error”; in anthropology to Levi-Strauss’s “bricolage”; and in econometrics to “Bayesian updating.” That international organizations like the World Bank are prone to the bloat which they themselves claim to abhor is striking, but the result of the process demonstrates evolution that should be taken constructively.