IFI governance


Wolfensohn appoints poverty results champion under pressure from US

25 March 2002

The World Bank has appointed a new Vice President for ‘results’. The Bank’s President commented: “we have come a long way in developing measures of operational inputs and their quality. That said we need to do more to better measure and explain how our work makes a difference. The key is to move from largely measuring inputs to better focusing on outputs and outcomes”.

This move owes much to the noisy calls from the US administration and senior US politicians for improved reporting on the Bank’s impacts. The administration has said that its contributions to the Bank’s IDA arm will depend on annual reports on results achieved. Announcing $5 billion in new aid money on 14 March, President Bush stated that this would be allocated to countries that demonstrate a strong commitment toward good governance, investing in the health and education of their people, and creating sound economic policies including open markets and sustainable budgets. The White House briefing noted that “the President has instructed the Secretary of State and the Secretary of Treasury to reach out to the world community to develop a set of clear, concrete and objective criteria for measuring progress in the above areas”. It is highly likely that the World Bank will play a key role in defining these. Bank researchers are already privately celebrating official US acceptance of their ‘selectivity’ approach.

But Adam Lerrick, a professor of economics and one of the lead authors of the Meltzer Report to Congress recently wrote an opinion piece in the Financial Times complaining about the Bank’s judgement. The Bank reports that 78 per cent of its projects which concluded during the last year had satisfactory outcomes. Lerrick counters: “when the auditors are captive, when the timing of judgment is premature, when the criteria are faulty and when the numbers are selectively chosen – how credible are the conclusions?” He complained that the Bank’s Operations Evaluation Department (OED) “is a department of the Bank like any other, save for the ceremony of reporting to a passive executive board. A revolving door that leads back to standard line jobs and advancement in the bank does not foster disinterested and rigorous judgment”. In fact service at the OED may not always lead to advancement in the Bank. The OED recently lost the only non-economic social scientist on its staff – Warren Van Wicklen. Having worked with the Department for seven years, Van Wicklen was forced to find other employment after filing a critical report on the Bank’s approach to participation.

The Dutch Executive Director to the World Bank, Pieter Stek, hit back at Lerrick, calling his article “ill-informed and ill-disposed”. Stek commented “the OED is staffed with top-notch development professionals of impeccable integrity who call it as they see it. Their reports are notoriously hard hitting. All important evaluation reports are disclosed to the public”.

It is not yet known what approach will be taken by Joanne Salop, the new Vice President for Results, but it is very unlikely to go as far as suggested by Lerrick (an external audit by private sector companies) or some campaigners (a Truth Commission). The one result of Wolfensohn’s presidency that all sides can agree on, however, is a vast increase in the number of World Bank Vice-Presidents and self-congratulatory reports.

Adam Lerrick’s opinion piece in the Financial Times

White House briefing